UNITED STATES SECURITIES AND EXCHANGE COMMISSION ~~Washington, D.C. 20549~~

Washington, D.C. 20549

FORM 10-K

~~[X]~~þ Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934 ~~for the fiscal year ended December 31, 2007~~

~~[ ]~~ ~~Transition~~for ~~report under Section 13 or 15(d) of~~ the ~~Securities~~fiscal ~~Exchange~~year ~~Act~~ended ofDecember 31, ~~1934 for the transition period from to~~ 2009.

~~Commission~~o ~~file~~Transition ~~number:~~report ~~000-51787 Asia~~under ~~Electrical~~Section ~~Power~~13 ~~International~~or ~~Group Inc.~~ 15(~~Name~~d) of ~~small~~the ~~business~~Securities ~~issuer~~Exchange inAct ~~its~~of ~~charter)~~1934

Nevada		98-0522960
(State or other jurisdiction of incorporation or		(IRS Employer Identification No.)
organization)
E-4, Floor 3, Haijin Square Taizi Road, Nanshan District, Shenzhen		518067
(Address of principal executive offices)		(Zip Code)
Issuer's telephone Number	+86-755-2823 1993

for the transition period from to .

~~Securities~~ Commission ~~registered~~file ~~pursuant to Section 12(b) of the Act~~number: 000-51787

~~None~~Asia Electrical Power International Group Inc.

~~Securities~~ (Exact ~~registered~~name ~~pursuant~~of toregistrant ~~section~~as ~~12(g)~~specified ofin ~~the~~its ~~Act~~charter)

Common Stock, $0.001 par value


Nevada		98-0522960

(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

E-4, Floor 3, Haijin Square
Taizi Road, Nanshan District, Shenzhen, China		518067

(Address of principal executive offices)		(Zip Code)

~~(Title~~Issuer’s oftelephone ~~class)~~ number, including area code: +86-755-2823-1993

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark~~to ifSection 12(b) ~~the registrant is a well-known seasoned issuer, as defined in Rule 405~~ of the ~~Securities~~ Act.: ~~[ ] YES [X] NO~~ None

~~Indicate~~Securities byregistered ~~check mark if the registrant is not required to file reports~~ pursuant to ~~Section~~section ~~13 or Section 15~~12(dg) of the ~~Exchange~~ Act~~. [ ] YES [X] NO~~ :

~~Indicate~~Common byStock, ~~check~~$0.001 ~~mark~~par ~~whether the registrant~~ value (1)Title ~~has filed all reports required to be filed by Section 13 or 15(d)~~ of ~~the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports~~class)~~, and (2) has been subject to such filing requirements for the past 90 days. [X] YES [ ] NO~~

Indicate by check mark if ~~disclosure~~the ofregistrant ~~delinquent~~is ~~filers~~a ~~pursuant to Item 405 of Regulation S~~well-Kknown isseasoned ~~not contained in this form and will not be contained~~issuer, toas ~~the~~defined ~~best of the registrant's knowledge,~~ in ~~definitive~~Rule 405 ~~proxy or information statements incorporated by reference in Part III~~ of the ~~this~~Securities ~~Form~~Act. ~~10-K~~o orYES ~~any~~þ ~~amendment to this Form 10-K. [X]~~NO

Indicate by check mark ~~whether~~if the registrant is anot ~~large~~required ~~accelerated~~to ~~filer,~~file anreports ~~accelerated~~pursuant ~~filer,~~to orSection 13 ~~a non-accelerated filer,~~ or Section a15(d) ~~smaller reporting company. See the definitions~~ of ~~"large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of~~ the Exchange Act. ~~(Check~~o ~~one):~~YES þ NO

~~Large~~Indicate ~~accelerated~~by ~~filer~~check [mark ]whether ~~Accelerated~~the ~~filer~~registrant [(1) has ]filed ~~Non-accelerated~~all ~~filer~~reports [required ]to ~~Smaller~~be ~~reporting~~filed by Section 13 or 15(Dod) ~~not~~of ~~check~~the ifSecurities aExchange ~~smaller~~Act ~~company~~of ~~[X]~~1934 ~~reporting~~during ~~company~~the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. o YES þ NO

Indicate by check mark ~~whether~~if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained in this form and will not be contained, to the best of the registrant’s isknowledge, ain definitive ~~shell~~proxy ~~company~~or ~~(as~~information ~~defined~~statements incorporated by reference in ~~Rule~~Part III ~~12b~~of this Form 10-2K or ofany ~~the~~amendment ~~Exchange~~to ~~Act).~~this ~~[ ]~~Form ~~YES~~10-K. ~~[X] NO~~o

AsIndicate ofby ~~June~~check ~~30,~~mark ~~2008,~~whether the ~~aggregate~~registrant ~~market~~has ~~value~~submitted ofelectronically ~~the~~and ~~voting~~posted ~~and~~on ~~non-voting~~its corporate ~~common~~Web ~~equity~~site, ~~held~~if byany, ~~non-affiliates~~every isInteractive ~~approximately~~Data ~~$24,553,360.~~File ~~This~~required ~~calculation~~to isbe ~~based~~submitted ~~upon~~and ~~the~~posted pursuant ~~average~~to Rule 405 of ~~the~~Regulation S-T ~~bid~~(§232.405 ~~price~~ of ~~$1.04~~this ~~and~~chapter) ~~asked~~during ~~price~~the ofpreceding ~~$1.~~12 months (or offor such shorter period that the ~~common~~registrant ~~stock~~was onrequired ~~June~~to ~~30,~~submit ~~2009~~and post such files). o YES o NO

AsIndicate ofby ~~April~~check 1mark whether the registrant is a large accelerated filer, ~~2009~~an accelerated filer, or ~~there~~a ~~were~~non-accelerated 51filer,~~959,693~~ ~~shares~~or a smaller reporting company. See the definitions of ~~our~~“large accelerated ~~common~~filer,” ~~stock~~“accelerated ~~issued~~filer” and ~~outstanding~~“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

~~DOCUMENTS~~Large ~~INCORPORATED~~accelerated BYfiler ~~REFERENCE~~o Accelerated filer o Non-accelerated filer o Smaller reporting company þ (Do not check if a smaller reporting company)

~~None~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES þ NO

The aggregate market value of the 19,797,348 voting and non-voting common equity held by non-affiliates of the registrant was approximately $989,867.4 as of June 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter, based on the last sale price of the registrant’s common stock on such date of $0.05 per share, as reported on the OTC Bulletin Board.

As of April 1, 2010, the registrant had 51,959,693 shares of common stock and 5,000,000 shares of preferred stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
None

TABLE OF CONTENTS


PART I			2
Item 1 Business			2
Item 1A. Risk Factors			9
Item 1B Unsolved Staff Comments			9
Item 2 Properties			9
Item 3 Legal Proceedings			10
PART II
Item 5 Market for Registrant’s Common Equity and Related Stockholder Matters			11
Item 6 Selected Financial Data			12
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations			12
Item 7A Quantitative and Qualitative Disclosure About Market Risk			17
Item 8 Financial Statements and Supplementary Data			18
Item 9 Change In and disagreements With Accountants on Accounting and Financial Disclosure			18
Item 9A(T) Controls and Procedures			18
Item 9B Other Information			19

PART III
Item 10 Directors, Executive Officers and Corporate Governance			20
Item 11 Executive Compensation			22
Item 12 Security Ownership of Certain Beneficial Owners and Management			22
Item 13 Certain Relationships and Related Transactions			23
Item 14 Principal Accountant Fees and Services			24
Item 15 Exhibits			25

Financial Statements and Report of Independent Registered Public Accounting Firm			F-1

Signatures

Unless otherwise indicated or the context otherwise requires, all references below in this Annual Report on Form 10-K to “we,” “us” and the “Company” are to Asia Electrical Power International Group Inc., a Nevada corporation and its wholly owned subsidiary Asia Electrical Power Equipment (Shenzhen) Co., Ltd.

Unless otherwise noted, all currency figures in this filing are in U.S. dollars. References to “Yuan” or “RMB” are to the currency of the People’s Republic of China (the “PRC”) Yuan (also known as the Renminbi). According to Xe.com as of March 30, 2010, $1.00 USD = 6.82685 Yuan.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:

•		general economic and business conditions, both nationally and in our markets,

•		our expectations and estimates concerning future financial performance, financing plans and the impact of competition,

•		our ability to implement our growth strategy,

•		anticipated trends in our business,

•		advances in technologies, and

•		other risk factors set forth herein.

We identify forward-looking statements by use of terms such as “may,” “will,” “expect,” “anticipate,” “estimate,” “hope,” “plan,” “believe,” “predict,” “envision,” “intend,” “continue,” “potential,” “should,” “confident,” “could” and similar words and expressions, although some forward-looking statements may be expressed differently. You should be aware that our actual results could differ materially from those contained in the forward-looking statements. You should consider carefully the statements of this report which describe factors that could cause our actual results to differ from those set forth in the forward-looking statements.

Forward-looking statements speak only as of the date of this report or the date of any document incorporated by reference in this report. Except to the extent required by applicable law or regulation, we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

	TABLE OF CONTENTS
PART I
Item 1	Business	4
Item 1A.	Risk Factors	10
Item 2	Properties	18
Item 3	Legal Proceedings	19
Item 4	Submission of Matters to a Vote of Security Holders	19
PART II
Item 5	Market for Registrant’s Common Equity and Related Stockholder Matters
Item 6	Selected Financial Data	20
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A	Quantitative and Qualitative Disclosure About Market Risk	25
Item 8	Financial Statements and Supplementary Data	26
Item 9	Change In and disagreements With Accountants on Accounting and Financial Disclosure	26
Item 9A(T)	Controls and Procedures	26
Item 9B	Other Information	27
PART III
Item 10	Directors and Executive Officers	27
Item 11	Executive Compensation	30
Item 12	Security Ownership of Certain Beneficial Owners and Management	30
Item 13	Certain Relationships and Related Transactions	31
Item 14	Principal Accountant Fees and Services	32
Item 15	Exhibits	32
	Signatures	46

PART I

~~Note~~ITEM ~~regarding~~1. ~~forward-looking statements~~BUSINESS

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things:Overview

·Asia ~~general~~Electrical ~~economic~~Power ~~and~~International ~~business~~Group ~~conditions,~~Inc. ~~both~~(“AEPW”) ~~nationally~~was ~~and~~incorporated in ~~our~~the ~~markets,~~State ·of ~~our~~Nevada ~~expectations and estimates concerning future financial performance~~on August 30, ~~financing~~2002 ~~plans~~as ~~and~~“Berita ~~the~~International ~~impact~~Corporation.” ofOn ~~competition~~December 24, ·2003, ~~our~~we ~~ability~~changed ~~to implement~~ our ~~growth~~name ~~strategy,~~to “Keiji ·International ~~anticipated~~Group ~~trends~~Inc.” inand ~~our~~on ~~business~~September 30, ·2004, ~~advances~~we inchanged ~~technologies,~~our ~~and~~name ·to ~~other~~“Asia ~~risk~~Electrical Power ~~factors~~International ~~set~~Group ~~forth herein~~Inc.”

WeOn ~~identify forward-looking statements by use of terms such as "may~~January 23," ~~"will~~2003," ~~"expect,"~~we ~~"anticipate,"~~entered ~~"estimate,"~~into ~~"hope,"~~an ~~"plan,"~~Asset ~~"believe,"~~and ~~"predict,"~~Share ~~"envision,"~~Exchange ~~"intend,"~~Agreement ~~"will,"~~(the ~~"continue,"~~“Agreement”) ~~"potential,"~~with Shenzhen ~~"should,"~~Naiji ~~"confident,"~~Electrical ~~"could"~~Equipment ~~and similar words and expressions~~Co., ~~although some forward-looking statements may be expressed differently~~Ltd. ~~You~~(“Naiji”), ~~should~~a bePRC ~~aware~~company ~~that~~whereby ~~our~~we ~~actual~~acquired ~~results~~all ~~could differ materially from those contained in~~ the issued ~~forward-looking~~and ~~statements.~~outstanding ~~You~~stock ~~should~~of ~~consider~~Naiji ~~carefully~~for ~~the~~consideration ~~statements under the "Risk Factors" section~~ of ~~this~~24,000,000 ~~report~~shares ~~and other sections~~ of ~~this report which describe factors that could cause~~ our ~~actual~~common ~~results to differ from those set forth in the forward-looking statements~~stock.

~~Forward-looking~~The ~~statements~~shareholders ~~speak~~of ~~only~~Naiji asunanimously ofapproved the ~~date~~Agreement for the purposes of ~~this~~restructuring itself ~~report~~in oranticipation of becoming listed on the ~~date~~OTC ofBulletin ~~any~~Board. ~~document~~AEPW ~~incorporated~~was formed by ~~reference~~Naiji in for this ~~report~~purpose. ~~Except~~As toa ~~the~~result, ~~extent~~Naiji ~~required~~became byour ~~applicable~~wholly-owned ~~law~~subsidiary. orPrior ~~regulation~~to entering into the Agreement, we dohad no assets, liabilities, equity and had not ~~undertake~~issued any ~~obligation~~of toour ~~update~~shares. ~~forward-looking~~In ~~statements~~PRC, corporate toownership ~~reflect~~is ~~events~~determined orby ~~circumstances~~each ~~after~~shareholder’s proportionate capital contribution. As a result of entering into the ~~date~~Agreement, the shareholders of ~~this~~Naiji ~~report~~became orthe toshareholders ~~reflect~~of AEPW in equal proportion wherein the ~~occurrence~~24,000,000 shares were allocated based on the capital contributions, or ownership of ~~unanticipated~~Naiji. ~~events~~The Agreement therefore was a non-arms length transaction.

~~Unless~~Naiji ~~otherwise~~has ~~noted,~~produced ~~all~~high ~~currency~~and ~~figures~~mid-voltage inelectrical ~~this~~switchgears ~~filing~~since ~~are~~its inception in U1997.S. dollars. References to “Yuan” or “RMB” are to the currency of the People’s Republic of China (the “PRC”) Yuan (also known as the Renminbi). According to Xe.com as of December 31, 2008, $1.00 USD = 6.8240 Yuan.

~~Explanatory~~For ~~Note~~the year ended December 31, 2009, we generated a pre-tax income of $521,071 compared with a pre-tax net income of $129,400 for the 2008 fiscal year end period.

~~Unless~~We ~~otherwise~~are ~~indicated~~currently orlisted ~~the context otherwise requires, all references below in this Current Report~~ on ~~Form~~the ~~10-K~~OTCBB tounder ~~“we,” “us” and~~ the ~~“Company”~~symbol ~~are~~of ~~to Asia Electrical Power International Group Inc~~“AEPW.~~, a Nevada corporation, together with its subsidiary, Naiji Electrical Equipment Co., Ltd., a PRC corporation.~~”

Recent Events

On December 4, 2009, we filed a Schedule 13E-3 Transaction Statement including a Preliminary Information as an Exhibit with the Securities and Exchange Commission (“SEC”) in connection with the approval by the board of directors of a reverse stock split of one share for each 500 shares of the Company’s common stock presently issued and outstanding. The purpose of the reverse stock split is to reduce the number of stockholders of the Company as part of a process to permit the Company to terminate operating as a “reporting company” under the Securities Exchange Act of 1934 because of the disproportionate expense in remaining a “public company” compared with any benefits the Company receives as a result thereof. A Definitive Schedule 14C Information Statement will be sent or made available to all stockholders before the Company carries out the reverse stock split. No proxies are being solicited in connection with this transaction since stockholders holding approximately 70.8% of the issued and outstanding common stock of the Company have voted in favor of the reverse stock split.

We intend to carry out the reverse stock split by filing an amendment to our Articles of Incorporation with the Secretary of State of Nevada after the SEC approves the transaction disclosure documents and we complete the dissemination of transaction information materials to our stockholders. We also intend to file a final Schedule 13E-3 Transaction Statement and a Form 15 Certification and Notice of Termination of Registration with the SEC in order to effect the voluntary deregistration of our common stock after the reverse stock split is completed. For more information regarding the reverse stock split, please see our Schedule 13E-3 Transaction Statement, as amended, and the exhibits thereto, and Schedule 14C Preliminary Information Statement and the exhibits thereto, all of which were filed on March 11, 2010.

Our Headquarters

Our world headquarters are located at Asia Electrical Power Industrial Zone, Songgang Road, Bao’an District, Shenzhen, China. Our phone number is +86 755 2823 1993, and our fax number is +86 755 2823 1996.

Our Product Line and New Products

We design, manufacture and market electrical power systems designed to monitor and control the flow of electrical energy and to provide protection to motors, transformers and other electrically powered equipment. We carry a wide range of products which are generally configured together in various combinations to form a whole electric power and management system. The combinations vary depending on the needs of the customer and design specifications.

Our product line consists of switchgears, load break switches (circuit breakers), and branch cabinets and each is described below:

Switchgears are used in combination with associated control, measurement, protection and command devices. Switchgears are commonly used in association with electric power systems, or grids, with the combination of electrical disconnects and/or circuit breakers used to isolate electrical equipment. Switchgears are used both to de-energize equipment to allow work to be done and to clear faults downstream.

SRM 16-12/24 SF6 GIS Ring Main Unit

This product is used in conjunction with existing power systems to pass electrical current from one area to another to allow for continuous flow of electricity. This product uses SF6 sulphurhexaflouride, a non-poisonous electronegative gas as insulation to protect the components. This product also has arc extinguishing properties through the use of circuit breakers. An arc is sparking which results when there are higher than normal levels of current and results in increased temperature in the unit. This occurs when the level of electricity used at one time exceeds a maximum level. The circuit breaker detects excessive power demands in a circuit and self-interrupts the arc when high levels of current occur. It is used primarily in connection with the generation, transmission, distribution and conversion of electric power. This product consists of the AFL 12/24 D Load Break Switch, VDM6/12, VS1 12/24 and the BP1 Vacuum Circuit Breakers. This product is suitable for end-user or network node.

AGW 12/24 Outdoor Ring Main Unit

This product is the outdoor counterpart of the SRM 16-12/24 SF6 GIS Ring Main Unit with automatic temperature control. This product consists of the VS1-12/24, VDM6-12 and BP series vacuum circuit breakers and the AFL 12/24D Load break switch.

AGN 12/24 SF6 Ring Main Unit

This product is similar to the SRM 16-12/24 SF6 GIS Ring Main Unit however it consists of the VS1-12/24, VDM6-12 and BP series vacuum circuit breakers and the AFL 12/24D Load break switch.

KYN 12/24 Metal Clad Switchgear

This product is a complete set of distribution devices with 3.6 -2KV, 24KV used mainly in power plants, and mining industries.

Load Break Switches interrupt normal load currents in low voltage distribution networks.

EK24 GIS Load Break Switch

This product is an indoor high-voltage SF6 load switch and switchgear with a rated voltage of 12KV/24KV. It consists of SF6 gas as an arc-extinguishing property and insulation medium. This product includes three switch locations for on/off switching suitable for uses requiring controls at different locations. This product is adaptable with outdoor type cable cabinets.

~~ITEM~~AFL 1.12/24D ~~BUSINESS~~Load Break Switch

~~History~~This product is an indoor high-voltage SF6 load switch and switchgear with a rated voltage of 12KV. It consists of SF6 gas as an arc-extinguishing property and insulation medium. This product includes three switch locations for on/off switching suitable for uses requiring controls at different locations. This product is adaptable with outdoor type cable cabinets.

~~Asia~~AFW ~~Electrical Power International Group Inc. ("AEPI") was incorporated in the State of Nevada on August 30, 2002 as "Berita International Corporation." On December~~ 12/24, ~~2003,~~Overhead weLoad ~~changed~~Break ~~our name to "Keiji International Group Inc." and on September 30, 2004, we changed our name to "Asia Electrical Power International Group Inc.".~~Switch

OnThis ~~January~~product ~~23,~~is ~~2003,~~an weoutdoor ~~entered~~high-voltage ~~into~~SF6 anload ~~Asset~~switch ~~and~~is ~~Share~~the ~~Exchange~~outdoor ~~Agreement~~overhead ~~(the~~type distribution ~~"Agreement")~~equipment with ~~Shenzhen~~the ~~Naiji~~rated ~~Electrical~~voltage ~~Equipment~~of ~~Co.,~~12KV ~~Ltd.~~and ~~("Naiji"),~~the athree-phase ~~PRC~~alternating ~~corporation~~current ~~whereby~~of 50Hz. weIt ~~acquired~~is ~~all~~mainly ~~the~~used ~~issued~~to make and ~~outstanding~~break ~~stock~~rated ofcurrent ~~Naiji~~or ~~for~~regulate ~~consideration~~overload ofcurrent 24on aerial circuit,~~000,000~~ ~~shares~~which ofis ~~our~~suitable ~~common~~for ~~stock.~~systems such as electric network transformer substations and mining and industrial enterprises.

InAFLA ~~PRC,~~12/24D ~~corporate~~SF6 ~~ownership~~Load isBreak ~~determined by each shareholder's proportionate cash contribution instead of proportionate share ownership. There is no authorized capital or amount of outstanding stock established.~~Switch

AsThis aproduct ~~result,~~is ~~Naiji~~an ~~became~~indoor ~~our wholly~~high-~~owned~~voltage ~~subsidiary.~~SF6 ~~The~~load ~~shareholders~~switch ofand ~~Naiji~~switchgear ~~unanimously~~with ~~agreed~~a torated ~~enter~~voltage ~~into~~of 12KV. ~~the~~It ~~Agreement~~consists ~~for the purposes~~ of ~~restructuring~~SF6 ~~itself~~gas inas ~~anticipation~~an ofarc-extinguishing ~~becoming~~property ~~listed~~and oninsulation ~~the OTC Bulletin Board~~medium. ~~AEPI~~It ~~was~~includes three ~~formed~~switch bylocations ~~Naiji~~ for ~~this~~on/off ~~purpose.~~switching ~~Prior~~suitable tofor ~~entering~~uses ~~into~~requiring ~~the~~controls ~~Agreement;~~at ~~we had no assets, liabilities, equity and had not issued any of our shares~~different locations. AsIt aalso ~~result~~is ofadaptable ~~entering~~with ~~into~~outdoor ~~the~~type ~~Agreement;~~cable ~~the~~cabinets ~~shareholders~~however ofare ~~Naiji~~mainly ~~became~~used ~~the shareholders of AEPI in equal proportion wherein the 24,000,000 shares were allocated based on the capital contributions, or ownership of Naiji~~indoors. ~~The Agreement therefore was a non-arms length transaction.~~

~~Naiji~~Circuit ~~has~~Breakers ~~produced~~are ~~high~~electric ~~and~~devices ~~mid-voltage~~that, ~~electrical~~like ~~switchgears~~a ~~since~~fuse, ~~its~~interrupt ~~inception~~an electric current in ~~1997~~a circuit when the current becomes too high.

~~For~~VDM6/12 ~~the year ended December 31, 2008, we generated a pre-tax net loss (audited) of $(946,837) compared with a pre-tax net loss (audited) of $1,154,400 for the 2007 fiscal year end period.~~ Vacuum

WeThis ~~are~~product ~~currently~~is ~~listed~~an onindoor high voltage vacuum circuit breaker with permanent magnetic mechanism with a rated voltage of 12KV and the ~~OTCBB~~three-phase ~~under~~alternating current of 50Hz and is used to switch on/off various types of electrical load. It is suitable for various types of electrical networks however used especially in industries requiring the ~~symbol~~generation of ~~"AEPW~~higher voltages and longer operating times."

~~Our~~VS1 ~~Headquarters~~12/24 Vacuum Circuit Breaker

~~Our~~This ~~world~~product ~~headquarters~~is ~~are~~the ~~located~~outdoor atcounterpart ~~Asia Electrical Power Industrial Zone, Songgang Road, Bao'an District, Shenzhen. (Province~~ of ~~Guangdong),~~the ~~China.~~VDM6/12 ~~Our phone number is +86 755 2823 1993, and our fax number is +86 755 2823 1996, and our web-site is asiaelectricalgroup~~Vacuum.~~com.~~

~~Our~~AZW ~~Product~~12/24 ~~Line~~Outdoor ~~and~~Circuit ~~New Products~~ Breaker

WeThis ~~design,~~product ~~manufacture~~is ~~and~~an ~~market~~indoor ~~electrical~~high ~~power~~voltage ~~systems~~vacuum ~~designed~~circuit tobreaker ~~monitor~~with ~~and~~permanent ~~control~~magnetic mechanism ~~the~~with ~~flow~~a rated voltage of ~~electrical~~12KV-24KV ~~energy~~and the three-phase alternating current of 50Hz and is used to ~~provide~~switch ~~protection~~on/off tovarious ~~motors,~~types ~~transformers~~of ~~and~~electrical ~~other~~loads. ~~electrically~~It ~~powered~~is ~~equipment~~suitable for various types of electrical networks however used especially in industries requiring the generation of higher voltages and longer operating times.

WeBP1/BP2 ~~carry~~Vacuum aCircuit wide range of products which are generally configured together in various combinations to form a whole electric power and management system. The combinations vary depending on the needs of the customer and design specifications.Breaker

~~Our~~We ~~produce~~do ~~line~~not ~~consists~~manufacture ofthis ~~switchgears~~product; rather, ~~load~~it ~~break~~is ~~switches~~imported (by suppliers in the Ukraine. It has a vacuum circuit ~~breakers),~~breaker ~~and~~with ~~branch~~permanent ~~cabinets,~~magnetic ~~and~~mechanism ~~each~~with isa ~~described~~rated ~~below:~~voltage of 10KV/12KV/24KV.

~~Switchgears~~Branch ~~are~~Cabinets ~~used~~act inas ~~combination with associated control, measurement, protection and command devices. Switchgears are commonly used in association with electric power systems, or grids, with the combination of~~ electrical ~~disconnects~~transfer ~~and/or~~stations ~~circuit~~that ~~breakers~~connect ~~used to isolate~~ electrical ~~equipment.~~cables ~~Switchgears~~for ~~are used both~~ distribution to ~~de-energize~~various ~~equipment to allow work to be done and to clear faults downstream~~points.

~~SRM 16-12/24 SF6 GIS Ring Main Unit~~4

~~This~~ADF ~~product~~630 isIndoor ~~used~~Cable in conjunction with existing power systems to pass electrical current from one area to another to allow for continuous flow of electricity. This product uses SF6 sulphurhexaflouride, a non-poisonous electronegative gas as insulation to protect the components. This product also has arc Cabinet

4This product is used for the cable connection and branching connection between various points. The cabinet crust is made of 2 millimeters of stainless steel plate. Electrically charged parts are structured with complete insulation and air tight seal. This product is waterproof and widely used in conjunction with our product line mentioned above.

~~extinguishing~~ADF properties through the use of circuit breakers. An arc is sparking which results when there are higher than normal levels of current and results in increased temperature in the unit. This occurs when the level of electricity used at one time exceeds a maximum level. The circuit breaker detects excessive power demands in a circuit and self-interrupts the arc when high levels of current occur. It is used primarily in connection with the generation, transmission, distribution and conversion of electric power. This product consists of the AFL 12630/242 DOutdoor ~~Load~~Cable ~~Break Switch, VDM6/12, VS1 12/24 and the BP1 Vacuum Circuit Breakers. This product is suitable for end-user or network node.~~ Cabinet

~~AGW~~This ~~12/24~~product ~~Outdoor~~is ~~Ring~~the ~~Main~~outdoor ~~Unit~~counter part of the ADF 630 Indoor Cabinet.

~~This~~Our product issales ~~the~~for ~~outdoor~~2009 ~~counterpart~~are ofsegregated ~~the~~as ~~SRM 16-12/24 SF6 GIS Ring Main Unit with automatic temperature control. This product consists of the VS1-12/24, VDM6-12 and BP series vacuum circuit breakers and the AFL 12/24D Load break switch.~~follows:

AGN 12/24 SF6 Ring Main Unit


Product	Percent of Total Sales
Switchgears		40	%
Branch Cabinets		14	%
Circuit Breakers		46	%

~~This~~During ~~product~~fiscal is2009 ~~similar~~and ~~to the SRM 16-12/24 SF6 GIS Ring Main Unit however it consist of the VS1-12/24~~2008, ~~VDM6-12~~domestic ~~and~~(PRC) sales BPcomprised ~~series~~99.3% ~~vacuum circuit breakers~~ and ~~the~~98.3% ~~AFL~~respectively ~~12/24D~~of ~~Load break switch~~total sales.

~~KYN~~During ~~12/24~~fiscal ~~Metal~~2009 ~~Clad~~and ~~Switchgear~~2008, we spent approximately $162,619 and $32,775, respectively on research and development costs. We believe that amounts spent on research and development are necessary for us to remain competitive in the market, and thus, such amounts may not necessarily be passed on directly to our customers. Amounts spent to date complying with environmental regulations have been insignificant. We believe that we meet all environmental regulations, and not foresee environmental regulations having a material adverse impact on our business in the immediate future.

~~This~~New ~~product is a complete set of distribution devices with 3.6 -2KV, 24KV used mainly in power plants, and mining industries.~~Products

~~Load~~We ~~Break~~endeavor ~~Switches~~to ~~interrupts~~enhance ~~normal~~our ~~load~~product ~~currents~~line by improving existing products and/or introducing new products to the marketplace. We have developed and are currently testing gas insulated switchgears to be used in ~~low~~the ~~voltage~~power distribution ~~networks~~system of power plants and sub-stations, as well as an enhancement to existing switchgears which would afford applicability to other markets, such as power plants. We expect to introduce both products during the fourth quarter of 2009. These new products will allow us to enter new markets and attract new customers.

~~EK24 GIS Load Break Switch~~Warranty

~~This~~We ~~product~~offer isa anwarranty ~~indoor~~program ~~high-voltage~~designed ~~SF6~~to ~~load~~attract ~~switch~~ and ~~switchgear~~retain ~~with~~customers. During the first year following a ~~rated~~product ~~voltage~~sale, ofwe ~~12KV/24KV.~~will Itreplace ~~consists~~or ofrepair ~~SF6~~any ~~gas~~product asfree anof ~~arc-extinguishing~~charge ~~property~~to ~~and~~the ~~insulation~~customer, including ~~medium~~shipping charges. ~~This~~After ~~product~~the ~~includes~~first ~~three~~year, ~~switch~~for ~~locations~~a ~~for~~period ~~on/off~~of ~~switching~~nine ~~suitable~~years ~~for~~thereafter, ~~uses~~we ~~requiring~~will repair ~~controls~~any atproduct ~~different~~free ~~locations.~~of ~~This~~labor ~~product~~charge within 24 hours after receiving the customer complaint. The customer is ~~adaptable~~required, ~~with~~however, ~~outdoor~~to ~~type~~pay ~~cable~~for ~~cabinets~~replacement parts.

~~AFL~~Raw ~~12/24D Load Break Switch~~Materials

~~This~~We purchase various finished products to manufacture and assemble our product isline. anWe purchase ~~indoor~~metal ~~high-~~enclosures which house our branch cabinets. We also purchase voltage ~~SF6~~and ~~load~~current transformers, ~~switch~~indicators, fuse and ~~switchgear~~fuse ~~with~~holders, aand ~~rated~~other ~~voltage~~finished ofproducts, ~~12KV~~which we assemble into finish products. ItThe ~~consists~~metal ofenclosures ~~SF6~~are ~~gas~~purchased asfrom anShenzhen ~~arc-extinguishing~~Keji ~~property~~Electrical ~~and~~Equipment Manufacturing ~~insulation~~Co. ~~medium~~Ltd. ~~This~~located ~~product~~in ~~includes~~Shenzhen ~~three~~PRC. ~~switch~~Our ~~locations~~President ~~for~~is ~~on/off~~a ~~switching~~major ~~suitable~~shareholder ~~for~~of ~~uses~~this supplier, ~~requiring~~however, ~~controls~~we atbelieve ~~different~~that ~~locations.~~the ~~This~~ product pricing from this supplier is ~~adaptable~~consistent with pricing ~~outdoor~~from ~~type~~other ~~cable~~suppliers ~~cabinets~~in the area. We purchase our finished goods from a variety of suppliers. While we may maintain single sources for some of the finished goods, we believe that other supply sources for such products are available if necessary at competitive pricing.

~~AFW 12/24 Overhead Load Break Switch~~5

~~This~~Marketing ~~product is an outdoor high-voltage SF6 load switch is the outdoor overhead type distribution equipment with the rated voltage of 12KV~~ and the three-phase alternating current of 50Hz. It is mainly used to make and break rated current or regulate overload current on aerial circuit, which is suitable for systems such as electric network transformer substations and mining and industrial enterprises.Markets

~~AFLA~~We ~~12/24D~~market ~~SF6~~our ~~Load~~products ~~Break~~principally ~~Switch~~through our internal sales team. We have a total of 45 sales personnel in our company located at 20 regional sales offices throughout PRC. We also have four sales managers that supervise the regional offices. Our sales persons are compensated on a salary basis coupled with a year end bonus based on achievement. All sales orders are directed to the operations office in Shenzhen where our products are manufactured and assembled.

~~This~~Our ~~product~~main ismarketing anstrategies indoor high-voltage SF6 load switch and switchgear with a rated voltage of 12KV. It consists of SF6 gas as an arc-extinguishing property and insulation medium. It includes three switch locations for on/off switching suitable for uses requiring controls at different locations. It also is adaptable with outdoor type cable cabinets however are ~~mainly~~premised ~~used indoors.~~on:

~~Circuit~~• ~~Breakers~~The ~~are~~efforts ~~electric~~of ~~device~~our ~~that,~~sales ~~like~~staff ato ~~fuse~~obtain new customers. Management oversees the efforts of our sales staff and makes adjustments to our marketing strategy as appropriate in response to market conditions. Management approves all marketing strategies carried out by our sales staff. We review monthly regional market reports of each branch office and make adjustments to our marketing strategies as market conditions vary. In addition to marketing to tradition commercial/residential customers, ~~interrupts~~we analso ~~electric~~keep ~~current~~abreast of news and development in arural ~~circuit~~areas ~~when~~where ~~the~~contracts ~~current~~will ~~becomes~~be ~~too~~awarded ~~high~~to supply equipment for all aspects of electrical network implementation by the PRC.

~~VDM6/12~~• ~~Vacuum~~Effective client relations management to maintain our customer base and to encourage referrals through existing customers. In maintaining customer relations, our sales staff offer technical support, tend to customer service matters, and arrange for on site visits from our technical staff so that customer questions or concerns are addressed in a timely manner.

~~This~~• ~~product~~Marketing iscampaigns anlaunched ~~indoor~~throughout ~~high~~the ~~voltage~~PRC, ~~vacuum~~promotional ~~circuit~~materials, ~~breaker~~and ~~with~~advertising ~~permanent~~in ~~magnetic~~trade ~~mechanism~~magazines ~~with a rated voltage of 12KV~~ and ~~the~~billboards ~~three-phase alternating current of 50Hz~~ and isat ~~used~~trade ~~to switch on/off various~~ exhibitions.

5Management believes that our marketing strategies have been effective in achieving desired levels of revenues and therefore implementation of these strategies has been consistent. We also participate in industry exhibitions and trade fairs to be held from time to time in various regional cities in the PRC, including, Harbin, Shenyang, Beijing, Guangzhou, Jinan, Nanning and Shanghai.

~~types~~Our oftargeted ~~electrical~~markets ~~load.~~consist ~~It is suitable for various types~~ of ~~electrical networks however used especially in industries requiring the generation of higher voltages and longer operating times.~~:

~~VS1~~• ~~12/24~~Residential ~~Vacuum~~and ~~Circuit~~commercial ~~Breaker~~developers or contractors which may require expansion of existing power systems to new areas. Our sales staffs regularly keep in contact with developers and contractors for future referrals to service any new development projects. We also seek new developers and contractors through referrals from existing customers, or community resources (newspapers, trade magazines, etc.).

~~This~~• ~~product~~Wholesale ismanufactures ~~the~~who ~~outdoor~~may ~~counterpart~~make bulk purchases. We may offer a discount on bulk purchases and or discounts if we receive referrals from new customers. Manufacturers may keep promotional materials of ~~the~~ours ~~VDM6/12~~in ~~Vacuum~~efforts to promote our products to their customer base.

~~AZW~~• ~~12/24~~Electrical ~~Outdoor~~equipment ~~Circuit~~installation ~~Breaker~~companies who may refer us to potential customers. Installation companies who are also licensed electricians appointed by government authorities also have their own customer base from which we may receive referrals. We use a variety of installation companies as our products require installation by these licensed electricians and by disbursing our installation hires throughout the region; we introduce our products to these electricians who may refer our products to their customers.

~~This~~• ~~product~~Electrical isBureaus anof ~~indoor~~urban ~~high~~and ~~voltage~~rural ~~vacuum~~cities ~~circuit~~who ~~breaker~~may ~~with~~award ~~permanent~~contracts ~~magnetic~~to ~~mechanism~~us ~~with~~to aservice ~~rated~~various ~~voltage~~existing ofor ~~12KV-24KV~~new ~~and~~transportation ~~the~~developments ~~three-phase~~such ~~alternating~~as ~~current~~airports, ofsubway ~~50Hz~~stations, ~~and~~etc. isThey ~~used~~also may require certain areas to ~~switch~~be ~~on/off~~networked ~~various~~in ~~types~~order ofto ~~electrical~~distribute ~~load.~~power Itto isthese ~~suitable~~areas. ~~for~~We ~~various~~keep ~~types~~abreast ofon ~~electrical~~new ~~networks~~rural ~~however~~and ~~used~~urban ~~especially~~developments inand ~~industries~~bid ~~requiring~~on ~~the~~contracts ~~generation~~to ofservice ~~higher~~these ~~voltages~~areas ~~and~~which ~~longer~~require ~~operating~~development ~~times~~or expansion.

~~BP1/BP2 Vacuum Circuit Breaker~~6

WeThe domajority ~~not~~of ~~manufacture~~our ~~this~~marketing ~~product,~~efforts ~~rather,~~tend itto isgenerate ~~imported~~referrals byfrom ~~suppliers~~existing incustomers. ~~the~~We ~~Ukraine.~~place an Itemphasis ~~has~~on providing what we believe to be a ~~vacuum~~higher ~~circuit~~lever ~~breaker~~of ~~with~~customer ~~permanent~~service, ~~magnetic~~specifically relating ~~mechanism~~to ~~with~~our aon ~~rated~~site ~~voltage~~visits, ofand ~~10KV/12KV/24KV~~technical support.

~~Branch~~Product ~~Cabinets act as an electrical transfer stations that connect electrical cables for distribution to various points.~~ Distribution

~~ADF~~Within ~~630~~the ~~Indoor~~Guangdong ~~Cable~~province, ~~Cabinet~~we distribute our products through our own fleet of vans. Approximately 30% of total sales are within the Guangdong province. We contract with freight forwarders to deliver our products outside of the Guangdong province. Our contracts with freight forwarders are generally for a period of one year. The freight forwarding industry in the PRC is highly competitive, and we believe that we can engage other freight companies if necessary. Our customers generally pay for shipping charges.

This product is used for the cable connection and branching connection between various points. The cabinet crust is made of 2 millimeters of stainless steel plate. Electrically charged parts are structured with complete insulation and air tight seal. This product is waterproof and widely used in conjunction with our product line mentioned above.Competition

~~ADF~~We ~~630~~encounter significant competition from other power transmission/2distribution ~~Outdoor~~equipment companies ~~Cable~~that ~~Cabinet~~have been in the industry for a longer period of time and have a more extensive line of products than us. These industries are populated by many national or international companies, with significantly greater resources and name recognition than our company.

~~This~~The ~~product~~major iscompanies in the ~~outdoor~~power ~~counter~~transmission/distribution ~~part~~equipment market are ABB, Siemens, and Schneider Electric. In addition, other smaller manufacturers exist in this market throughout the region. There also are competitors that carry proprietary infringed products, or pirated products which are of lesser quality, resulting in a lower selling price. We believe that pricing is an important factor in competition; however, we also believe that customer service from inception throughout the ~~ADF~~life ~~630~~of ~~Indoor~~the ~~Cabinet~~product is an equal factor in competition.

Our competitors may offer a lower price given they may have stronger purchasing power due to economies of scale of their raw materials. However, our selling price includes not only the product, ~~sales~~but ~~for~~also ~~2008~~encompasses ~~are~~the ~~segregated~~customer service we provide throughout the life of our product as well ~~follows:~~as a strong warranty program. Our customer service focuses on providing regular on-site visits to address customer questions or concerns. Most of our competitors, to the best of our knowledge, do not provide similar customer service. As a result, we believe that our customer attrition rate is low.

Product	Percent of Total Sales
Switchgears	52%
Branch Cabinets	45%
Circuit Breakers	3%

Trends in the market

~~During~~With ~~fiscal~~new ~~2008~~developments ~~and~~in ~~2007~~rural areas, ~~domestic~~the (PRC) ~~sales~~will ~~comprised~~be 98accepting bids to service such areas to establish electrical networks.3 We anticipate such new developments may potentially increase our sales by 20% ~~and~~during 99fiscal 2010.9% ~~respectively~~A majority of ~~total~~our sales are generated through referrals from existing customer base. However with these new developments, we expect a substantial amount of our sales to be generated by fulfilling PRC contract bids to service rural areas in 2010.

~~During~~Intellectual fiscal 2008 and 2007, we spent approximately $32,775 and $27,000, respectively on research and development costs. We believe that amounts spent on research and development are necessary for us to remain competitive in the market, and thus, such amounts may not necessarily be passed on directly to our customers. Amounts spent to date complying with environmental regulations have been insignificant. We believe that we meet all environmental regulations, and not foresee environmental regulations having a material adverse impact on our business in the immediate future. Property

~~New Products~~ Patents

We ~~endeavor~~carry toone ~~enhance~~patent for our ~~product~~SRM ~~line by improving exiting products and~~16-12/or24 ~~introducing~~SF6 ~~new~~GIS ~~products~~Ring toMain ~~the marketplace~~Unit. We ~~have~~obtained ~~developed~~this ~~and~~patent ~~are~~from the ~~currently~~National ~~testing~~Intellectual aProperty ~~gas~~Bureau ~~insulated switchgear to be used~~ in ~~the~~April 2000. ~~power~~The ~~distribution~~patent ~~system~~life ofis ~~power~~10 years ~~plants~~ and ~~sub-stations~~expired on April 15, as2010. ~~well~~We aspatented anthis ~~enhancement~~product tobecause anwe ~~existing~~expected ~~switchgear which would afford applicability~~ to ~~other~~generate ~~markets,~~significant ~~such~~revenues asfrom this ~~power~~model ~~plants.~~and Wedesired ~~expect~~ to ~~introduce~~protect ~~both~~ourselves from ~~products~~piracy ~~during~~of the ~~fourth quarter of 2009~~product. ~~These~~However, ~~new~~despite ~~products~~the ~~will~~patent, ~~allow~~others ushave tocontinuously ~~enter~~pirated ~~new~~this product ~~markets~~in ~~and~~the ~~attract new customers~~marketplace.

~~Warranty~~7

6We do not carry any patents for our other products due to the cost of obtaining a patent outweighs the benefits as intellectual property laws in PRC are relatively new and enforcement to our knowledge is rare. Since PRC joined the World Trade Organization, the Trademark Law was amended in 2001 and Implementing Rules in late 2002, and amended its copyright law. Recent changes in the enforcement of copyright infringement in PRC have included stiffer penalties for patent, trademark or copyright infringement, the use of preliminary injunctions, and added criminal liability as an available remedy to trademark infringement.

We offer a warranty program designed to attract and retain customers. During the first year following a product sale, we will replace or repair any product free of charge to the customer, including shipping charges. After the first year, for a period of nine years thereafter, we will repair any product free of labor charge within 24 hours after receiving the customer complaint. The customer is required, however, to pay for replacement parts. Trademarks

~~Raw~~We ~~Materials~~do not have any registered trademarks or trade names.

We purchase various finished products to manufacture and assemble our product line. We purchase metal enclosures which house our branch cabinets. We also purchase voltage and current transformers, indicators, fuse and fuse holders, and other finished products, which we assemble into finish products. The metal enclosures are purchased from Shenzhen Keji Electrical Equipment Manufacturing Co. Ltd located in Shenzhen PRC. Our Chairman is a major shareholder of this supplier, however, we believe that the product pricing from this supplier is consistent with pricing from other suppliers in the area. We purchase our finished goods from a variety of suppliers. While we may maintain single sources for some of the finished goods, we believe that other supply sources for such products are available if necessary at competitive pricing. Employees

~~Marketing~~ Our ~~and~~World ~~Markets~~Headquarters

We ~~market~~currently ~~our~~have ~~products~~230 ~~principally~~full-time ~~through~~employees ~~our~~and ~~internal~~approximately ~~sales~~18 ~~team.~~part-time Weemployees ~~have~~at ~~a total of 45 sales personnel in~~ our world ~~company~~headquarters located atin 20Asia ~~regional~~Electrical ~~sales~~Power ~~offices~~Industrial ~~throughout~~Zone, ~~PRC.~~Songgang WeRoad, ~~also~~Bao’an District, ~~have four sales managers that supervise the regional offices~~Shenzhen. ~~Our~~These ~~sales~~employees ~~persons~~occupy ~~are~~positions ~~compensated~~in onour amarketing, ~~salary~~quality ~~basis~~control, ~~coupled~~research and ~~with~~development, amanufacturing, ~~year~~production, ~~end~~purchasing/transportation, ~~bonus~~administration ~~based on achievement. All sales orders are directed to the operations office in Shenzhen where our products are manufactured~~ and ~~assembled~~finance departments.

~~Our~~Other ~~main~~than our sales department located at our 15 branch offices, our marketing, ~~strategies~~quality control, research and development, manufacturing, production, purchasing/transportation, administration and finance departments are ~~premised~~located ~~on:~~at our world headquarters.

oThe Marketing Department is responsible for launching advertising campaigns, market research and customer service.

The ~~efforts~~Quality ofControl ~~our~~Department ~~sales~~is ~~staff~~responsible tofor ~~obtain~~outer ~~new~~and ~~customers.~~inner ~~Management~~design ~~oversee~~specifications, ~~the~~input ~~efforts of our sales staff~~ and output ~~make~~inspection, ~~adjustments~~inventory tomanagement, ~~our~~product ~~marketing~~testing ~~strategy as appropriate in response to market conditions. Management approves all marketing strategies carried out by our sales staff. We review monthly regional market reports of each branch office~~ and ~~make~~after ~~adjustments~~installation toservice ~~our marketing strategies as market conditions vary~~support. This Indepartment ~~addition to marketing to tradition commercial/residential customers, we~~ also ~~keep~~supervises ~~abreast~~the ofproduction ~~news~~department. ~~and~~Employees ~~development~~ in ~~rural~~this ~~areas~~department ~~where~~consist ~~contracts will be awarded to supply equipment for all aspects~~ of engineers ~~electrical~~and ~~network~~other ~~implementation~~technical ~~by the PRC~~staff.

oThe Research and Development Department is responsible for innovation of new and improved technologies. The department works closely with the Quality Control Department to ensure new products are constructed within specifications. Employees in this department consist of engineers and other technical staff.

~~Effective~~The ~~client~~Production ~~relations~~Department ~~management~~is toresponsible ~~maintain~~for ~~our~~production, ~~customer~~assembly ~~base~~ and ~~to encourage referrals through existing customers~~packaging. InThe ~~maintaining~~department receives ~~customer~~all ~~relations,~~specifications ~~our sales staff offer technical support, tend to customer service matters, and arrange for on site visits~~ from ~~our~~the ~~technical~~quality ~~staff~~control ~~so that customer questions or concerns are addressed in a timely manner~~department.

oThe Purchasing and Transportation Department is responsible for fulfilling inventory orders from the quality control department, inventory management and co-ordination of delivery and installation.

~~Marketing~~The ~~campaigns~~Administration ~~launched~~Department ~~throughout~~is ~~the~~responsible ~~PRC,~~for ~~promotional~~human ~~materials~~resources, training, and ~~advertising~~payroll. inThe department ~~trade~~also ~~magazines~~evaluates ~~and~~all ~~billboards~~processes ~~and~~to atensure ~~trade~~certain ~~exhibitions~~levels of efficiency are maintained.

~~Management~~The ~~believes~~Finance ~~that~~Department ~~our~~is ~~marketing~~responsible ~~strategies~~for ~~have~~compliance ~~been~~with ~~effective~~accounting inprinciples ~~achieving~~and ~~desired~~national ~~levels~~tax laws, ofbookkeeping, ~~revenues~~preparing budgets and ~~therefore~~analysis ~~implementation~~ of ~~these~~financial ~~strategies has been consistent~~reports. WeEmployees ~~also~~in ~~participate~~this department inconsist ~~industry~~of ~~exhibitions~~senior and ~~trade~~junior ~~fairs~~staff ~~to be held from time to time in various regional cities in the PRC, including, Harbin, Shenyang, Beijing, Guangzhou, Jinan, Nanning and Shanghai~~accountants.

~~Our~~ Branch ~~targeted markets consist of;~~Offices

oAt our 15 branch offices, we have a total of 33 employees.

~~Residential~~Management ~~and~~believes ~~commercial~~that ~~developers~~relations ~~or contractors which may require expansion of existing power systems to new areas. Our sales staff regularly keeps in contact~~ with ~~developers~~its ~~and~~employees ~~contractors~~are ~~for future referrals to service any new development projects~~good. ~~e also seek new developers~~

~~and~~ITEM ~~contractors through referrals from existing customers, or community resources (newspapers, trade magazines, etc~~1A.). RISK FACTORS

oWe are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

~~Wholesale~~ITEM ~~manufactures who may make bulk purchases~~1B. WeUNRESOLVED ~~may~~STAFF offer a discount on bulk purchases and or discounts if we receive referrals from new customers. Manufacturers may keep promotional materials of ours in efforts to promote our products to their customer base.COMMENTS

oWe are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

~~Electrical~~ITEM ~~equipment~~2 installation companies who may refer us to potential customers. Installation companies who are also licensed electricians appointed by government authorities also have their own customer base from which we may receive referrals. We use a variety of installation companies as our products require installation by these licensed electricians and by disbursing our installation hires throughout the region; we introduce our products to these electricians who may refer our products to their customers. PROPERTIES

oAcquisition of Land Use Rights

~~Electrical~~In ~~Bureaus~~China, ofall ~~urban~~land ~~and~~is owned by the State or, in the rural ~~cities~~areas, ~~who~~by ~~may~~the ~~award~~local ~~contracts~~collectives. Chinese tolaw usallows toa ~~service~~private ~~various~~party ~~existing~~to oracquire ~~new~~the ~~transportation~~right ~~developments~~to ~~such~~use asland ~~airports~~and develop, ~~subway stations~~utilize, ~~etc.~~and engage ~~They~~in ~~also~~business ~~may~~relating ~~require~~to ~~certain~~the ~~areas~~land, subject to becertain ~~networked~~limitations. inUsually, ~~order~~land touse ~~distribute~~rights are ~~power~~granted tofor ~~these~~specific ~~areas~~purposes and for limited periods. WeEach ~~keep~~period ~~abreast~~may onbe ~~new~~renewed ~~rural~~at ~~and~~the expiration ~~urban~~of ~~developments~~the initial and ~~bid~~any onsubsequent ~~contracts~~terms. toAny ~~service~~changes ~~these~~in ~~areas~~use ~~which~~of the land usually require approval ~~development~~by orthe ~~expansion~~government.

~~The~~On ~~majority~~September 7, of2004, ~~our~~we ~~marketing~~entered ~~efforts~~into ~~tend~~an agreement with the PRC Government to ~~generate~~lease ~~referrals~~approximately 3.77 ~~from~~hectares ~~existing~~of ~~customers~~land for the purpose of constructing new manufacturing facilities and office space. WeThe ~~place~~lease anterm ~~emphasis~~expires on ~~providing~~January 19, ~~what~~2056. weIn ~~believe~~addition to bethe abasic ~~higher~~lease ~~lever~~cost, ofthe ~~customer~~Company reimbursed ~~service,~~the ~~specifically~~government ~~relating~~for all improvements to ~~our~~the onland, ~~site~~including ~~visits~~surrounding roads, sewers, drainage, electrical and ~~technical~~communication ~~support~~systems and compensated the former land use right holders for their losses of use of the land. All of these costs were fully paid.

~~Product~~The ~~Distribution~~original leased area was 3.77 hectares. However, the area has been reduced to 3.06 hectares due to the city’s zoning regulation enacted for the expansion of transportation routes surrounding the leased land. We have been negotiating with the government for a refund due to the reduction of acreage.

Within the Guangdong province, we distribute our products through our own fleet of vans. Approximately 30% of total sales are within the Guandong province. We contract with freight forwarders to deliver our products outside of the Guangdong province. Our ~~contracts~~Headquarters ~~with~~and ~~freight~~Manufacturing forwarders are generally for a period of one year. The freight forwarding industry in the PRC is highly competitive we believe that we can engage other freight companies if necessary. Our customers generally pay for shipping charges. Facilities

~~Competition~~Our world headquarters and manufacturing facilities are located at Asia Electrical Power Industrial Zone, Songgang Road, Bao’an District, Shenzhen, China 518105. Our phone number is +86 755 2823 1993, and our fax number is +86 755 2823 1996. We completed the construction of our world headquarters and manufacturing facilities in September 2007. The total construction cost of the new facilities was approximately $3,800,000. There is no debt outstanding with respect to our facilities.

WeOur ~~encounter~~total ~~significant~~facilities ~~competition~~consist ~~from~~of ~~other~~6 ~~power~~separate ~~transmission/distribution~~buildings ~~equipment~~located ~~companies~~on ~~that~~3.06 ~~have~~hectares. ~~been~~Building in1 ~~the~~consists of ~~industry~~7224 ~~for~~square ameters ~~longer~~and ~~period~~serves as our executive offices. [1 square foot equals 0.09290 square meters] Buildings 2, 3 and 4 consist of ~~time~~8301, 11176 and ~~have~~11176 asquare ~~more~~meters ~~extensive~~respectively, ~~line~~and ofserve as ~~products~~our ~~than~~manufacturing usand assembly facilities. ~~These~~Buildings ~~industries~~5 and 6 are ~~populated~~each by5192 ~~many~~square ~~national~~meters orand ~~international~~are used ~~companies~~as staff dormitories and recreational facilities. We believe that our facilities are modern, state ~~with~~of ~~significantly~~the ~~greater~~art ~~resources~~manufacturing ~~and~~facilities. ~~name~~We ~~recognition~~believe ~~than~~that these facilities are suitable for our administrative ~~company~~and manufacturing needs for the foreseeable future.

~~The~~We ~~major~~have ~~companies~~an inadministrative ~~the~~office ~~power~~located ~~transmission/~~at ~~distribution~~E-4, ~~equipment~~Floor ~~market~~3, ~~are~~Haijin ~~ABB~~Square, ~~Siemens~~Taizi Road, ~~and~~Nanshan District, ~~Schneider~~Shenzhen, ~~Electric~~China 518067. InThe ~~addition,~~space ~~other~~consists ~~smaller~~of ~~manufacturers~~50 ~~exist~~square inmeters ~~this~~and ~~market~~the ~~throughout~~monthly ~~the~~rent ~~region~~is approximately $500.

~~There~~We also ~~are~~have ~~competitors~~15 ~~that~~branch ~~carry~~offices ~~proprietary~~throughout ~~infringed~~PRC ~~products, or pirated products~~ which ~~are~~we oflease ~~lesser~~from ~~quality,~~unaffiliated ~~resulting~~third ~~in a lower selling price~~parties. We pay ~~believe~~approximately ~~that~~$150 ~~pricing~~per ismonth anper ~~important~~office ~~factor~~for inrent. ~~competition;~~The ~~however,~~leases weare ~~also~~generally ~~believe~~month ~~that~~to ~~customer service from inception throughout the life of the product is an equal factor in competition~~month.

Our competitors may offer a lower price given they may have stronger purchasing power due to economies of scale of their raw materials. However, our selling price includes not only the product, but also encompasses the customer service we provide throughout the life of our product as well as a strong warranty program. Our customer service focuses on providing regular on-site visits to address customer questions or concerns. Most of our competitors, to the best of our knowledge, do not provide similar customer service. As a result, we believe that our customer attrition rate is low. 9

~~Trends~~ITEM in3. ~~the~~LEGAL ~~market~~PROCEEDINGS

~~We expect a high volume of new domestic business from electricity infrastructure investments as a result of the PRC's 11th five year plan which will:~~ None

810

~~"Build~~PART new socialist rural areas, optimize and upgrade industrial structures, promote concordant development of regions, build a conservation-minded and environment-friendly society, further system reform and enhance opening-up, efficiently practice strategies to invigorate China through science and education and through human resource development, and give impetus to constructing a socialist harmonious society." - Source, www.China.org.II

~~With~~ITEM ~~new developments in rural areas, the PRC will be accepting bids to service such areas to establish electrical networks~~5. WeMARKET ~~anticipate~~FOR ~~such~~REGISTRANT’S ~~new~~COMMON ~~developments may potentially increase our sales by 25% during fiscal 2009. A majority of our sales are generated through referrals from existing customer base however with these new developments~~EQUITY, weRELATED ~~expect~~STOCKHOLDER aMATTERS ~~substantial~~AND ~~amount~~ISSUER PURCHASES ofOF ~~our~~EQUITY ~~sales to be generated by fulfilling PRC contract bids to service rural areas in 2009~~SECURITIES.

~~Intellectual~~Market ~~Property~~Information

~~Patents~~Our common stock is traded on the OTCBB under the symbol “AEPW” since May 2007. Trading of the common stock in the OTCBB market has been limited and sporadic. The table below sets forth the high and low bid prices of our common stock as reported by OTCBB, and are not necessarily indicative of actual market conditions. Further, all prices reflect inter-dealer prices without retail mark-up, mark-down, or commission and may not necessarily reflect actual transactions.

We carry one patent for our SRM 16-12/24 SF6 GIS Ring Main Unit. We obtained this patent from the National Intellectual Property Bureau in April 2000. The patent life is 10 years and expires April 2010.


Fiscal Year	Quarter	High ($)		Low ($)
2009	First Quarter		0.15		0.051
	Second Quarter		0.08		0.039
	Third Quarter		0.06		0.036
	Fourth Quarter		0.19		0.04
2008	First Quarter		2.45		1.41
	Second Quarter		2.50		0.70
	Third Quarter		1.04		0.30
	Fourth Quarter		0.40		0.05

WeHolders ~~patented this product because we expected to generate significant revenues from this model~~ and ~~desired to protected ourselves from piracy of the product~~Dividends. ~~However, despite the patent, others has continuously pirated this product in the marketplace.~~

WeAs doof ~~not~~April 12, ~~carry~~2010, ~~any~~we ~~patents~~have ~~for~~approximately ~~our~~334 ~~other~~holder ~~products~~of ~~due~~record ~~to the cost~~ of ~~obtaining~~our acommon ~~patent~~stock. ~~outweighs~~However, ~~the~~we believe ~~benefits~~that asthere ~~intellectual~~are ~~property~~additional ~~laws~~beneficial inowners ~~PRC~~of ~~are~~our ~~relatively~~common ~~new~~stock ~~and~~who ~~enforcement~~own totheir ~~our~~shares ~~knowledge~~in “street ~~is rare~~names.”

~~Since~~We ~~PRC~~have ~~joined~~not ~~the~~declared ~~World~~or ~~Trade~~paid ~~Organization,~~any ~~the~~cash ~~Trademark~~dividends ~~Law~~on ~~was~~our ~~amended~~common instock ~~2001~~or ~~and~~other ~~Implementing~~securities ~~Rules in late 2002,~~ and ~~amended~~do ~~its~~not anticipate ~~copyright~~paying ~~law.~~any ~~Recent~~cash ~~changes~~dividends in the ~~enforcement~~foreseeable offuture. ~~copyright~~Any ~~infringement~~future indetermination ~~PRC~~to ~~have~~pay cash ~~included~~dividends ~~stiffer~~will ~~penalties~~be ~~for~~at ~~patent,~~the ~~trademark~~discretion orof ~~copyright infringement,~~ the ~~use~~board of ~~preliminary~~directors ~~injunctions,~~ and ~~added~~will ~~criminal~~be ~~liability~~dependent asupon anour financial ~~available~~condition, ~~remedy~~results ~~to trademark infringement. In light~~ of ~~these~~operations, ~~new~~capital ~~amendments~~requirements, weand ~~may~~such ~~apply~~other ~~for~~factors ~~patents~~as on the board ~~remainder~~ of ~~our~~directors ~~products~~deem ~~in 2009~~relevant.

~~Trademarks~~Equity Compensation Plan Information

WeAs doof ~~not~~December 31, ~~have~~2009, ~~any~~our ~~trademarks~~Equity onCompensation ~~our~~Plan ~~trade~~Information ~~name~~is oras ~~logo.~~follows:

Employees


			Number of securities remaining
	Number of securities to be	Weighted-average	available for future issuance under
	issued upon exercise of	exercise price of	equity compensation plans
	outstanding options,	outstanding options,	(excluding securities reflected in
	warrants and rights	warrants and rights	column (a))
Plan category	(a)	(b)	(c)
Equity compensation plans approved by security holders	0	0	0
Equity compensation plans not approved by security holders	5,000,000(1)	$0.50(1)	0(1)
Total	5,000,000	$0.50	0

~~Our~~(1) ~~World~~On ~~Headquarters~~April 24, 2007, our Directors approved the granting of options to purchase a total of 5,000,000 shares of common stock under our 2007 Stock Option Plan (the “2007 Plan”) to directors, officers, employees and consultants of the Company. The exercise price per share was changed from $3.00 to $1.50 per share effective February 29, 2008, and to $0.50 per share effective November 26, 2008. All options under the plan have been granted. The options granted to each recipient were bifurcated, with half expiring June 30, 2009 and the other half expiring December 31, 2009. As of December 31, 2009, none of the granted options were exercised and therefore all the granted options have expired.

We currently have 235 full time employees and approximately 20 part-time employees at our world headquarters located in Asia Electrical Power Industrial Zone, Songgang Road, Bao'an District, Shenzhen. These employees occupy positions in our marketing, quality control, research and development, manufacturing, production, purchasing/transportation, administration and finance departments. 11

~~Other~~Recent ~~than~~Sales ~~our~~of ~~sales~~Unregistered department located at our 20 branch offices, our marketing, quality control, research and development, manufacturing, production, purchasing/transportation, administration and finance departments are located at our world headquarters.Securities

~~The~~We ~~Marketing~~had ~~Department~~no issales ~~responsible~~of ~~for~~equity ~~launching~~securities ~~advertising~~during ~~campaigns,~~fiscal ~~market~~year ~~research~~2009 ~~and~~not ~~customer~~previously ~~service~~reported.

~~The~~Issuer ~~Quality~~Purchases Control Department is responsible for outer and inner design specifications, input and output inspection, inventory management, product testing and after installation service support. This department also supervises the production department. Employees in this department consist of ~~engineers~~Equity ~~and other technical staff~~Securities.

9During the fourth quarter of fiscal year 2009, we did not make any purchases of our outstanding equity securities.

~~The~~ITEM ~~Research and Development Department is responsible for innovation of new and improved technologies~~6. ~~The~~SELECTED ~~department~~FINANCIAL ~~works closely with the Quality Control Department to ensure new products are constructed within specifications~~DATA. ~~Employees in this department consist of engineers and other technical staff.~~

~~The~~We ~~Production~~are ~~Department~~a issmaller ~~responsible~~reporting ~~for~~company ~~production,~~as ~~assembly~~defined ~~and~~by ~~packaging.~~Rule 12b-2 ~~The~~of ~~department~~the ~~receives~~Exchange ~~all~~Act ~~specifications~~and ~~from~~are not required to provide the ~~quality~~information ~~control~~required ~~department~~under this item.

~~The~~ITEM ~~Purchasing~~7. ~~and~~MANAGEMENT’S ~~Transportation~~DISCUSSION ~~Department~~AND isANALYSIS ~~responsible~~OF ~~for~~FINANCIAL ~~fulfilling~~CONDITION ~~inventory~~AND ~~orders~~RESULTS ~~from~~OF ~~the quality control department, inventory management and co-ordination of delivery and installation~~OPERATIONS.

~~The~~Cautionary ~~Administration~~Notice ~~Department~~Regarding isForward ~~responsible~~Looking ~~for human resources, training, and payroll. The department also evaluates all processes to ensure certain levels of efficiency are maintained.~~Statements

~~The~~We ~~Finance~~desire ~~Department~~to istake ~~responsible~~advantage ~~for~~of ~~compliance~~the ~~with~~“safe ~~accounting~~harbor” ~~principles~~provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements which reflect management’s current views and ~~national~~expectations ~~tax~~with ~~laws~~respect to our business, ~~bookkeeping~~strategies, ~~preparing~~products, future ~~budgets~~results and ~~analysis~~events, ofand financial ~~reports~~performance. ~~Employees~~All statements made in this ~~department~~filing ~~consist~~other than statements of ~~senior~~historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and ~~junior~~non-historical ~~staff~~information, ~~accountants~~are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

~~Branch~~Readers ~~Offices~~should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our next Annual Report on Form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

~~At our 20 branch offices, we have a total of 45 employees.~~12

~~Management believes that relations with its employees are good.~~OVERVIEW

~~ITEM~~Results ~~1A.~~of ~~RISK FACTORS~~Operation

InThe ~~addition~~following tois ~~the~~an ~~other~~analysis ~~information~~of ~~included~~our inrevenues ~~this~~and ~~Form~~gross ~~10-K~~profit, ~~the~~details ~~following risk factors should be considered in evaluating the Company’s business~~ and ~~future~~analysis ~~prospects.~~of components ~~The~~of ~~risk~~expenses, ~~factors described below are not necessarily exhaustive~~ and ~~you~~variance ~~are~~from ~~encouraged~~December 31, to2009 ~~perform~~compared ~~your own investigation with respect~~ to ~~the Company and its business. You should also read the other information included in this Form 10-K~~December 31, ~~including the financial statements and related notes~~2008.

Our business operations are conducted entirely in the PRC. Because China’s economy and its laws, regulations and policies are different from those typically found in the west and are continually changing, we face certain risks, including but not limited to those summarized below.Revenues

Risks Related To Our Business.


	2009		% Sales			2008		% Sales
Revenues		20,848,514		100	%	$	14,118,660		100	%
Cost of Sales		16,597,830		80	%		11,714,350		83	%
Gross Profit		4,250,684		20	%	$	2,404,310		17	%

~~Compliance~~Our ~~and~~revenues ~~enforcement~~for the 2009 fiscal year period were $20,848,514, which represents an increase of $6,729,854 ~~environmental~~(or ~~laws~~47.7%) ~~and~~from ~~regulations~~revenues ~~may~~of ~~cause~~$14,118,660 usfor tocomparable ~~incur~~2008 year-end ~~significant~~period. ~~expenditures~~The increase in revenues reflects generally the impact of the PRC Government initiatives which promote business expansion nationwide, which in turn increases the demand for electrical networks, and ~~resources~~also the increased economic activities when the current economic downturn is fading. The increase also reflects our marketing efforts implemented through our regional branch offices. Cost of Sales for the 2009 period was $16,597,830, which werepresents ~~may~~an ~~not~~increase ~~have~~of $4,883,480 (or 41.7%) from $11,714,350 for the 2008 year-end period. The increase in cost of sales reflects, on a percentage basis, the increase in revenues.

~~Extensive~~Expenses ~~national,~~(selling ~~regional~~ and ~~local~~administrative ~~environmental laws and regulations in PRC affect our operations~~expenses). These laws and regulations set various standards regulating certain aspects of health and environmental quality, which provide for user fees, penalties and other liabilities for the violation of these standards. We believe we are currently in compliance with all existing PRC environmental laws and regulations. However, as new environmental laws and legislation are enacted and the old laws are repealed, interpretation, application and enforcement of the laws may become inconsistent. Compliance in the future could require significant expenditures, which may adversely effect our operations. The enactment of any such laws, rules or regulations in the future may have a negative impact on our projected growth, which could in turn decrease our projected revenues or increase our cost of doing business.

WeSelling ~~face~~and ~~intense~~administrative ~~competition~~expenses ~~which~~for ~~could~~the ~~decrease~~2009 ~~our~~fiscal ~~market~~year ~~share~~were ~~and~~$3,730,012, ~~result~~which in represents an ~~inability~~increase toof ~~maintain~~$2,407,156 ~~our~~(or ~~working~~182%) ~~capital~~from ~~needs~~those ~~indefinitely~~of 2008.

We expect to encounter significant competition from other power transmission/distribution equipment companies, which have been in the industry for a longer period of time and have a more extensive line of products. These industries are populated by many national or international companies, with significantly greater resources than us. The major companies in the power transmission/ distribution equipment market are


	2009		2008
Travel and promotion	$	309,220	$	248,251
Research and development		162,619		32,775
Technical Support and warranty		37,901		39,394
Salaries and benefits		717,370		509,689
Depreciation and amortization		352,913		242,684
Executive salaries and bonuses		1,720,000		—
Other		429,989		250,063

Total Expenses	$	3,730,012	$	1,322,856

10The increase in selling and administrative expenses for the 2009 period is due principally to increases in executive salaries and bonus as well as increases in other salaries and benefits and travel and promotion. The executive salaries and bonuses increases were approved by our board of directors and the purpose of which was to keep our principal executive officers compensated at the similar level of other comparable companies. The general salaries and benefits were also increased due to the hiring of additional staff to support our increased sales levels. The staff increase also includes additional sales personnel at our branch offices. Salary benefits consist of social insurance and union fees. Travel and promotion costs increased coincident with our extended efforts of improving sales.

~~ABB,~~Operating ~~Siemens,~~Income ~~and Schneider Electric~~(Loss). ~~In addition, other smaller manufacturers exist in this market throughout the world.~~

~~These~~We ~~competitors~~generated ~~have:~~operating income for the 2009 year end period of $520,672 compared with an operating income of $56,454 for the 2008 year-end period for the reasons discussed above.

· substantially greater financial and technical resources, which may allow them to expand their operations more quickly, offer a broader range of services and offer services at more competitive prices; · more extensive and well developed marketing and sales networks, which may allow them to grow their subscriber bases more quickly and efficiently; · greater brand recognition, which may influence a subscriber's purchase decision; · larger subscriber bases, which may provide economies of scale and operating efficiencies not available to us; · longer operating histories; and · more established relationships with government officials, equipment specialists and/or other strategic partners.13

WeOther ~~are~~Income ~~dependent on a few key personnel, being our officers~~ and ~~directors and the loss of any key personnel could have a material adverse effect on our ability to carry on business~~Expenses.

WeOther ~~are~~income ~~substantially~~was ~~dependent~~$249,217 ~~upon~~for the ~~efforts~~2009 year-end ~~and~~period ~~skills~~compared ofwith ~~our executive officers~~$117,243 ~~Mr.~~for ~~Guo~~the ~~and~~2008 ~~Mrs~~period. Interest ~~Chen.~~income Wewhich dois ~~not~~income ~~have~~from ~~employment~~amounts ~~contracts~~held ~~with~~on ~~either~~deposit ~~Mr.~~was ~~Guo~~$9,602 orfor ~~Ms.~~the ~~Chan~~2009 year-end period ~~and~~compared ~~thus~~with ~~they~~$28,248 ~~have~~for nothe ~~obligation~~2008 year-end toperiod. ~~fulfill~~Interest ~~their~~expense ~~capacities~~was as$149,410 ~~executive officers~~ for ~~any~~the 2009 year ~~specified~~end period ofcompared ~~time.~~with ~~The~~$0 ~~loss~~for of the ~~services~~2008 year-end ofperiod. ~~either~~Other ofexpense for the ~~executive~~2009 ~~officers~~period ~~could~~was ~~have~~$50,029 acompared ~~material~~with $71,981 ~~adverse~~for ~~effect~~the on2008 year-end ~~our business~~period.

WeForeign ~~may~~currency ~~continue~~transaction ~~lose market share due to intellectual property piracy that exists in the PRC~~loss.

~~Through~~Foreign ~~our~~exchange ~~experience,~~loss ~~obtaining~~for a2009 ~~patent~~amounted into ~~the PRC has not prevented our products from being pirated~~$58,981 ~~and~~compared ~~enforcement in the industry is considered rare. When PRC joined the World Trade Organization, it amended its patent law~~ to ~~expand~~a ~~its~~loss ~~scope to deter the infringement~~ of ~~all~~$564 ~~types of intellectual property. An enforcement organization was created (State Intellectual Property Office)~~ for the ~~purpose~~2008 ofperiod. ~~coordinating~~The increased ~~all~~loss ~~enforcement~~reflects ~~efforts by merging~~ the ~~patent,~~increased ~~trademark~~purchases ~~and copyright offices under one authority. To date, this has not occurred. Until an enforcement structure is~~ in ~~place under one distinct authority~~euros, wewith dounfavorable ~~not foresee that enforcement of any type of copyright infringement will be achieved~~results.

WeTotal ~~believe~~Comprehensive ~~that~~Income ~~pirated products will continue in the market until penalties are enforced by the authorities, which to our knowledge is rare~~(Loss). ~~We have lost market share due to piracy, and may continue to do so until this situation is remedied.~~

WeFor ~~are~~the ~~required~~2009 fiscal year, we had a total comprehensive income of $302,645 compared to ~~pass~~comprehensive income ~~periodic~~for ~~government~~the ~~inspections~~2008 inperiod ~~order~~of $845,242. The decrease is due to ~~maintain~~the ~~our~~reasons ~~business~~discussed ~~license~~above.

WeIncome ~~obtained~~(Loss) ~~our~~Per ~~business license on June 20, 2007 for a period of 10 years ended June 20, 2017~~Share. After this period expires, we are subject to another inspection in order to extend our business license for another 10 years. This inspection includes complying with certain environmental laws and regulations. The continual extension of our business license is not guaranteed and we may not have the resources necessary to implement the changes in our business processes to comply with environmental laws in place. If we fail to obtain our business license, our operations would terminate until we can achieve compliance, which will have a devastating impact on our business.

~~Independent~~Basic ~~research~~income ~~institutes~~per ~~appointed~~share byapplicable ~~government~~to ~~authorities~~common ~~must~~stock ~~test~~holders ~~and~~was ~~approve~~$0.01 ~~our~~per ~~new~~share ~~products. This~~in ~~process~~2009 ~~may~~period compared ~~impede~~to ~~the~~a ~~launch~~loss ofper ~~new~~share ~~products~~of byless ~~us,~~than ~~and~~$0.01 ~~potentially~~for ~~reduce~~the ~~future~~2008 ~~profits~~period.

~~All~~Current ofTrends ~~our products must be tested by the Xi-An High Voltage Apparatus Research Institute located~~ in ~~Shenzhen and must pass all~~ the ~~required tests in order to obtain a clearance certification for product launch~~Industry. The process of obtaining a clearance certificate is approximately eight weeks and may be longer depending on the type of product. Delays in obtaining a clearance certificate will impact our projected cash flows. The cost for this clearance process is up to $60,000 per product; however, we may incur additional costs and resources to refine our product as required. It is conceivable that we may not have these resources to obtain the clearance certificate, which also would negatively impact projected future revenues.

11We have experienced high competitive pressure since 2003 due to the increased supply of lower grade pirated products. We expect this trend to continue and, in order for us to retain our market share and increase and surpass revenues levels previously achieved, we will have to regain our competitive edge by directing resources into product innovation and refinement, research and development, marketing and advertising. We will also focus on maintaining good customer relations by providing what we believe to be a higher level of customer service. We hope to attract new customers by providing this level of service consistently throughout the life of the contract.

IfWe wehave dobeen ~~not~~able ~~continue~~to retain our market share and expect to ~~receive~~increase ~~shareholder~~our ~~loans~~customer base and level of sales with our existing methods of marketing, sales staff and customer service we ~~may~~provide. We view customer service as the most important factor in our marketing mix. As mentioned above “Trends in the Market”, with new developments in rural areas, the PRC will be ~~unable~~accepting bids to ~~meeting~~service such areas to establish electrical networks. We anticipate such new developments will increase our ~~minimum~~sales by ~~funding~~20% ~~requirements~~during 2010 fiscal year. A majority of our sales are generated through existing customer base by referrals however with these new developments.

WeLiquidity have received loans from time to time from our shareholders. However, we have no formalized agreements with our shareholders guaranteeing that certain amounts of funds will be available to us. We may exhaust this source of funding anytime. If additional funds are raised through the issuance of equity or convertible debt securities, we may not be able to fund expansion, take advantage of unanticipated acquisition opportunities, develop or enhance services or products or respond to competitive pressures. In addition, we may be required to lay-off employees. Such inability could have a material adverse effect on its business, results of operations and ~~financial~~Capital ~~condition~~Resources.

~~Due~~As toof ~~our~~December 31, ~~current stock price~~2009, if we ~~raise~~had ~~additional~~working ~~funds,~~capital weof ~~may~~$2,697,076 ~~cause~~compared ~~significant~~to ~~dilution.~~working capital Weof ~~may~~$2,208,696 ~~need~~as toof ~~raise~~December 31, ~~additional~~2008. ~~funds~~The inincrease ~~the~~is due ~~future~~principally to ~~support~~the ~~our future~~ growth. Ifof weaccounts ~~are~~receivables, ~~successful~~offset inby the ~~raising~~reclassification ~~additional~~of ~~funds,~~a ~~due~~convertible tonote ~~our~~from ~~current~~a ~~price~~long-term ofliability to ~~our~~a ~~stock,~~current ~~such~~liability ~~event~~and ~~will~~the ~~likely~~increase ~~cause~~in ~~dilution~~accounts ~~to our existing stockholders~~payables.

~~The~~Over ~~average~~the ~~selling~~next ~~price~~12 months, ofwe will require approximately $12,000,000 to sustain our ~~product~~working ~~may~~capital needs ~~decrease~~as ~~which~~follows ~~will~~based ~~reduce~~on ~~our~~projected ~~gross~~sales ~~margin.~~of $20,000,000:

The industry which we operate in has traditionally experienced a rapid erosion of selling prices due to a number of factors, including competitive pricing pressures, promotional pricing, and technological progress. The industry also experiences pricing pressure during periods of economic slowdown as companies attempt to liquidate excess inventory. We anticipate that the average selling prices of our products will decrease in the future due to the factors stated above, which decrease future operating results.


Materials, Labor, Overhead	$	10,200,000
Selling Expenses and Administrative Expenses		1,800,000

Total	$	12,000,000

~~Our~~Sources ~~performance will depend on the introduction and acceptance~~ of ~~newly developed products~~Capital.

~~Our~~We ~~future~~expect ~~performance~~our ~~will~~revenues ~~depend~~generated onfrom ~~the~~operations ~~successful~~to ~~research~~cover our projected working capital needs; however, ~~development~~if additional capital is needed, ~~introduction~~we ~~and~~will ~~market~~explore ~~acceptance~~financing options such as shareholder loans. Shareholder loans are without stated terms of ~~new~~repayment. ~~and~~In ~~enhanced~~the ~~products~~past, ~~that~~we ~~address~~have ~~customer~~been ~~requirements~~charged interest inat athe ~~timely~~rate ~~and~~of ~~cost-effective~~6% ~~manner~~per annum. IfWe have no formal agreement that ensures that we ~~fail~~will toreceive such ~~timely~~loans. ~~introduce~~In ~~new~~the ~~and~~event ~~innovative~~shareholder ~~products~~loans are not available, ~~our~~we ~~customer~~may ~~base~~seek ~~and~~long ~~pricing~~or ~~will~~short ~~erode.~~term financing from local banks.

~~We must continuously increase the productivity of our distribution and marketing channels to increase revenues.~~14

~~Our~~We ~~distribution~~do strategy focuses primarily on developing and increasing the productivity of indirect distribution channels through resellers and distributors. If we fail to develop and cultivate relationships with significant resellers, or if these resellers are not ~~successful~~have inany ~~their~~credit ~~sales~~facilities ~~efforts, sales of our products may decrease and its operating results could suffer. Many of our resellers also sell products from other vendors that compete~~ with our products. We cannot assure that we will be able to enter into additional reseller and/or distribution agreements or that it will be able to successfully manage its product sales channels. Our failure to do any ~~of these could limit our ability to grow or sustain revenue~~lender.

~~Risks~~Plans ~~Relating~~for ~~to Doing Business in China~~Expansion.

~~If the PRC enacts regulations which forbid or restrict foreign investment, our ability to grow may be severely impaired~~None.

We ~~may~~do ~~expand~~not ~~our~~know ~~operations~~of byany ~~seeking~~trends, toevents ~~develop equipment for other industries~~ or byuncertainties ~~making acquisitions of companies in related industries. Many of the rules and regulations~~ that ~~we would face~~ are ~~not~~likely ~~explicitly communicated, and we may be subject~~ to ~~rules~~have ~~that~~a ~~would~~material ~~affect~~impact on our ~~ability~~short-term ~~to grow, either internally~~ or ~~through~~long-term ~~acquisition~~liquidity of other ~~Chinese~~than orthose ~~foreign~~factors ~~companies.~~discussed ~~There are also substantial uncertainties regarding the proper interpretation of current laws and regulations of the PRC~~above. New laws or regulations that forbid foreign investment could severely impair our businesses and prospects. Additionally, if the relevant authorities find us in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

·Material Commitments.

~~levying~~We ~~fines;~~do not have any material commitments for capital expenditures.

·Seasonal Aspects.

~~revoking~~Our business is seasonal in that sales are particularly low in February, due to the Chinese New Year holiday, during which time our business ~~and~~is ~~other~~closed ~~licenses~~up ~~and;~~to 2 weeks. Sales in March are usually higher than usual levels as a result.

12Off Balance Sheet Arrangements.

·We have no off balance sheet arrangements.

~~requiring that we restructure our ownership or operations~~15

~~Any~~CRITICAL ~~deterioration~~ACCOUNTING ofPOLICIES, ~~political~~JUDGMENTS ~~relations~~AND ~~between the United States and the PRC could impair our operations~~ESTIMATES.

~~The~~Critical ~~relationship~~Accounting ~~between the United States and the PRC is subject to sudden fluctuation and periodic tension~~Estimates. Changes in political conditions in the PRC and changes in the state of Sino-U.S. relations are difficult to predict and could adversely affect our operations or cause potential acquisition candidates or their goods and services to become less attractive. Such a change could lead to a decline in our profitability. Any weakening of relations between the United States and the PRC could have a material adverse effect on our operations, particularly in our efforts to raise capital to expand our other business activities.

~~Our~~The ~~operations~~preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and inliabilities at the ~~PRC~~date ~~are~~of ~~subject~~the tofinancial ~~significant~~statements ~~political~~and the reported amounts of revenues and expenses ~~economic~~during ~~uncertainties~~the reporting periods. The application of GAAP involves the exercise of varying degrees of judgment. The resulting accounting estimates will not always precisely equal the related actual results. Management considers an accounting estimate to be critical if:

~~Government~~• ~~policies~~Assumptions are ~~subject~~required to ~~rapid~~be change and the government of the PRC may adopt policies which have the effect of hindering private economic activity and greater economic decentralization. There is no assurance that the government of the PRC will not significantly alter its policies from time to time without notice in a manner with reduces or eliminates any benefits from its present policies of economic reform. The government of the PRC also exercises significant control over China’s economic growth through the allocation of resourcesmade, ~~controlling payment of foreign currency~~ and ~~providing~~• ~~preferential~~Changes ~~treatment to particular industries or companies. Uncertainties may arise with changing of governmental policies and measures. In addition, changes~~ in ~~laws~~estimates and regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion, imports and sources of supply, devaluations of currency, the nationalization or other expropriation of private enterprises, as well as adverse changes in the political, economic or social conditions in the PRC, could have a material adverse effect on our ~~business, results of operations and~~ financial ~~condition~~statements.

~~Price~~The ~~controls~~following ~~may~~table ~~affect~~presents ~~both~~information about our ~~revenues~~most critical accounting estimates and ~~net~~the effects ~~income.~~of hypothetical changes in the assumptions used when making such estimates:

~~The~~Balance ~~laws~~Sheet There is a risk of How did we arrive How accurate have we How likely to change in Account change because? at these Estimates? been in the ~~PRC~~past? the future? Accounts Receivable We provide ~~for~~an Allowance For Doubtful Accounts (AFDA) based on the ~~government~~age toof ~~fix~~each ~~and~~account. ~~adjust~~Uncollectible ~~prices~~accounts are also written off, particularly when bankruptcy occurs. ~~Although~~AFDA weprovisions are ~~not~~made ~~presently~~by ~~subject~~analyzing toagings ~~price~~of ~~controls~~the accounts receivable. These estimates of AFDA have been accurate in ~~connection~~the ~~with~~past. This method of determining AFDA will likely not change as the ~~sale~~method used has provided accurate results. Inventory We review the net realizable value of our ~~products,~~inventory to ensure that it is ~~possible~~recorded ~~that~~at ~~price~~a ~~controls~~lower ~~may~~of becost ~~imposed~~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 ~~future~~market. ToOur procedure has produced reliable results. We do not expect any change in procedure. Fixed Assets We calculate our depreciation using the ~~extent~~straight ~~that~~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 ~~price~~income ~~control,~~taxes ~~our~~in ~~revenue~~China. The determination of the tax liability is based on calculations which are further based on estimates such as, ~~gross~~for ~~profit~~example, ~~gross~~allowances ~~margin~~for ~~and~~bad ~~net~~debt. ~~income~~These ~~will~~estimates bemay ~~affected~~change ~~since~~from time to time and the ~~revenue~~final wetax ~~derive~~outcome ~~from~~may increase or decrease our ~~sales~~income ~~will~~tax beexpense ~~limited~~provision ~~and,~~made. ~~unless~~Income ~~there~~tax provision is ~~also~~calculated ~~price~~based ~~control~~ on the ~~products~~statutory ~~that~~tax werate ~~purchase~~and ~~from~~level ~~our~~of ~~suppliers,~~operating weincome. ~~may~~Operating ~~face~~income nois ~~limitation~~partially based on ~~our~~various ~~costs~~estimates. ~~Further,~~These ifestimates ~~price~~may ~~controls~~differ ~~affect~~from ~~both~~actual ~~our~~results. ~~revenue~~This calculation is made monthly and ~~our~~installments ~~costs,~~are ~~our~~made ~~ability~~toward tothe betax ~~profitable~~liability. ~~and~~Our estimates currently have been in line with the ~~extent~~actual ofassessment in our ~~profitability~~tax ~~will~~liability. beIncome ~~effectively~~tax ~~subject~~provisions are calculated monthly. Our estimates may change from time to ~~determination~~time byand this may affect the ~~applicable~~income ~~regulatory~~tax ~~authorities~~provision. inWe ~~the~~may ~~PRC~~under or over remit our installments based on how our estimates differ from actual results.

~~Our operations may not develop in the same way or at the same rate as might be expected if the PRC economy were similar to the market-oriented economies of OECD member countries.~~16

~~The~~Revenue ~~economy of the PRC has historically been a nationalistic, “planned economy,” meaning it functions and produces according to governmental plans and pre-set targets or quotas~~Recognition. In certain aspects, the PRC’s economy has been making a transition to a more market-oriented economy, although the government imposes price controls on certain products and in certain industries. However, we cannot predict the future direction of these economic reforms or the effects these measures may have. The economy of the PRC also differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development (the “OECD”), an international group of member countries sharing a commitment to democratic government and market economy. For instance:

·Revenue is recognized when the product is delivered to customers. In determining delivery, consideration is given to the following: whether an arrangement exists with the buyer; whether delivery has occurred; whether the price to the buyer is fixed or determinable; and that collection is reasonably assured. No provision is made for any right of return that may exist as the criteria specified in pronouncement of the Financial Accounting Standards (SFAS) have been met.

~~the~~ITEM ~~level~~7A. ofQUANTITATIVE ~~state-owned~~AND ~~enterprises~~QUALITATIVE inDISCLOSURES ~~the~~ABOUT ~~PRC,~~MARKET ~~as well as the level of governmental control over the allocation of resources is greater than in most of the countries belonging to the OECD;~~RISK.

·Not Applicable.

~~the level of capital reinvestment is lower in the PRC than in other countries that are members of the OECD;~~17

13ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

·The Financial Statements and Supplementary Data follow Part III-Item 15 below.

~~the~~ITEM ~~government~~9. ofCHANGES ~~the~~IN ~~PRC~~AND ~~has~~DISAGREEMENTS aWITH ~~greater~~ACCOUNTANTS ~~involvement~~ON inACCOUNTING ~~general~~AND inFINANCIAL ~~the economy and the economic structure of industries within the PRC than other countries belonging to the OECD;~~DISCLOSURE.

·None

~~the~~ITEM ~~government~~9A(T). ofCONTROLS ~~the~~AND ~~PRC imposes price controls on certain products and our products may become subject to additional price controls; and~~PROCEDURES.

·Evaluation of Disclosure Controls and Procedures.

The Securities and Exchange Commission defines the ~~PRC~~term ~~has~~“disclosure ~~various~~controls ~~impediments~~and inprocedures” ~~place~~to mean a company’s controls and other procedures that ~~make~~are itdesigned ~~difficult~~to ~~for~~ensure ~~foreign~~that ~~firms~~information required to ~~obtain~~be ~~local~~disclosed ~~currency~~in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, asprocessed, ~~opposed~~summarized toand ~~other~~reported, ~~countries~~within ~~belonging~~the totime periods specified in the Commission’s ~~OECD~~rules ~~where~~and ~~exchange~~forms. Our chief executive officer and chief financial officer have concluded, based on the evaluation of ~~currencies~~the iseffectiveness ~~generally~~of ~~free~~the ~~from~~disclosure ~~restriction~~controls and procedures by our management, with the participation of our chief executive officer and chief financial officer, as of the end of the period covered by this report, that our disclosure controls and procedures were effective for this purpose, except as noted below under “Changes in Internal Controls.”

AsManagement’s aReport ~~result~~on ofInternal ~~these~~Control ~~differences,~~Over ~~our~~Financial ~~business may not develop in the same way or at the same rate as might be expected if the economy of the PRC were similar to those of the OECD member countries~~Reporting.

~~All~~The ~~our~~management ~~officers~~of Asia Electrical Power International Group Inc. is responsible for establishing and ~~directors~~maintaining ~~reside~~adequate ~~outside~~internal ofcontrol ~~the~~over ~~United~~financial ~~States,~~reporting. itThe ~~may~~Company’s beinternal ~~difficult~~control over ~~for~~financial ~~you~~reporting is a process designed to ~~enforce~~provide ~~your~~reasonable ~~rights~~assurance ~~against~~regarding ~~them~~the reliability orof ~~enforce~~financial ~~United~~reporting ~~States~~and ~~court~~the ~~judgments~~preparation ~~against~~of ~~them~~financial statements for external purposes in ~~the~~accordance ~~PRC~~with U.S. generally accepted principles.

~~All~~Because ~~our directors and executive officers reside in the PRC and substantially all~~ of ~~our~~its ~~assets~~inherent ~~are~~limitations, ~~located~~internal incontrol ~~the~~over ~~PRC.~~financial Itreporting may ~~therefore~~not beprevent ~~difficult~~or detect ~~for~~misstatements. ~~United~~Therefore, ~~States~~even ~~investors~~those tosystems ~~enforce~~determined ~~their legal rights,~~ to ~~effect~~be ~~service~~effective ofcan ~~process~~only ~~upon~~provide reasonable ~~our~~assurance ~~directors~~with orrespect ~~officers or~~ to ~~enforce~~financial ~~judgments~~statement ofpreparation ~~United~~and ~~States~~presentation. ~~courts~~Also, projections ~~predicated~~of ~~upon~~any ~~civil~~evaluation ~~liabilities and criminal penalties~~ of ~~our~~effectiveness ~~directors~~to ~~and~~future ~~officers~~periods ~~under~~are ~~federal~~subject ~~securities~~to ~~laws.~~risks ~~Further,~~that itcontrols may isbecome ~~unclear~~inadequate ifbecause ~~extradition~~of ~~treaties~~changes ~~now~~ in ~~effect~~conditions, ~~between~~or ~~the~~that ~~United States and~~ the ~~PRC~~degree ~~would permit effective enforcement~~ of ~~criminal~~compliance ~~penalties~~with of the policies ~~federal~~and ~~securities~~procedures ~~laws~~may deteriorate.

WeAs ~~may~~of ~~have~~December 31, ~~limited~~2009, ~~legal~~management ~~recourse~~assessed ~~under~~the ~~Chinese~~effectiveness ~~law~~of ifthe ~~disputes~~Company’s ~~arise~~internal ~~under~~control over ~~contracts~~financial ~~with~~reporting ~~third~~based ~~parties~~on the criteria for effective internal control over financial reporting established in “Internal Control- Integrated Framework,” issued by the Committee of Sponsoring Organizations “(“COSO”) of the Treadway Commission. Management’s assessment including an evaluation of the design of the Company’s internal control over financial reporting and testing the operational effectiveness of its internal control over financial reporting.

~~Almost~~Based ~~all~~on ofthis ~~our agreements with our employees and third parties~~assessment, ~~including~~management ~~our~~determined ~~supplier and customers~~that, ~~are governed by the laws of the PRC. The legal system in the PRC is a civil law system based on written statutes. Unlike common law systems, such~~ as ~~we have in the United States, decided legal cases have little precedential value in this system. The government~~ of ~~the PRC has enacted some laws and regulations dealing with matters such as corporate organization and governance~~December 31, ~~foreign investment~~2009, ~~commerce, taxation and trade. However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and~~ our ~~ability~~internal controls toover ~~enforce~~financial ~~commercial~~reporting ~~claims~~was oreffective to ~~resolve~~provide ~~commercial~~reasonable ~~disputes~~assurance isregarding ~~unpredictable. The resolution of these matters may be subject to~~ the reliability ~~exercise~~ of ~~considerable~~financial ~~discretion~~reporting ~~by agencies of the PRC,~~ and ~~forces unrelated to~~ the ~~legal~~preparation ~~merits~~ of afinancial ~~particular~~statements ~~matter~~for orexternal purposes ~~dispute~~in ~~may~~accordance ~~influence~~with ~~their determination~~U. Any rights we may have to specific performance or to seek an injunction under Chinese law are severely limited, and without a means of recourse by virtue of the Chinese legal system, we may be unable to prevent these situations from occurringS. ~~The~~generally ~~occurrence~~accepted ofaccounting ~~any such events could have a material adverse effect on our business, financial condition and results of operations~~principles.

~~Because~~This weReport ~~may~~does not beinclude ~~able~~an toattestation ~~obtain~~report ~~business~~of ~~insurance~~our inregistered ~~the~~public ~~PRC,~~accounting wefirm regarding ~~may~~our ~~not~~internal becontrols ~~protected~~over ~~from~~financial ~~risks~~reporting. ~~that~~The ~~are~~disclosure ~~customarily~~contained ~~covered~~under this Item 9A(T) was not subject to attestation by ~~insurance~~our inregistered public accounting firm pursuant to temporary rules of the ~~United~~SEC ~~States~~that permit us to provide only the disclosure under this Item 9A(T) in this Report.

Business insurance is not readily available in the PRC. To the extent that we suffer a loss of a type which would normally be covered by insurance in the United States, such as product liability and general liability insurance, we would incur significant expenses in both defending any action and in paying any claims that result from a settlement or judgment.18

~~Exchange~~Changes ~~controls that exist~~ in ~~the~~Internal ~~PRC~~Controls ~~may~~over ~~limit~~Financial ~~our ability to utilize our cash flow effectively~~Reporting.

WeAs ~~are~~of ~~subject~~the toend of the ~~PRC’s~~period ~~rules~~covered ~~and~~by ~~regulations~~this ~~affecting~~report, ~~currency~~we ~~conversion.~~carried ~~Any~~out ~~restrictions~~an onevaluation, ~~currency~~under ~~exchanges~~the supervision ~~may~~and ~~limit~~with ~~our~~the ~~ability~~participation toof ~~use~~our management, including our ~~cash~~Chief ~~flow~~Executive ~~for~~Officer ~~the~~and Chief ~~distribution~~Financial Officer, of ~~dividends~~the toeffectiveness ~~our~~of ~~stockholders~~the ordesign toand ~~fund~~operation ~~operations~~of weour ~~may~~disclosure ~~have~~and procedures ~~outside~~(as ofdefined ~~the~~in ~~PRC.~~Exchange ~~Conversion~~Act ofRules 13a-15(e) ~~RMB~~and ~~for~~15d-15(e)). ~~capital~~Based ~~account~~upon ~~items~~that evaluation, our ~~including~~Chief ~~direct~~Executive ~~investment~~Officer and ~~loans,~~Chief isFinancial ~~subject~~Officer toconcluded ~~governmental~~that ~~approval~~as inof the ~~PRC,~~end ~~and~~of ~~companies~~the ~~are~~period covered ~~required~~by tothis ~~open~~Annual Report on Form 10-K our disclosure controls and ~~maintain~~procedures ~~separate~~were ~~foreign~~effective ~~exchange~~to enable ~~accounts~~us ~~for~~to ~~capital~~accurately ~~account~~record, ~~items.~~process, Wesummarize ~~cannot~~and bereport certain ~~that~~information ~~the~~required ~~regulatory~~to ~~authorities~~be included ofin the ~~PRC~~Company’s ~~will~~periodic ~~not~~SEC ~~impose~~filings, ~~more~~and ~~stringent~~to ~~restrictions~~accumulate and oncommunicate ~~the~~to ~~convertibility~~our ofmanagement, including the ~~RMB,~~Chief ~~known~~Executive asOfficer ~~RMB~~and Chief Financial Officer, ~~especially~~to ~~with~~allow ~~respect~~timely todecisions ~~foreign~~regarding ~~exchange~~required ~~transactions~~disclosure.

14There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

APrior ~~downturn~~to in the ~~economy~~issuance of our financial statements, we completed the ~~PRC~~account ~~may~~reconciliations, analyses ~~slow~~and our ~~growth~~management review such that we can certify that the information contained in our financial statements for the year ended December 31, 2009, fairly presents, in all material respects, the financial condition and ~~profitability~~results of operations of the Company.

~~The~~Limitations growth of the Chinese economy has been uneven across geographic regions and economic sectors. There can be no assurance that growth of the Chinese economy will be steady or that any downturn will not have a negative effect on ~~our~~Effectiveness ~~business especially if it results in either a decreased use~~ of ~~products~~Controls such as ours or in pressure on us to lower our prices. The Chinese economy has been transitioning from a planned economy to a more market-oriented economy. Although in recent years the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and ~~the establishment of sound corporate governance in business enterprises, a substantial portion of the productive assets in China is still owned by the Chinese government~~Procedures. The continued control of these assets and other aspects of the national economy by the Chinese government could have a material adverse affect our business. The Chinese government also exercises significant control over Chinese economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Efforts by the Chinese government to slow the pace of growth of the Chinese economy could result in decreased capital expenditure by users of cement, which in turn could reduce demand for our products.

~~Any~~Our ~~adverse~~management, ~~change~~including inour ~~the~~Chief ~~economic~~Executive ~~conditions~~Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or ~~government~~our ~~policies~~internal incontrols ~~China~~will ~~could~~prevent ~~have~~all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a ~~material~~control ~~adverse~~system ~~effect~~must onreflect the ~~overall~~fact ~~economic~~that ~~growth~~there are resource constraints and the benefits ~~level~~of controls must be considered relative to their costs. Because of ~~renewable~~the ~~energy~~inherent limitations ~~investments~~in all control systems, no evaluation of controls can provide absolute assurance that all control issues and ~~expenditures~~instances inof ~~China~~fraud, ~~which~~if inany, ~~turn~~within ~~could~~the ~~lead~~Company have been detected. These inherent limitations include, but are not limited to, athe ~~reduction~~realities that judgments in decision-making ~~demand~~can ~~for~~be ~~our~~faulty ~~products~~and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and ~~consequently~~there ~~have~~can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a ~~material~~cost-effective ~~adverse~~control ~~effect~~system, onmisstatements ~~our~~due ~~businesses~~to error or fraud may occur and not be detected.

IfITEM ~~certain~~9B. ~~tax~~OTHER ~~exemptions within the PRC regarding withholding taxes are removed, we may be required to deduct corporate withholding taxes from any dividends we may pay in the future.~~INFORMATION

Under the PRC’s current tax laws, regulations and rulings, companies are exempt from paying withholding taxes with respect dividends paid to stockholders outside of the PRC. However, if the foregoing exemption is removed, we may be required to deduct certain amounts from any dividends we pay to our stockholders.None

We may be treated as a resident enterprise for PRC tax purposes after the new enterprise income tax law becomes effective on January 1, 2008, which may subject us to PRC income tax for any dividends we receive from our subsidiaries.19

~~Under~~PART the new enterprise income tax law, enterprises organized under the laws of jurisdictions outside PRC with their de facto management bodies located within PRC may be considered Chinese resident enterprises and therefore subject to Chinese enterprise income tax at the rate of 25% on their worldwide income. The new tax law, however, does not define the term de facto management bodies. If the Chinese tax authorities determine that we are a Chinese resident enterprise after the effective date of the new tax law, we will be subject to the Chinese income tax at the rate of 25% on our worldwide income, which will include any dividend income we receive from our Chinese subsidiaries. If we are required under the new tax law to pay income tax for any dividends we receive from our Chinese subsidiaries, our results of operations and the amount of dividends paid upstream to us would be materially and adversely affected.III

WeITEM ~~face~~10. ~~risks~~DIRECTORS, ~~related~~EXECUTIVE toOFFICERS ~~health~~AND ~~epidemics~~CORPORATE ~~and other outbreaks~~GOVERNANCE.

~~Our~~The ~~business~~following ~~could~~table besets ~~adversely~~forth ~~affected~~certain byinformation ~~the~~regarding effects of avian flu, SARS or another epidemic or outbreak. China reported a number of cases of SARS in April 2004. In 2005, there were reports on the occurrences of avian flu in various parts of China, including a few confirmed human cases. Any prolonged recurrence of avian flu, SARS or other adverse public health developments in China may have a material adverse effect on our ~~business operations. These could include our ability to travel or ship our products outside of China~~directors, asexecutive ~~well as temporary closure of our manufacturing facilities. Such closures or travel or shipment restrictions would severely disrupt our business operations~~ officers and ~~adversely~~certain ~~affect~~key ~~our~~employees ~~results~~as of ~~operations.~~the Wedate ~~have not adopted any written preventive measures or contingency plans to combat any future outbreak~~ of ~~avian~~this ~~flu, SARS or any other epidemic.~~report:

Risks Related to Our Stock

15Duties, Responsibilities and Experience

~~The~~Yulong ~~OTC~~Guo ~~Bulletin~~is ~~Board~~our isPresident, aChief ~~quotation~~Executive ~~system,~~Officer ~~not~~and anChairman ~~issuer~~of ~~listing~~our ~~service,~~board ~~market~~of ordirectors. ~~exchange~~Mr. Guo ~~Therefore~~was appointed as President in August 2002 and is responsible for implementing our investment projects, ~~buying~~financial budgets and ~~selling~~forecasts, ~~stock~~overseeing onresearch ~~the~~and ~~OTC~~development ~~Bulletin~~and ~~Board~~human resources and marketing. Mr. Guo is ~~not~~also asresponsible ~~efficient~~for our overall direction and various initiatives as needed ~~buying~~from time to time in sustaining our growth. Mr. Guo is currently overseeing our marketing and ~~selling~~public ~~stock~~relations efforts in maintaining current customers and attracting new clientele. From our inception in 1997 to August 2002, Mr. Guo was our General Manager and was responsible for research and development. From March 1993 through anMay 1997 ~~exchange~~Mr. Guo Asworked awith ~~result~~Shenzhen Tongke Real Estate Co., itLtd. ~~may~~as beGeneral ~~difficult~~Manager and was responsible for ~~you~~running day-to-day ~~sell~~operations ~~your~~and ~~common~~the company’s ~~stock~~financial ormanagement. ~~you~~From ~~may~~November 1983 ~~not~~through beMay 1992 ~~able~~Mr. Guo toworked ~~sell~~with ~~your~~Shenzhen Far ~~common~~East ~~stock~~Biscuit (China) Company as the Manager of Delivery and Storage Department responsible for logistics. anThe ~~optimum~~company ~~trading~~was ~~price~~engaged in production and sales of the “Kangyuan” brand biscuit. Mr. Yulong Guo received his associate degree in Electrical Mechanisms in 1980 from the Military Collage of the Chinese People’s Liberation Army.

~~The~~Xiaoling ~~OTC~~Chen ~~Bulletin Board~~ is aour ~~regulated quotation service that displays real-time quotes~~Secretary, ~~last sale prices~~ and ~~volume~~a ~~limitations~~director. ~~in over-the-counter securities~~Mrs. Chen ~~Because~~has ~~trades~~been ~~and~~our ~~quotations~~Administrative onManager ~~the~~since 2000. ~~OTC~~Her ~~Bulletin~~responsibilities ~~Board~~include ~~involve~~general aand ~~manual~~administrative ~~process~~work, ~~the~~marketing ~~market~~and ~~information~~communications, and ~~for~~human ~~such securities cannot be guaranteed~~resources. ~~In addition, quote information, or even firm quotes, may not be available~~Mrs. Chen ~~The~~also ~~manual~~manages ~~execution~~the ~~process~~staff ~~may delay order processing~~ and ~~intervening~~is ~~price~~also ~~fluctuations~~responsible ~~may~~for ~~result~~ensuring inthat operations ~~the~~are ~~failure~~run ofefficiently. aFrom ~~limit~~September 1995 ~~order~~ to ~~execute~~September 2000 orMrs. Chen ~~the~~worked ~~execution~~for ofShenzhen Libao aElectronic ~~market~~Equipment ~~order~~Development ~~at a significantly different price~~Co. ~~Execution of trades~~, ~~execution~~Ltd. ~~reporting~~as ~~and~~ the ~~delivery~~General ofOffice ~~legal~~Director. ~~trade~~The ~~confirmations~~company ~~may~~was engaged bein ~~delayed significantly. Consequently~~production, ~~one~~assembling ~~may~~and ~~not~~sales beof ~~able~~closed-circuit tomonitor ~~sell~~equipment. ~~shares~~Her responsibilities ofincluded ~~our~~general ~~common~~administrative ~~stock~~work, atmarketing ~~the~~and ~~optimum~~communications ~~trading~~and ~~prices~~human resources.

~~When~~From ~~fewer~~August 1985 ~~shares~~to ofAugust 1995, aMrs. Chen ~~security~~worked ~~are~~for ~~being~~Shenzhen ~~traded~~Far onEast ~~the~~Biscuit ~~OTC~~(China) ~~Bulletin Board~~Company, ~~volatility~~as the ofGeneral ~~prices~~Office ~~may~~Director ~~increase~~along ~~and~~with ~~price~~Mr. Guo. ~~movement~~Her ~~may~~responsibilities ~~outpace~~included ~~the~~general administrative ~~ability~~work, tocommunications-specifically ~~deliver~~with ~~accurate~~government ~~quote~~agencies, ~~information.~~and ~~Lower~~human ~~trading~~resources. Mrs. Chen ~~volumes~~received inan aassociate ~~security~~degree ~~may~~in ~~result~~Business inAdministration afrom ~~lower~~the ~~likelihood~~University of anZhongshang in ~~individual’s~~1994. ~~orders~~In ~~being executed~~1995, ~~and~~Mrs. Chen ~~current~~held ~~prices~~the ~~may~~“Political ~~differ~~and ~~significantly~~Ideological” ~~from~~post, ~~the~~a ~~price~~certification ~~one~~of ~~was~~Office Administration ~~quoted~~Procedures byand ~~the~~Communications ~~OTC~~and ~~Bulletin~~continues ~~Board~~to athold ~~the~~this ~~time~~post ofto ~~the order entry~~date.

~~Orders~~Yunbin ~~for~~Li ~~OTC~~is ~~Bulletin~~our ~~Board~~Chief ~~securities~~Financial ~~may~~Officer. ~~be canceled or edited like orders for other securities~~Mr. Li ~~All~~has ~~requests~~been tothe ~~change~~Accounting orManager ~~cancel~~of anAsia Electrical ~~order~~Power ~~must~~Equipment be(Shenzhen) ~~submitted~~Co., toLtd., ~~received~~our ~~and~~wholly ~~processed~~owned bysubsidiary, ~~the~~since ~~OTC~~January 2005. He ~~Bulletin~~is ~~Board.~~responsible ~~Due~~for tomanaging the ~~manual~~financial ~~order~~risks ~~processing~~of ~~involved~~the inCompany ~~handling~~and ~~OTC~~is ~~Bulletin~~also ~~Board~~responsible ~~trades,~~for financial ~~order~~planning ~~processing~~ and ~~reporting may be delayed~~record-keeping, ~~and~~as anwell ~~individual~~as ~~may~~financial ~~not~~reporting ~~be able~~ to ~~cancel or edit his order. Consequently, one may not able to sell shares of common stock at~~ the ~~optimum trading prices~~management.

~~The~~Jiansheng ~~dealer’s~~Xu ~~spread~~has ~~(the~~been ~~difference~~a ~~between~~Director of the ~~bid~~Company ~~and~~since ~~ask~~October 2009. ~~prices)~~Mr. Xu ~~may~~has bebeen ~~large~~a ~~and~~partner ~~may~~of Sphere ~~result~~Logic inPartners, ~~substantial~~a ~~losses~~law tofirm ~~the seller~~ of ~~securities on~~ the ~~OTC~~People’s ~~Bulletin~~Republic ~~Board~~of ifChina, for the ~~common~~past ~~stock~~five oryears. ~~other security must be sold immediately~~Mr. Xu ~~Further,~~fills ~~purchasers~~a ofnon-employee ~~securities~~director ~~may~~vacancy ~~incur~~on ~~an immediate “paper” loss due to~~ the ~~price~~Board ~~spread.~~that ~~Moreover,~~was ~~dealers~~created ~~trading~~when onDudley ~~the~~Delapenha resigned ~~OTC~~as ~~Bulletin~~a ~~Board~~director ~~may~~in ~~not~~September 2008. ~~have~~As a ~~bid~~corporate ~~price~~lawyer ~~for securities bought~~ and ~~sold~~a ~~through~~partner of the ~~OTC~~law ~~Bulletin~~firm ~~Board.~~of Sphere ~~Due~~Logic ~~to the foregoing~~Partners, ~~demand~~Mr. Xu ~~for~~is ~~securities~~highly ~~that~~experienced ~~are~~with ~~traded~~corporate ~~through~~governance, ~~the~~general ~~OTC~~business affairs ~~Bulletin~~and ~~Board~~foreign ~~may~~trade ~~be decreased or eliminated~~matters.

~~We are subject to the penny stock rules and these rules may adversely affect trading in our common stock.~~20

~~Our~~There ~~common~~are ~~stock~~no isarrangements ~~a “low-priced”~~ or ~~“penny~~understandings ~~stock”~~between ~~security~~any ~~under rules promulgated under the Securities Exchange Act~~ of ~~1934.~~our Indirectors ~~accordance~~or ~~with~~executive ~~these rules~~officers, pursuant ~~broker-dealers~~to ~~participating in transactions in low-priced securities must first deliver a risk disclosure document~~ which ~~describes~~either ~~the~~was ~~risks~~selected ~~associated~~to ~~with~~be ~~such stocks, the broker-dealer’s duties in selling the stock, the customer’s rights and remedies and certain market and other information. Furthermore, the broker-dealer must make~~ a ~~suitability~~director ~~determination~~or ~~approving~~executive ~~the customer for low-priced stock transactions based on the customer’s financial situation~~officer, ~~investment~~nor ~~experience~~are ~~and~~there ~~objectives.~~any family ~~Broker-dealers~~relationships ~~must~~among ~~also~~any ~~disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect~~ of ~~these restrictions probably decreases the willingness of broker-dealers to make a market in~~ our ~~common~~directors ~~stock, decreases liquidity of our common stock~~ and ~~increases transaction costs for sales and purchases of our common stock as compared to other securities~~officers.

~~Our~~To ~~stock~~the ~~price~~best ~~may~~of beour ~~volatile~~knowledge, during the past five years, none of our existing directors, executive officers, or control persons were involved in any of the following: (1) any bankruptcy petition filed by or against any property or business of which ~~may~~such ~~result~~person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in ~~losses~~a criminal proceeding or being subject to ~~our~~a ~~stockholders~~pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending, or otherwise limiting his involvement in any type of business, securities or banking activities; or (4) being found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

~~The~~In ~~stock markets have experienced significant price and trading volume fluctuations, and~~ the ~~market~~past ~~prices~~fiscal ~~of companies quoted on the Over-The-Counter Bulletin Board~~year, ~~the~~there ~~stock~~has ~~market in which shares of our common stock will be quoted, generally have~~ been ~~very~~no ~~volatile~~material ~~and~~change ~~have experienced sharp share price and trading volume changes. The trading price of our common stock is likely~~ to bethe ~~volatile~~procedures ~~and~~by ~~could~~which ~~fluctuate~~security holders ~~widely~~may inrecommend ~~response~~nominees to ~~many of~~ the ~~following~~smaller ~~factors,~~reporting ~~some~~company’s board of ~~which are beyond our control:~~directors.

·Board of Directors

~~variations~~We have three members serving on our board of directors. All directors hold office until the next annual stockholders’ meeting or until their death, resignation, retirement, removal, disqualification or until their successors have been elected and qualified. All actions of the board require the approval of a majority of the directors in attendance at a meeting at which a quorum is present or approval by unanimous written consent. We currently have one independent director, Jiansheng Xu, serving on our ~~operating~~board ~~results;~~of directors.

16Board Committees

·We are currently listed on the OTC Bulletin Board and are not required to have an audit committee, nominating committee or a compensation committee. Our board of directors currently performs the functions that would be delegated to the audit committee.

~~announcements~~Section 16(a) ofBeneficial ~~technological~~Ownership ~~innovations,~~Reporting ~~new services or product lines by us or our competitors;~~Compliance

·Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our executive officers and directors and every person who is directly or indirectly the beneficial owner of more than 10% of any class of security of our company to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Such persons also are required to furnish our company with copies of all Section 16(a) forms they file. Based solely on our review of copies of such forms received by us, we believe that during the fiscal year 2009, the executive officers and directors of the Company and every person who is directly or indirectly the beneficial owner of more than 10% of any class of security of the Company were in compliance with the filing requirements of Section 16(a) of the Exchange Act with the exception of our President, Mr. Guo, who was late in filing a Form 4 reporting the transfer of 2,937,245 shares of our common stock to him in one transaction.

~~changes~~Code ~~in expectations~~ of ~~our future financial performance, including financial estimates by securities analysts and investors;~~Ethics

·On April 8, 2008, we adopted a Code of Ethics in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. The Code of Ethics applies to our principal executive officer, our principal financial and accounting officer and our other senior executive and financial officers. The Code of Ethics is intended to promote honest and ethical conduct, full and accurate reporting, and compliance with laws as well as other matters, which is filed hereto as Exhibit 14 under Item 15.

~~changes in operating and stock price performance of other companies in our industry;~~21

·ITEM 11. EXECUTIVE COMPENSATION

~~additions~~The table below summarizes all compensation awarded to, earned by, or ~~departures~~paid ofto ~~key~~our ~~personnel;~~executive officers by any person for all services rendered in all capacities to us for the fiscal year ended December 31, 2009 and December 31, 2008.

·Summary Compensation Table

future sales of our common stock.


													Nonqualified
											Nonequity		deferred
Name and							Stock		Option		incentive plan		compensation		All other
principal			Salary		Bonus		awards		awards		compensation		earnings		compensation		Total
position	Year		($)		($)		($)		($)		($)		($)		($)		($)
Yulong Guo, President, CEO & Chairman of the Board		2009		400,000		150,000		0		0		0		0		0		550,000
Yulong Guo, President, CEO & Chairman of the Board		2008		5,800		0		0		0		0		0		0		5,800
Xiaoling Chen, Secretary & Director		2009		300,000		120,000		0		0		0		0		0		420,000
Xiaoling Chen, Secretary & Director		2008		4,400		0		0		0		0		0		0		4,400
Yunbin Li, CFO		2009		120,000		50,000		0		0		0		0		0		170,000
Yunbin Li, CFO		2008		0		0		0		0		0		0		0		0

~~Domestic~~Except ~~and international stock markets often experience significant price and volume fluctuations. These fluctuations,~~ as ~~well~~stated asin ~~general economic and political conditions unrelated to our performance, may adversely affect~~ the ~~price~~table ~~of our common stock. In particular~~above, ~~following initial public offerings, the market prices for stocks of companies often reach levels that bear~~ no ~~established~~other ~~relationship~~officer ~~to the operating performance~~ of ~~these companies. These market prices are generally not sustainable and could vary widely. In~~ the ~~past,~~company ~~following~~received ~~periods~~total ofcompensation ~~volatility~~ in excess ~~the market price~~ of a$100,000. ~~public~~We ~~company’s~~do ~~securities,~~not ~~securities~~have ~~class~~any ~~action~~written ~~litigation~~employment ~~has~~or ~~often~~compensation ~~been~~agreements ~~initiated~~with our officers.

WeOn ~~will~~April 24, ~~incur~~2007, ~~increased~~our ~~costs~~Directors ~~and~~approved ~~compliance~~the ~~risks~~granting asof options to purchase a ~~result~~total of ~~becoming~~5,000,000 shares aof ~~public~~common ~~company~~stock under our 2007 Stock Option Plan (the “2007 Plan”) to directors, officers, employees and consultants of the Company. The exercise price per share was changed from $3.00 to $1.50 per share effective February 29, 2008, and to $0.50 per share effective November 26, 2008. All options under the plan have been granted. The options granted to each recipient were bifurcated, with half expiring June 30, 2009 and the other half expiring December 31, 2009. As of December 31, 2009, none of the granted options were exercised and therefore all the granted options have expired.

AsWe ado ~~public~~not ~~company,~~have weany ~~will~~employment ~~incur~~or ~~significant~~consulting ~~legal,~~agreement ~~accounting~~with ~~and~~any ~~other~~of ~~expenses associated with~~ our ~~public company reporting requirements~~officers. We ~~also~~entered ~~anticipate~~into ~~that~~an employment weagreement ~~will~~with ~~incur~~our ~~costs~~independent ~~associated~~director ~~with~~Mr. Jiansheng ~~corporate~~Xu ~~governance~~on ~~requirements~~September 22, ~~including~~2009. ~~certain requirements under~~ Under the ~~Sarbanes-Oxley~~employment ~~Act of 2002~~agreement, ~~as well as new rules implemented by the SEC and the National Association of Securities Dealers (“NASD”)~~Mr. Xu Weis ~~expect~~compensated ~~these rules and regulations~~$7,330 infor ~~particular~~being ~~Section~~a ~~404~~director ofon the ~~Sarbanes-Oxley~~board ~~Act~~for ofa ~~2002,~~term ending toat ~~significantly increase~~ our ~~legal~~next ~~and~~annual ~~financial compliance costs and to make some activities more time-consuming and costly~~meeting. ~~Like~~There ~~many~~is ~~smaller~~no ~~public~~other ~~companies,~~form ~~we face a significant impact from required compliance with Section 404~~ of ~~the~~compensation ~~Sarbanes-Oxley~~to ~~Act of 2002~~Mr. Xu ~~Section~~for ~~404~~being ~~requires~~a director ~~management~~on ~~of public companies to evaluate~~ the ~~effectiveness~~board ofexcept ~~internal control over financial reporting and~~ the ~~independent~~reimbursement ~~auditors~~by ~~to attest to~~ the effectiveness of such internal controls and the evaluation performed by management. The SEC has adopted rules implementing Section 404 for public companies as well as disclosure requirements. The Public Company Accounting Oversight Board, or PCAOB, has adopted documentation and attestation standards that the independent auditors must follow in conducting its attestation under Section 404. We are currently preparing for ~~compliance~~actual ~~with~~costs ~~Section~~incurred ~~404;~~by ~~however,~~him ~~there can be no assurance that we will effectively meet all of~~ in the ~~requirements~~performance of ~~Section~~his ~~404~~duties as currently known to us in the currently mandated timeframe. Any failure to implement effectively new or improved internal controls, or to resolve difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet reporting obligations or result in management being required to give a ~~qualified assessment of our internal controls over financial reporting or our independent auditors providing an adverse opinion regarding management’s assessment~~director. ~~Any such result could cause investors to lose confidence in our reported financial information, which could have a material adverse effect on our stock price.~~

WeITEM also expect these new rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage12. AsSECURITY aOWNERSHIP ~~result,~~OF itCERTAIN ~~may~~BENEFICIAL beOWNERS ~~more~~AND ~~difficult~~MANAGEMENT ~~for~~AND usRELATED STOCKHOLDER ~~to attract and retain qualified individuals to serve on our Board of Directors or as executive officers~~MATTERS. ~~We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.~~

~~Our~~The ~~management~~following ~~has~~tables ~~the~~set ~~ability~~forth toinformation ~~exert~~regarding ~~significant~~beneficial ~~control~~ownership inof ~~matters~~our ~~requiring~~common ~~stockholder vote~~ stock and ~~could~~our ~~delay,~~preferred ~~deter~~stock oras ~~prevent a change in control~~ of ~~our~~April 1, ~~company.~~2010

~~Our~~• ~~management~~by ~~through~~each ~~their~~person ~~ownership~~who ofis ~~our~~known ~~common stock and preferred stock (which has 100~~ to 1us ~~voting rights) will be able~~ to ~~control~~beneficially ~~the~~own ~~election~~more ofthan ~~directors~~5% ~~and other matters presented for a vote~~ of ~~stockholders.~~our Incommon ~~addition,~~stock; ~~Nevada~~• ~~corporate law provides that certain actions may be taken~~ by ~~written~~each ~~consent action~~ of ~~the~~our ~~stockholders~~officers ~~holding~~and adirectors; ~~majority~~and of• ~~the outstanding shares. In the event that the requisite approval of stockholders is obtained, dissenting or non-participating stockholders generally would be bound~~ by ~~such~~all ~~vote. Through their concentration~~ of ~~voting~~our ~~power,~~officers ~~management~~and ~~could~~directors ~~delay,~~as ~~deter or prevent~~ a group.

1722

~~change~~Unless inotherwise ~~control~~specified, the address of ~~our~~each ~~company~~of orthe ~~other~~persons ~~business~~set ~~combinations~~forth ~~that~~below ~~might~~is ~~otherwise~~in becare ~~beneficial~~of toE-4, Floor ~~our~~3, ~~other~~Haijin ~~stockholders.~~Square, InTaizi ~~deciding~~Road, ~~how~~Nanshan toDistrict, ~~vote~~Shenzhen, onChina. ~~such~~The ~~matters~~percentage ownership is based on 51,959,693 ~~management~~shares ~~may~~of becommon ~~influenced~~stock byand ~~interests~~5,000,000 ~~that~~shares ~~conflict~~of ~~with~~preferred ~~other~~stock ~~shareholders.~~outstanding ~~You~~as of ~~should~~April 1, ~~not~~2010. ~~buy~~Shares ~~our~~of common or preferred stock ~~unless~~underlying ~~you~~options or warrants exercisable within 60 days of the date hereof are ~~willing~~deemed to ~~entrust~~be ~~all~~outstanding ~~aspects~~for purposes of ~~operational~~calculating ~~control~~the beneficial toownership ~~our~~of ~~current~~securities ~~Chinese~~of ~~based~~the ~~management~~holder ~~team~~of such options or warrants.

We do not intend to pay dividends in the foreseeable future.


		(3) Amount and
		Nature of
	(2) Name	Beneficial
(1) Title of Class	of Beneficial Onwer	Ownership		(4) Percent of Class
Common Stock	Yulong Guo, President, CEO and Chairman of the Board		26,862,345		51.70	%

Preferred Stock(i)			5,000,000		100	%

Common Stock	Xiaoling Chen, Secretary and Director		5,300,000		10.20	%

Preferred Stock			0		0	%

Common Stock	Ying Yang(ii)		4,600,000		8.85	%

Common Stock	Directors and Officers as a group		32,162,345		61.90	%

Preferred Stock			5,000,000		100	%

We have not paid any dividends since inception, and we do not intend to pay any dividends in the foreseeable future. Further, we do not plan on making any cash distributions in the manner of a dividend or otherwise.


i.		Each share of preferred stock has 100 for 1 voting rights on matters subject to vote.

ii.		The address from Ying Yang is A201 Xiangjingge Garden, Biashizhou, Shenzhen, Guangdong Province, PRC.

~~RISKS~~ITEM ~~RELATING~~13. TOCERTAIN ~~THE~~RELATIONSHIPS ~~OUR~~AND ~~COMMON~~RELATED ~~STOCK~~TRANSACTIONS

~~Broker-dealers~~On ~~may~~January 23, be2003, ~~discouraged~~we ~~from~~entered ~~effecting~~into ~~transactions~~an agreement with Shenzhen Naiji Electrical Equipment Co., Ltd. (“Naiji”), a PRC corporation, whereby we acquired all the issued and outstanding stock of Naiji in ~~our~~return for 24,000,000 shares ~~because~~of ~~they~~our ~~are~~common ~~considered~~stock. ~~penny~~As ~~stocks~~a ~~and~~result, ~~are~~Naiji ~~subject~~became our wholly-owned subsidiary. As a result of entering into the agreement, the shareholders of Naiji became our shareholders in equal proportion. The agreement therefore was a non-arms length transaction. In 2006, Naiji changed its name to the ~~penny~~current ~~stock~~name ~~rules~~Asia Electrical Power Equipment (Shenzhen) Co., Ltd.

~~Rules~~Effective ~~15g-1~~December 22, ~~through~~2006, ~~15g-9~~we ~~promulgated~~issued ~~under~~5,000,000 ~~the~~shares ~~Securities Exchange Act~~ of ~~1934~~our ~~(the~~newly ~~"Securities~~created ~~Exchange~~preferred ~~Act")~~stock, ~~impose~~par value ~~sales~~$0.001, ~~practice~~to ~~and~~Yulong ~~disclosure~~Guo, ~~requirements~~our ~~on NASD broker-dealers who make a market in "penny stocks"~~President. AThe ~~penny~~preferred stock ~~generally~~has ~~includes~~100 ~~any~~for ~~non-NASDAQ~~1 ~~equity~~voting ~~security~~rights ~~that~~on matters ~~has~~subject ato ~~market~~vote. ~~price~~On ofthat ~~less~~same ~~than~~date, ~~$5.00~~we ~~per~~also ~~share.~~issued ~~Under~~2,500,000 ~~the~~and ~~penny stock regulations~~500,000 ashares ~~broker-dealer~~of ~~selling~~our common ~~penny~~ stock to ~~anyone~~Mr. Yulong ~~other~~Guo ~~than~~(our anPresident ~~established~~and ~~customer~~CEO) orand ~~"accredited~~Xiaoling ~~investor"~~Chen (~~generally~~our Secretary and Director), anrespectively. ~~individual~~The ~~with~~shares ~~net~~were ~~worth~~issued in ~~excess~~consideration of ~~$1,000,000~~the orcancellation anof ~~annual income exceeding~~ $~~200~~4,~~000~~199,540 in orthe ~~$300,000~~outstanding ~~together~~loans ~~with~~from ~~his or her spouse) must make~~ a ~~special~~company ~~suitability~~controlled ~~determination~~by ~~for~~our President (the ~~purchaser~~“Affiliate”). ~~and~~These ~~must~~loans were ~~receive~~supplemented ~~the~~by ~~purchaser's~~a ~~written~~$388,062 ~~consent~~advance to the ~~transaction~~Affiliate ~~prior~~and tothis ~~sale,~~advance ~~unless~~remained ~~the~~outstanding ~~broker-dealer~~as of orDecember 31, ~~the transaction is otherwise exempt~~2007.

InDuring ~~addition~~2008, the ~~penny~~Affiliate ~~stock~~made ~~regulations~~three ~~require~~advances ~~the broker-dealer~~ to ~~deliver,~~the ~~prior to any transaction involving a penny stock~~Company, awhich ~~disclosure~~totaled ~~schedule prepared by the SEC relating to the penny stock market~~$618,330, ~~unless~~and ~~the~~received a ~~broker-dealer~~payment orfrom the ~~transaction~~Company isof ~~otherwise exempt~~$1,438,000. AThis ~~broker-dealer~~payment ~~is also required~~ to ~~disclose commissions payable to~~ the ~~broker-dealer~~Affiliate ~~and~~exceeded the ~~registered~~balance previously ~~representative~~due ~~and~~resulting ~~current~~in ~~quotations~~a ~~for the securities. Finally~~$920,500 areceivable ~~broker-dealer~~from isthe ~~required~~Affiliate toon ~~send~~the ~~monthly~~books ~~statements~~of ~~disclosing recent price information with respect to~~ the ~~penny~~Company ~~stock held in a customer's account and information with respect to~~ at the ~~limited~~end ~~market~~of ~~in penny stocks~~2008.

~~ITEM~~During 2009, the Company made an additional advance to the Affiliate in the amount of $1,797,806 and the Affiliate committed to fully pay on behalf of the Company certain Company obligations totaling $2,718,306. ~~PROPERTIES~~This fully satisfied the account payable balance of the Affiliate.

~~Acquisition of Leasehold Rights~~23

~~There~~The isPresident noof ~~private~~the ~~land~~Company, ~~ownership~~who inis ~~PRC.~~also ~~Land~~a insignificant ~~the~~shareholder ~~PRC~~of ~~is owned by~~ the ~~government~~Company, ~~and~~owns ~~cannot~~39% beof ~~sold~~the equity tointerests ~~any~~of ~~individual~~a ormajor ~~entity~~supplier. ~~Instead,~~The ~~the~~Company ~~government~~made ~~grants~~purchases orfrom ~~allocates~~that ~~landholders~~supplier aof ~~“land use right~~$4,”614,853 during ~~which~~2009 isand ~~sometimes~~$3,865,480 ~~referred~~during ~~to informally as land ownership~~2008. ~~Land~~There ~~use~~was ~~rights~~an ~~are~~outstanding ~~granted~~balance ~~for~~due ~~specific~~to ~~purposes~~that ~~and~~supplier ~~for limited periods. Each period may be renewed~~ at December 31, ~~the~~2009 ~~expiration~~ of ~~the initial and any subsequent terms~~$1,932,488. ~~Any changes in use must be approved by the PRC Government.~~

OnITEM ~~September 7, 2004, we entered into an agreement with the PRC Government to lease approximately 3~~14.77 ~~hectares~~PRINCIPAL ofACCOUNTANT ~~land~~FEES ~~for~~AND the purpose of constructing new manufacturing facilities and office space. The lease term expires January 19, 2056. The total lease price at the time was $1,359,855. The amount has been paid in full. Our Chairman, Mr. Guo, provided us with shareholder loans for payment of these amounts. As of December 31, 2008, all amounts have been repaid to our Chairman. The amount bears no interest and is due and payable on demand. The PRC Government completed all improvements to the land, including surrounding roads, sewers, drainage, electrical and communication systems. SERVICES

~~The~~Below ~~original~~is ~~area subject to lease was 3.77 hectares, however,~~ the ~~acreage~~aggregate ~~has~~amount ~~been~~of ~~revised~~fees tobilled ~~3.06 hectares to reflect new city planning agendas~~ for ~~development~~professional ofservices ~~expanded~~rendered ~~transportation~~by ~~routes~~our principal ~~surrounding~~accountants ~~the Leased Land. We are currently in negotiations~~ with ~~the~~respect ~~PRC Government~~ to ~~request compensation for~~ the ~~decrease~~Company’s inlast ~~area.~~two fiscal years:


	2009		2008
Audit Fees	$	30,000	$	39,000
Audit-Related Fees		0		0
Tax Fees		0		—
All Other Fees		0		0
Total	$	30,000	$	39,000

~~Our~~All ~~Headquarters~~of the professional services rendered by principal accountants for the audit of the our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory ~~Manufacturing~~filings ~~Facilities~~or engagements for last two fiscal years were approved by our board of directors.

~~Our~~Pre-Approval ~~world~~Policies ~~headquarters~~ and manufacturing facilities are located at Asia Electrical Power Industrial Zone, Songgang Road, Bao'an District, Shenzhen, China, 518105. Our phone number is +86 755 28231993, and our fax number is +86 755 2823 1996. We completed the construction of our world headquarters and manufacturing facilities in September 2007. The total construction cost of the new facilities was approximately $3,800,000. There is no debt outstanding with respect to our facilities. Procedures

~~Our~~We ~~total~~do ~~facilities~~not ~~consist~~have ofan 6audit ~~separate~~committee ~~buildings located on 3.06 hectares. Building 1 consists of 7224 square meters~~ and ~~serves~~ as ~~our~~a ~~executive offices. [1 square foot equals 0.09290 square meters] Buildings 2~~result, 3our ~~and~~entire 4board ~~consist~~ of ~~8301,~~directors ~~11176~~performs ~~and~~the ~~11176~~duty of ~~square~~an ~~meters~~audit ~~respectively,~~committee. ~~and~~Prior ~~serves~~to asengaging our ~~manufacturing~~accountants ~~and~~to ~~assembly~~perform ~~facilities.~~a ~~Building~~particular 5service, ~~and~~our 6board of ~~are~~directors ~~each~~obtains ~~5192~~an ~~square~~estimate ~~meters~~for ~~and~~the ~~are~~service ~~used~~to asbe ~~a staff dormitories and recreational facilities~~performed. WeAll ~~believe that our facilities are modern, state~~ of the ~~art~~services ~~manufacturing~~described above ~~facilities.~~were Weapproved ~~believe~~by ~~that~~the ~~these~~board ~~facilities~~of ~~are~~directors ~~suitable~~in ~~for~~accordance ~~our~~with ~~administrative~~its ~~and manufacturing needs for the foreseeable future~~procedures.

WeMaintaining ~~have~~Principal anAccountant’s administrative office located at E-4, Floor 3, Haijin Square , Taizi Road, Nanshan District, Shenzhen, China 518067. The space consists of 50 square meters and the monthly rent is approximately $500. Independence

WeThe ~~also~~board ~~have~~of 20directors ~~branch~~has ~~offices~~considered ~~throughout~~whether ~~PRC~~the ~~which~~provision weof ~~lease~~the ~~from~~services ~~unaffiliated~~described ~~third~~above ~~parties.~~are compatible Wewith ~~pay~~maintaining ~~approximately~~the ~~$150~~principal ~~per~~accountant’s ~~month~~independence ~~per~~and ~~office~~believes ~~for~~that ~~rent.~~such ~~The~~services do ~~leases~~not ~~are~~compromise ~~generally~~that ~~month to month~~independence.

~~ITEM 3. LEGAL PROCEEDINGS~~24

~~None~~ITEM 15. EXHIBITS.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


Exhibit Number		Description
3.1		Certificate of Incorporation, dated August 30, 2002-Berita International Corporation ⁽¹⁾

3.2		Certificate of Incorporation, dated December 24, 2003-Keiji International Group Inc. ⁽¹⁾

3.3		Certificate of Incorporation, dated September 30, 2004-Asia Electrical Power International Group Inc. ⁽¹⁾

3.4		Articles of Incorporation, dated August 26, 2002-Berita International Corporation ⁽¹⁾

3.5		Certificate Amending Articles of Incorporation dated December 24, 2003 changing our name to “Keiji International Group Inc.” ⁽¹⁾

3.6		Certificate Amending Articles of Incorporation dated September 30, 2004 changing our name to “Asia Electrical Power International Group Inc.⁽¹⁾

3.7		Bylaws, effective September 3, 2002 ⁽¹⁾

14		Code of Ethics ⁽⁴⁾

31.1		Principal Executive Officer Section 302 Certification

31.2		Principal Financial Officer Section 302 Certification

32.1		Principal Executive Officer and Principal Financial Officer Section 1350 Certification

99.1		2007 Stock Option Plan ⁽³⁾

~~None~~1. Incorporated by reference from our Form SB-2 that was originally filed with the SEC on October 29, 2004. 2. Incorporated by reference from our Form SB -2, Amendment No. 1 that was originally filed with the SEC on February 14th , 2005. 3. Incorporated by reference from Form 8K that was originally filed with the SEC on May 30, 2007. 4. Incorporated by reference to Exhibit 14 to the Annual Report on Form 10-K of the Company that was originally filed with the SEC on April 15, 2009.

~~PART II~~25

~~ITEM~~ASIA 5.ELECTRICAL ~~MARKET~~POWER ~~FOR~~INTERNATIONAL ~~COMMON~~GROUP ~~EQUITY RELATED STOCKHOLDER MATTERS MARKET FOR COMMON EQUITY~~ INC. AND ~~ISSUER PURCHASES OF EQUITY SECURITIES.~~SUBSIDIARIES

~~Market~~CONSOLIDATED ~~Information~~FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our common stock traded on the OTCBB under the symbol “AEPW” since May 2007. Trading in the common stock in the OTCBB market has been limited and sporadic. The table below sets forth the high and low bid prices of our common stock as reported by OTCBB, and are not necessarily indicative of actual market conditions. Further, all prices reflect inter-dealer prices without retail mark-up, mark-down, or commission and may not necessarily reflect actual transactions.26

Period	High Price	Low Price
May 9, 2007 June 30, 2007	$3.00	$2.50
July 1, 2007 - September 30, 2007	$2.75	$1.30
October 1, 2007 December 31, 2007	$2.20	$1.50
January 1, 2008 – March 31, 2008	$2.35	$1.41
April 1, 2008 June 30, 2008	$2.50	$0.70
July 1, 2008 - September 30, 2008	$1.04	$0.30
October 1, 2008 – December 31, 2008	$0.40	$0.07

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

19Board of Directors Asia Electrical Power International Group Inc.

OnWe ~~December~~have ~~21,~~audited ~~2007,~~ the ~~company~~accompanying ~~approved~~consolidated abalance ~~stock~~sheets ~~split~~of ~~wherein~~Asia ~~the~~Electrical ~~number~~Power International Group Inc. as of ~~authorized~~December 31, ~~common~~2009 ~~stock~~and ~~with~~2008, aand ~~par~~the ~~value~~related ~~$0.001~~consolidated ~~was~~statements toof beincome (loss) and ~~increased~~comprehensive onincome a(loss), ~~two~~changes in stockholders’ equity, and cash flows for ~~one~~the years ~~basis~~ended December 31, 2009 and 2008. ~~The~~These ~~above~~financial ~~prices~~statements ~~have~~are ~~been~~the ~~adjusted~~responsibility ~~for~~of the Company ~~forward~~management. ~~stock~~Our ~~split~~responsibility is to express an opinion on these financial statements based on our audits.

~~Holders~~We conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and ~~Dividends~~perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its Asinternal control over financial reporting. Our audit included consideration of ~~April~~internal 1control over financial reporting as a basis for designing audit procedures that are appropriate under the circumstances, ~~2009~~but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we ~~have~~express ~~337~~no ~~beneficial~~such ~~holders~~opinion. ofAn audit ~~our~~includes ~~common~~examining, ~~stock~~on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

WeIn ~~have~~our ~~not~~opinion, ~~declared~~the orconsolidated ~~paid~~financial ~~any~~statements ~~cash~~referred ~~dividends~~to onabove ~~its~~present ~~common~~fairly, ~~stock~~in orall material ~~other~~respects, ~~securities~~the ~~and~~financial ~~does~~position ~~not~~of ~~anticipate~~Asia ~~paying~~Electrical ~~any~~Power ~~cash~~International ~~dividends~~Group ~~in the foreseeable future~~Inc. ~~Any~~as ~~future~~of December 31, ~~determination~~2009 toand ~~pay~~2008, ~~cash~~and ~~dividends will be at~~ the ~~discretion~~results of ~~the~~its ~~Board~~operations ~~of Directors~~ and ~~will~~cash beflows ~~dependent~~for ~~upon~~the ~~our~~years ~~financial condition~~ended December 31, ~~results~~2009 ~~of operations, capital requirements,~~ and ~~such~~2008 ~~other~~in ~~factors~~conformity aswith ~~the~~U.S. ~~Board~~generally ofaccepted ~~Directors~~accounting ~~deem relevant~~principles.

~~Securities~~/s/ ~~Authorized~~Robert ~~For~~G. ~~Issuance~~Jeffrey ROBERT ~~Under~~G. ~~Equity~~JEFFREY, ~~Compensation~~Certified ~~Plans.~~Public Accountants June 14, 2010 Wayne, New Jersey

~~As of December 31, 2008, our Equity Compensation Plan Information is as follows:~~F-1

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders	0	0	0
Equity compensation plans not approved by security holders	5,000,0000(1)	$0.50(1)	0(1)
Total	5,000,000	$0.50	0

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.

~~(1).~~CONSOLIDATED OnBALANCE April 24, 2007, our Directors approved the granting of options to purchase a total of 5,000,000 shares of common stock under our 2007 Stock Option Plan (the “2007 Plan”) to directors, officers, employees and consultants of the Company. As of December 31, 2008, all options under the plan have been granted and are all outstanding. The exercise price per share was changed from $3.00 to $1.50 per share effective February 29, 2008, and to $0.50 per share effective November 26, 2008. The options granted to each recipient were bifurcated, with half expiring June 30, 2009 and the other half expiring December 31, 2009.SHEETS

Recent Sales of Unregistered Securities


	Year Ended		Year Ended
	December 31, 2009		December 31, 2008
ASSETS
Current Assets:
Cash	$	3,013,027	$	3,013,900
Accounts receivables, net of allowances for doubtful accounts of $354,704 and $354,381, respectively		5,381,315		2,465,300
Other receivables		161,290		141,203
Advances to suppliers		81,340		66,351
Inventory		2,851,726		2,290,470

Total current assets		11,488,698		7,977,224

Fixed Assets:
Land use right		2,727,123		2,791,248
Buildings		4,945,096		4,932,832
Production equipment		1,456,800		985,032
Office equipment		327,387		308,445
Vehicles		364,446		355,205
Improvements		719,255		806,114

		10,540,107		10,178,876
Less accumulated depreciation		1,449,790		1,056,603

Net fixed assets		9,090,317		9,122,273


Other Assets:
Deposits		554,345		1,043,807
Advances to affiliate		—		920,500

Total other assets		554,345		1,964,307

Total Assets	$	21,133,360	$	19,063,804


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable	$	—	$	201,653
Accounts payable		5,935,828		3,727,138
Advances from customers		545,739		1,105,403
Accrued liabilities		713,579		337,803
Other liabilities		195,643		396,531
Convertible note payable		1,400,833		—

Total current liabilities		8,791,622		5,768,528
Long term debt:
Convertible note payable		—		1,545,483

Total liabilities		8,791,622		7,314,011

Stockholders’ Equity:
Common stock: authorized 150,000,000 shares of $0.001 par value; issued and outstanding 51,959,693 shares		51,960		51,960

Preferred stock: authorized 5,000,000 shares of $0.001 par value; issued and outstanding 5,000,000 shares		5,000		5,000
Paid in capital — Stock options		—		2,933,333
Capital in excess of par value		11,154,789		7,932,156
Retained earnings ( deficit)		94,546		(180,650	)
Earnings appropriated for statutory reserves		183,749		183,749
Accumulated other comprehensive income		851,694		824,245

Total Stockholders’ equity		12,341,738		11,749,793



Total Liabilities and Stockholders’ Equity	$	21,133,360	$	19,063,804

WeThe ~~had~~accompanying nonotes ~~sales~~are ofan ~~equity~~integral ~~securities~~part ~~during~~of ~~fiscal~~these ~~2008~~financial ~~not previously reported~~statements.

~~Issuer Purchases of Equity Securities.~~F-2

~~During~~ASIA ~~the~~ELECTRICAL ~~fourth~~POWER ~~quarter~~INTERNATIONAL ofGROUP ~~fiscal 2008, we did not make any purchases of our outstanding equity securities~~INC.

~~ITEM~~CONSOLIDATED 6STATEMENTS OF OPERATIONS For the Year Ended Dec. ~~SELECTED~~31, ~~CONSOLIDATED~~2009 ~~FINANCIAL~~and ~~DATA~~2008

Not Applicable.


	Year Ended Dec. 31,
	2009			2008
Revenue	$	20,848,514		$	14,118,660
Cost of Sales		16,597,830			11,714,350

Gross Profit		4,250,684			2,404,310

Expenses:
Options issued for services		—			1,025,000
Selling and Administrative Expenses		3,730,012			1,322,856

		3,730,012			2,347,856


Operating Income		520,672			56,454

Other Income (Expense):		—
Interest expense		149,410			0
Interest income		9,602			28,248
Loss on foreign exchange transactions		(58,981	)		(564	)
Other income		249,217			117,243
Other expense		(50,029	)		(71,981	)


Income before Income Taxes		521,071			129,400

Provision for Income Taxes:
Current Provision		245,875			111,723


Net Income for the Period		275,196			(17,677	)

Other Comprehensive Income - Foreign currency translation adjustments		27,449			827,565


Total Comprehensive Income	$	302,645		$	845,242

Income Per Common Share -
Basic	$	0.01		$	0.00
Diluted	$	0.00		$	0.00

Weighted average number of shares outstanding		51,959,693			51,959,693

~~ITEM~~The 7.accompanying ~~MANAGEMENT'S~~notes ~~DISCUSSION~~are ~~AND~~an ~~ANALYSIS~~integral OFpart ~~FINANCIAL~~of ~~CONDITION~~these ~~AND~~financial ~~RESULTS OF OPERATIONS~~statements.

~~Cautionary Notice Regarding Forward Looking Statements~~F-3

WeASIA ~~desire~~ELECTRICAL toPOWER ~~take~~INTERNATIONAL ~~advantage~~GROUP, ~~of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995~~INC. CONSOLIDATED ~~This~~STATEMENTS ~~filing~~OF ~~contains~~CHANGES aIN ~~number~~STOCKHOLDERS’ ~~of forward-looking statements which reflect management's current~~ EQUITY

20For the Years Ended December 31, 2008 and 2007

views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words "believe," "expect," "intend," "anticipate," "estimate," "may," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.


																			Accumulated
									Capital in		Paid in								Other
	Common Stock				Preferred Stock				Excess of		Capital-			Statutory		Retained			Comprehensive
	Shares		Amount		Shares		Amount		Par Value		Options			Reserve		Earnings			Income			Total
Balance, December 31, 2007		51,959,693	$	51,960		5,000,000	$	5,000	$	7,932,156	$	1,908,333		$	183,749	$	(198,327	)	$	(3,320	)	$	9,879,551

Net loss for period																	(17,677	)		827,565			779,917

Effect of change in option terms												1,025,000											1,025,000

Balance, December 31, 2008		51,959,693	$	51,960		5,000,000	$	5,000	$	7,932,156	$	2,933,333		$	183,749	$	(180,650	)	$	824,245		$	11,749,793

Net income for period																	275,196						275,196

Beneficial conversion										289,300													289,300

Other comprehensive income																				27,449			27,449

Transfer of value expired options										2,933,333		(2,933,333	)										—

Balance, December 31, 2009		51,959,693	$	51,960		5,000,000	$	5,000	$	11,154,789	$	—		$	183,749	$	94,546		$	851,694		$	12,341,738

~~Readers~~The ~~should~~accompanying ~~not~~notes ~~place undue reliance on these forward-looking statements, which~~ are ~~based~~an onintegral ~~management's~~part ~~current expectations and projections about future events, are not guarantees~~ of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these ~~forward-looking~~financial ~~statements~~statement. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our next Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

~~Management's Discussion and Analysis of Financial Condition and Results of Operation~~F-4

~~Fiscal~~ASIA ~~year~~ELECTRICAL ~~ended~~POWER ~~December~~INTERNATIONAL ~~31,~~GROUP ~~2008 compared with December 31, 2007~~INC.

~~The~~CONSOLIDATED ~~following~~STATEMENTS isOF anCASH ~~analysis~~FLOWS For ofthe ~~our~~year ~~revenues~~Ended ~~and~~Dec. ~~gross profit~~31, ~~details~~2009 and ~~analysis of components of expenses, and variance from December 31,~~ 2008 ~~compared to December 31, 2007.~~

Revenues.


	2009			2008
CASH FLOWS FROM OPERATIONS:
Net income (loss)	$	275,196		$	(17,677	)
Charges not requiring the outlay of cash:
Depreciation and amortization		550,193			483,342
Amortization of discount on convertible note		144,650			—
Option issued for services					1,025,000
Changes in assets and liabilities:
Increases in accounts receivable		(2,899,549	)		(720,545	)
(Increase) decrease in other receivables		(28,497	)		5,029
(Increase) decrease in advances to suppliers		(14,816	)		196,460
(Increase) decrease in inventory		(555,262	)		415,498
(Decrease) increase in notes payable		(202,045	)		306,610
Increases in accounts payable		3,196,006			119,874
(Decrease) increase in advances from customers		(562,109	)		231,100
Increase (decrease) in other liabilities		1,513,769			(1,036,722	)
Decrease in accrued liabilities		374,734			—
Increases in deposits		288,057			25,189


Net Cash Provided By Operating Activities		2,080,327			1,068,512


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets		(495,584	)		(1,504,413	)
Return of guarantee deposit		203,734			(200,183	)
Advance to affiliate		(1,796,839	)		—

Net Cash Consumed By Investing Activities		(2,088,689	)		(1,704,596	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of consultable note		—			1,548,483


Advances from affiliate		—			618,330
Repayment of advances from affiliate		—			(1,458,960	)

Net Cash Provided By Financing Activities		—			707,853


Effect of exchange rates on cash		7,489			22,058
Net change in cash		(873	)		93,827
Cash balance, beginning of period		3,013,900			2,920,073

Cash balance, end of period	$	3,013,027		$	3,013,900

	2008	% Sales	2007	% Sales
Revenues	$14,118,660	100%	$11,671,597	100%
Cost of Sales	11,714,350	83%	9,724,800	83%
Gross Profit	$2,404,310	17%	$1,946,797	17%

The accompanying notes are an integral part of these financial statements.

Our revenues for the 2008 year end period were $14,118,660, which represents an increase of $2,447,063 (or 21%) from revenues of $11,671,597 for comparable 2007 year end period. The increase in revenues reflects generally the impact of the PRC Government initiatives which promotes business expansion nationwide, which in turn increases the demand for electrical networks. The increase was also reflects our marketing efforts implemented through our regional branch offices. Cost of Sales for the 2008 period was $11,714,350, which represents an increase of $1,989,550 (or 20.4%) from $9,724,800 for the 2007 year end period. The increase in cost of sales reflects, on a percentage basis, the increase in revenues. F-5

~~Expenses.~~ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.

~~Selling~~NOTES ~~and~~TO ~~administrative~~CONSOLIDATED ~~expenses.~~FINANCIAL STATEMENTS December 31, 2009

~~Selling and administrative expenses (which includes salaries and benefits, depreciation and amortization, travel and promotion, technical support and related overhead) for the 2008 were $~~1~~,322,856, which represents an increase of $259,347 (or 24~~.~~5%)~~ ~~from~~ORGANIZATION ~~the~~and ~~prior year end period.~~ BUSINESS

~~2008~~ Organization ~~2007~~of Company

21The Company was incorporated in the State of Nevada on August 30, 2002 as Berita International Corporation, for the purpose of producing high and mid-voltage electrical switchgears in the People’s Republic of China (China). On December 24, 2003, the Company changed its name to Keiji International Group Inc. (Keiji) and on September 30, 2004 the Company changed its name to Asia Electrical Power International Group Inc. (the Company).

Travel and Promotion	$232,440	$188,526
Technical Support and warranty	39,394	33,566
Salaries and benefits	537,143	435,834
Depreciation and amortization	270,400	197,331
Other	243,479	208,252
Total Expenses	$1,322,856	$1,063,509

On January 23, 2003, the Company entered into a Share Exchange Agreement (the Agreement) to exchange 24,000,000 of its common shares for all of the equity interests of Shenzhen Naiji Electrical Equipment Co., Ltd. (Naiji), a company incorporated in China. This transaction was accounted for as a reverse merger, with Naiji treated as the acquiring company. As a result of the merger, prior financial information was restated. Subsequent to that date, the operations of the Company reflect the combined operations of the Company and Naiji. The Company had no assets or liabilities on the date of the merger, so no allocation of the purchase price was made. As a further result of the merger, the shareholders of Naiji became the shareholders of the Company.

The increase in selling and administrative expenses for the 2008 period is due principally to increases is salaries and benefits and travel and promotion. Salaries and benefits increased due to the hiring additional staff to support our increased sales levels. The staff increase also includes additional sales personnel at our branch offices. Salary benefits consist of social insurance and union fees. Travel and promotion costs increased coincident with the expansion of our sales offices. Business

~~Options~~Naiji ~~Issued~~was ~~for~~incorporated ~~Services~~in June 1997. All of its operations and sales are within China. The Company has produced high and mid-voltage electrical switchgears since its inception. Prior to the merger with Naiji, the Company had no operating history and had no assets, liabilities, or equity and had not issued any of its shares. As a result of entering into the Agreement, the shareholders of Naiji became the shareholders of the Company.

~~During~~ Risks ~~the 2007 fiscal year end period, we incurred an expense of $1,908,333 due to options issued to various employees~~ and ~~consultant. We did not have a similar expense in the 2008 year end period.~~ Uncertainties

~~Operating~~The ~~Income~~Company ~~(Loss).~~operates Weunder ~~generated~~authority ~~operating~~of ~~income~~a ~~for~~business ~~the~~license ~~2008~~which ~~year~~was ~~end~~granted ~~period~~June 20, of1997 ~~$1,081,454~~and expires ~~compared~~in ~~with~~the ayear ~~operating~~2022. ~~loss~~Renewal of ~~$1,025,045~~the ~~for~~license depends on the ~~2007~~result ~~year~~of ~~end~~government ~~period~~inspections which ~~for~~are ~~the~~made ~~reasons~~to ~~discussed~~ensure ~~above.~~environmental laws are not breeched.

~~Other~~The ~~Income~~officers of the Company control, through a combination of direct ownership and ~~Expenses~~a shareholder trust, most of the outstanding stock of the Company. As a result, insiders will be able to control the outcome of all matters requiring stockholder approval and will be able to elect all of the Company directors.

~~Other income was $117,243 for the 2008 year end period compared with $43,531 for the 2007 period~~2. ~~Interest~~SUMMARY ~~income~~OF ~~which~~SIGNIFICANT isACCOUNTING income from amounts held on deposit was $28,248 for the 2008 year end period compared with $85,024 for the 2007 year end period. Interest expense was $39,627 for the 2007 year end period. We did not have interest expense for the 2008 period due to the termination of our credit facility. Other expense for the 2007 period was $72,545 compared with $10,700 for the 2007 year end period. POLICIES

~~Foreign~~ Consolidated ~~currency translation adjustment.~~Statements

~~Foreign~~The ~~currency~~consolidated ~~translation~~financial ~~adjustment,~~statements ~~which~~include is the ~~impact~~accounts of ~~different foreign exchange rates applied in to~~ the ~~balance~~Company, ~~sheet~~ and ~~income~~its ~~statement,~~wholly owned ~~was a gain of $914~~subsidiary,~~089~~ ~~for the 2008 year end period, which contrasts with a loss of $8,651 for the comparable 2007 period~~Naiji. ~~The~~All ~~increase~~significant ~~reflects~~intercompany ~~the~~balances ~~strengthening~~and oftransactions ~~the~~have ~~Yuan~~been eliminated ~~(or~~in ~~RMB) against the US Dollar~~consolidation.

~~Total Comprehensive Income (Loss).~~ Cash

For purposes of the ~~2008~~statements ~~year~~of ~~end~~cash ~~period~~flows, wethe ~~had~~Company aconsiders ~~total~~all ~~comprehensive~~short ~~income~~term ofdebt securities ~~$1,956,766~~purchased ~~compared~~ with aan ~~total~~original ~~comprehensive~~maturity ~~loss for the 2007 period~~ of ~~$955,488.~~three ~~The~~months ~~increase~~or isless ~~due~~ to ~~the~~be ~~reasons~~cash ~~discussed above~~equivalents.

~~Income~~ Concentrations ~~(Loss)~~Of ~~Per~~Credit ~~Share.~~Risk

~~Income~~Financial ~~(Loss)~~instruments ~~Per~~which ~~Share~~potentially ~~applicable~~subject the Company to ~~common~~concentrations ~~stock~~of ~~holders~~credit ~~was~~risk consist ~~$(0~~primarily of cash.~~02)~~ ~~per~~However, ~~share~~all ~~compared~~Company ~~with~~assets aare ~~loss~~located ~~per~~in ~~share~~China, and Company cash balances are on deposit at financial institutions in China, the currency of ~~$(0~~which is not free trading.~~02)~~ ~~for~~Foreign exchange transactions are required to be conducted through institutions authorized by the ~~2007~~Chinese ~~period~~government and there is no guaranty that Chinese currency can be converted to U.S. or other currencies.

~~Current~~ Recognition ~~trends~~Of ~~in the industry~~Revenue

~~Since~~Revenue ~~2003~~is werecognized ~~have~~when ~~experienced~~product ais ~~decrease~~delivered ~~in our sales due~~ to ~~the increased supply of lower grade pirated products being produced~~customers. We ~~expect~~In ~~this~~determining ~~trend to continue and~~delivery, consideration inis ~~order~~given ~~for us~~ to ~~retain~~the ~~our~~following: ~~market~~whether ~~share~~an ~~and~~arrangement ~~increase~~exists ~~and~~with ~~surpass~~the ~~revenues~~buyer; ~~levels~~whether delivery ~~previously~~has ~~achieved,~~occurred; wewhether ~~will~~the ~~have~~price to ~~regain~~the ~~our~~buyer ~~competitive~~is ~~edge~~fixed byor ~~directing~~determinable; ~~resources into product innovation~~ and ~~refinement,~~that ~~research~~collection is ~~and~~reasonably ~~development, marketing and advertising~~assured. WeNo ~~will~~provision ~~also~~is ~~focus~~made onfor ~~maintaining~~any ~~good~~right ~~customer relations by providing what we believe to be a higher level~~ of ~~customer~~return ~~service.~~that Wemay ~~wish~~exist toas ~~attract~~the ~~new~~criteria specified ~~customers~~in bypronouncements ~~providing this level~~ of ~~service~~Financial ~~consistently~~Accounting ~~throughout~~Standards ~~the~~(SFAS) have ~~life~~been ~~of the contract~~met.

We have been able to retain our market share and expect to increase our customer base and level of sales with our existing methods of marketing, sales staff and customer service we provide. We view customer F-6

22 Fair Value Of Financial Instruments

~~service~~The ascarrying ~~the~~amounts ~~most~~of ~~important~~the ~~factor~~Company’s infinancial ~~our~~instruments, ~~marketing~~which ~~mix.~~include Ascash, ~~mentioned above "Trends in the Market"~~accounts receivable, ~~with~~other ~~new developments in rural areas~~receivables, ~~the~~advances ~~PRC will be accepting bids~~ to ~~service~~suppliers, ~~such~~accounts ~~areas~~payable, toaccrued ~~establish~~liabilities, ~~electrical~~and other ~~networks.~~liabilities, Weapproximate ~~anticipate~~their ~~such~~fair ~~new~~values ~~developments~~at ~~will~~December 31, ~~increase our sales by 25% per year for fiscal~~ 2009 ~~year end~~. ~~A majority of our sales are generated through existing customer base by referrals however with these new developments~~.

~~Liquidity and Capital Resources.~~ Inventories

AsInventories ofare ~~December~~valued ~~31,~~at ~~2008,~~the welower ~~had working capital~~ of ~~$1,586,153~~cost ~~compared~~or ~~to working capital of $1~~market,~~882,145~~ aswith ofcost ~~December~~being ~~31,~~determined ~~2007.~~on ~~The decrease is due principally to~~ the ~~increases~~ first in, ~~accounts~~first ~~payable~~out, ~~attributable to our increased production~~basis.

~~Over~~At ~~the next 12 months~~December 31, we2009 ~~will~~and ~~require approximately $8~~2008,~~800,000~~ toinventories ~~sustain~~consisted ~~our working capital needs as follows based on projected sales~~ of ~~$14,500,000~~the following:

Materials, Labor, Overhead	$ 7,800,000
		2009		2008
Selling Expenses and Administrative Expenses	1,000,000
Raw materials		$	1,266,569	$	1,070,138
Total	$ 8,800,000
Work in process			578,181		398,658
Finished goods			1,006,976		821,674
Total		$	2,851,726	$	2,290,470

~~Sources~~ Fixed ~~of Capital.~~ Assets

WeFixed ~~expect~~assets ~~our~~are ~~revenues~~recorded ~~generated~~at ~~from~~cost. ~~operations~~Depreciation tois ~~cover~~computed ~~our~~using ~~projected~~the ~~working~~straight ~~capital~~line ~~needs; however~~method, with iflives ~~additional capital is needed, we will explore financing options such as shareholder loans. Shareholder loans are without stated terms~~ of ~~repayment.~~twenty Inyears ~~the~~for ~~past~~buildings, weten ~~have~~years ~~been~~for ~~charged~~production ~~interest at the rate of 6% per annum. We have no formal agreement that ensures that we will receive such loans. In the event shareholder loans are not available~~equipment, weand ~~may~~five ~~seek~~years ~~long~~for office orfurniture ~~short~~and ~~term~~equipment ~~financing~~and for ~~local banks~~automobiles.

We had a credit facility with Shenzhen Business Bank under which we could borrow up to $2,300,000, with interest at the Basic Rate (a rate which is promulgated periodically by the China central bank - People’s Bank of China). The facility expired October 11, 2007. Taxes

~~Plans~~Naiji ~~for~~generates ~~Expansion~~its income in China where Value Added Tax, Income Tax, City Construction and Development Tax and Education Surcharge taxes are applicable. Neither the Company, nor Naiji conduct any of its operations in the U.S.; therefore, U.S. taxes are not applicable.

~~Given~~ Use ~~sufficient~~Of funding, we expect to expand our operations throughout the region by establishing up to 20 more branch offices devoted to marketing efforts. Each branch office will have approximately 3-10 full time and part time employees. To sustain new branch offices for 12 months, we will require a total of $200,000 of which $164,000 will be allocated to salaries and $36,000 allocated to rent. The need for the $200,000 for expansion is not included in the $8,800,000 we require to meet working capital needs. Estimates

WeThe dopreparation ~~not~~of ~~know~~financial ofstatements ~~any~~in ~~trends,~~conformity ~~events~~with orgenerally ~~uncertainties~~accepted ~~that~~accounting principles ~~are~~requires ~~likely~~management to ~~have~~make aestimates ~~material~~and ~~impact~~assumptions onthat ~~our~~affect ~~short-term~~certain orreported amounts ~~long-term~~and ~~liquidity~~disclosures ~~other~~of ~~than~~contingent ~~those~~assets ~~factors~~and ~~discussed~~liabilities ~~above~~at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.

~~Material~~ Common ~~Commitments~~Stock

WeCommon dostock ~~not~~of ~~have~~the ~~any~~Company ~~material~~is ~~commitments~~occasionally issued in return for ~~capital~~services. ~~expenditures~~Values ~~other~~are ~~than~~assigned to ~~what~~these ~~discussed~~issuances ~~relating~~equal to ~~construction~~the market value of ~~our~~the ~~new~~common ~~facilities~~stock at measurement date. Measurement date is defined under pronouncements of the FASB which state the criteria to be used for the valuation of stock issued for goods and services.

~~Seasonal~~ Stock ~~Aspects~~Options

~~Our~~Stock ~~business~~options ~~is seasonal in that sales~~ are ~~particularly~~valued ~~low~~at infair ~~February,~~value ~~due~~on to the ~~Chinese~~dates ~~New~~of ~~Year~~issuance ~~holiday,~~using ~~during~~a ~~which~~Black ~~time~~Scholes valuation ~~our~~model, ~~business is closed up to 2 weeks. Sales~~ in ~~March~~accordance ~~are~~with ~~usually~~the ~~higher~~pronouncements ~~than~~of ~~usual~~the ~~levels as a result~~FASB.

~~Off~~ Allowance ~~Balance~~For ~~Sheet~~Doubtful ~~Arrangements.~~Accounts

WeProvisions ~~have~~are noperiodically ~~off~~made ~~balance~~for ~~sheet~~doubtful ~~arrangements~~accounts based on evaluation of the ages of the items making up the accounts receivable balances and their creditworthiness.

~~CRITICAL~~ Other ~~ACCOUNTING~~Comprehensive ~~POLICIES, JUDGMENTS AND ESTIMATES~~Income

~~Critical~~The ~~Accounting~~Company ~~Estimates~~reports as other comprehensive income revenues, expenses, and gains and losses that are not included in the determination of net income. Resultant gains and (losses) during the years 2009 or 2008 amounted to $27,449 and $827,565, respectively.

23F-7

~~The~~ Foreign ~~preparation~~Currency of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The application of GAAP involves the exercise of varying degrees of judgment. The resulting accounting estimates will not always precisely equal the related actual results. Management considers an accounting estimate to be critical if:Translation

~~Assumptions~~All Company assets are ~~required~~located toin beChina. ~~made,~~These assets and related liabilities are recorded on the books of the Company in the currency of China (Renminbi), which is the functional currency. They are translated into US dollars as follows:

~~Changes~~(a) inAssets ~~estimates~~and ~~could~~liabilities, ~~have~~at athe ~~material~~rates ~~adverse~~of exchange in effect onat ~~our~~balance ~~financial~~sheet ~~statements.~~dates; (b) Equity accounts, at the exchange rates prevailing at the times of the transactions that established the equity accounts; and (c) Revenues and expenses, at the average rate of exchange for each year.

~~The~~Gains ~~following~~and ~~table~~losses ~~presents~~arising ~~information~~from ~~about~~this ~~our~~translation ~~most~~of ~~critical~~foreign ~~accounting~~currency ~~estimates~~are ~~and~~included ~~the effects of hypothetical changes~~ in ~~the~~other comprehensive ~~assumptions used when making such estimates:~~income.

Balance
Sheet	There is a risk of Change	How did we arrive at these	How Accurate have we been in	How Likely to change in
Account	because?	Estimates?	the past?	the future?
Accounts	We provide an Allowance	AFDA are made on accounts	These estimates of AFDA have	This method of
Receivable	For Doubtful Accounts	older than 2 years. It is	been accurate in the past as the	determining AFDA will
	(AFDA) based on the	Common in the industry for	majority of accounts older than	likely not change as we
	credit ratings of customers	Accounts less than 2 years to be 2 years belong to customers		have been able to collect
	and age of the account.	considered current. Collection	who have become bankrupt.	on the majority of
	Uncollectible accounts are	mostly occurs within 1.5 years.	Collection continues to occur	accounts within 1.5 years
	also written off,	Accounts older than 2 years are	within 1.5 years. There are	and write off uncollectible
	particularly when	reasonably likely to be	situations where bankruptcy	account which normally
	bankruptcy occurs. The	uncollectible and AFDA are	occurs on more current	occurs on accounts older
	allowance we provide is	Provided for the sum of these	accounts where the account	than 2 years. We may
	an estimate based on	Accounts.	will be written off. Current	adjust the method of
	historical information and		accounts of which become	determining AFDA on
	may not reflect current		bankrupt would not have been	potential bankrupt clients
	conditions as to whether		included in previous estimates	however to date; we do
	the account may be		of AFDA.	not foresee the need as we
	collectible.			expect to collect account
				within the normal time
				period of 1.5 years.
Inventory	We review the net	The cost of our inventory	Our selling prices have	We do not foresee to
	realizable value of our	(including manufacturing	remained stable and, as a result;	decrease our selling price
	inventory to ensure that it	Overhead) is compared to net	we have not required writing	to a level that would cause
	is recorded at a lower of	Realizable value in the market.	down of inventory. Market	net realizable value to be
	cost or market value. At	Selling prices have remained	conditions may force the	less than cost of our
	this time, any obsolete	stable despite market	selling price down amongst	inventory. We have
	inventory is written off.	conditions.	competitors; however; we will	continued to generate
	The market value could		continue to maintain our selling	sales based on these
	change due to the success		prices as we compensate the	selling prices despite
	of technical innovation on		difference in price by provided	fluctuation in market
	our part or by competitors		technical support after	conditions.
	Within the switchgear		installation and what we
	Market.		believe to be a higher lever of
			customer service.

Product Warranties

~~Fixed Assets We calculate our~~ The ~~estimated~~Company ~~lives~~provides ofproduct ~~fixed~~warranties ~~Our fixed assets are currently We do not foresee any depreciation using the assets are based on guidelines being utilized last~~ for ~~the~~approximately ~~length~~ten ~~changes.~~percent ~~straight line method based Provided by Chinese tax~~ of the ~~lives~~products ~~we are using for on useful lives of the authorities~~sold. ~~These guidelines depreciation. assets.~~ The ~~useful~~cost ~~lives~~ of ~~reflect~~servicing ~~the~~these ~~actual~~warranties ~~useful~~has ~~lives~~not ofbeen ~~the~~significant ~~asset~~and ~~could~~it ~~change~~is ~~due~~recorded ~~the~~only ~~assets~~as incurred. ~~to technical innovation~~

24 Net Income Per Share

~~and~~The orCompany ~~other~~computes ~~factors~~net ~~and~~income we(loss) per ~~may~~common ~~write~~share ~~off~~in oraccordance ~~write~~with ~~down~~pronouncements ~~obsolete~~of the ~~assets.~~FASB ~~Accrued~~and WeSEC ~~are~~Staff ~~subject~~Accounting toBulletin ~~income~~No. 98 ~~Income~~(“SAB ~~tax~~98”). ~~provision~~Under isthese ~~Our~~pronouncements, provisions ~~estimates~~of ~~currently~~SFAS ~~have~~No. 128 ~~Taxes~~and ~~payable~~SAB ~~calculations~~98, ~~Liabilities~~basic ~~taxes~~and indiluted ~~China.~~net ~~The~~income ~~calculated~~(loss) per ~~based~~common onshare ~~the~~are computed ~~been~~by individing ~~line with~~ the ~~actual~~net ~~are~~income ~~based~~available onto acommon ~~fixed~~shareholders ~~rate~~for ~~(Income~~the ~~Tax)~~period ~~determination~~by of the ~~tax~~weighted average ~~Statutory~~number ~~tax~~of ~~rate~~shares ~~and level~~ of ~~assessment~~common instock ~~our~~outstanding ~~tax~~during ~~liability~~the period. ~~which~~The wenumber doof ~~not~~weighted average ~~foresee~~shares ~~liability~~outstanding isfor ~~based~~the oncalculation ~~operating~~of ~~income.~~basic ~~Operating~~earnings ~~Income~~per ~~tax~~share ~~provisions~~will ~~are~~differ tofrom bethe number ~~changed.~~of ~~However,~~shares ~~calculations~~for ~~which~~diluted ~~are~~earnings ~~income~~per isshare ~~based~~calculation, onreflecting ~~various~~potential ~~calculated~~conversions ~~monthly.~~to common ~~our~~stock ~~estimates~~as ~~may~~long ~~change~~the ~~Further~~impact ~~based~~is onnot ~~estimates~~anti-dilutive. ~~estimates~~At weDecember 31, ~~make~~2008, ~~regarding~~there ~~from~~were ~~time~~outstanding options ~~to time~~ and ~~this~~a ~~such~~convertible ~~as,~~note ~~for~~payable. ~~example~~These ~~the~~have ~~above~~not ~~mentioned~~been ~~items~~included ~~may~~in ~~affect~~ the ~~income~~calculation ~~tax~~of earnings ~~allowances~~per share for ~~bad~~the ~~debt.~~year ~~which~~2008, ~~may~~as ~~differ~~to ~~from~~do ~~actual~~so ~~provision.~~would Wehave ~~may~~an ~~under~~anti ~~These~~dilutive ~~estimates may results~~effect. ~~This~~The ~~calculation~~options were isnot orincluded ~~over~~in ~~remit~~the ~~our~~calculation ~~change~~of ~~from~~the ~~time~~diluted toearnings ~~time~~per ~~Provided~~share ~~monthly~~for ~~and~~2009 ~~installments~~as ~~based~~the onexercise price ~~how~~exceeded ~~and~~ the ~~final~~average ~~tax~~stock ~~outcome~~price. ~~installments~~The ~~are~~potential ~~made~~conversion ~~toward~~of ~~our~~shares ~~estimates differ~~ from ~~may~~the ~~increase~~convertible note orwas ~~decrease~~included in the ~~tax~~calculation ~~liability.~~of ~~actual~~diluted ~~results.~~earnings ~~our~~per ~~income~~share ~~tax~~for ~~expense provision made~~2009.

~~Revenue~~ Advertising Recognition. Revenue is recognized when product is delivered to customers. In determining delivery, consideration is given to the following: whether an arrangement exists with the buyer; whether delivery has occurred; whether the price to the buyer is fixed or determinable; and that collection is reasonably assured. No provision is made for any right of return that may exist as the criteria specified in Statement of Financial Accounting Standards (SFAS) No. 48 have been met.Cost

~~Item~~The 7ACompany expenses advertising costs when an advertisement occurs. ~~QUANTITATIVE~~Amounts ~~AND~~expensed ~~QUALITATIVE~~were $9,034 ~~DISCLOSURES~~during ~~ABOUT~~2009 ~~MARKET~~and ~~RISK~~$16,370 during 2008.

~~Not~~ Segment ~~Applicable~~Reporting

25Management treats the operations of the Company as one segment.

~~Item~~ Research 8.and ~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.~~Development

~~The~~Research ~~Financial~~costs ~~Statements~~are expensed as incurred. Development costs are also expensed unless, in the Company’s view, they meet specific criteria related to technical, market and ~~Supplementary~~financial ~~Data~~feasibility, in ~~follow~~which ~~Part~~case ~~III~~they are deferred and amortized. Amortization is calculated on a straight-~~Item~~line 15basis over ~~below~~the expected lives of the related products. Through December 31, 2009, the Company had not incurred any research costs which would be required to be amortized. Research and development expenses in 2009 were $162,619 and in 2008 were $32,775.

~~Item 9~~3. ~~CHANGES~~STATUTORY ~~IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.~~RESERVE

~~None~~As required by the Chinese law that governs accounting, the Company allocates 10% of its previous year’s after tax profits, if any, to a Statutory Reserve Fund and 5% to a Statutory Public Welfare Fund as determined from year to year. These funds are allocated appropriately until reserves reach 50% of Paid in Capital.

~~ITEM 9A~~4. ~~CONTROLS~~ACCOUNTS ~~AND PROCEDURES.~~RECEIVABLE

~~Evaluation of Disclosure Controls and Procedures.~~ The ~~Securities~~balance ~~and~~of ~~Exchange~~accounts ~~Commission~~receivable ~~defines~~has ~~the~~been ~~term~~reduced ~~"disclosure~~by ~~controls and procedures" to mean~~ a ~~company's~~provision ~~controls~~for ~~and~~doubtful ~~other~~accounts ~~procedures that are designed to ensure that information required to be disclosed~~ in the ~~reports~~amount ~~that it files or submits under the Securities Exchange Act~~ of ~~1934 is recorded~~$354,374 ~~processed, summarized and reported, within the time periods specified~~ in ~~the~~2009 ~~Commission's rules~~ and ~~forms. Our chief executive officer and chief financial officer have concluded~~$345,381 based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, with the participation of our chief executive officer and chief financial officer, as of the end of the period covered by this report, that our disclosure controls and procedures were effective for this purpose, except as noted below under "Changes in ~~Internal Controls~~2008."

~~Management’s Report on Internal Control Over Financial Reporting~~F-8

~~The management of Asia Electrical Power International Group, Inc~~5. isLAND ~~responsible~~USE for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted principles. RIGHT

~~Because~~On ~~of its inherent limitations~~September 7, ~~internal control over financial reporting may not prevent or detect misstatements. Therefore~~2004, ~~even~~Naiji ~~those~~entered ~~systems~~into ~~determined~~an toagreement ~~be effective can only provide reasonable assurance with respect~~ to ~~financial~~lease ~~statement preparation and presentation~~3.77 ~~Also,~~hectares ~~projections~~ of ~~any~~land ~~evaluation~~from the Government of ~~effectiveness~~China tofor ~~future~~a ~~periods~~period ~~are~~of ~~subject~~50 years. toThe ~~risks~~total ~~that~~cost ~~controls may become inadequate because~~ of ~~changes~~the inlease ~~conditions~~was $2,791,248. orThis amount ~~that~~has ~~the~~been ~~degree~~fully ofpaid. ~~compliance~~The ~~with~~lease ~~the~~term ~~policies~~expires ~~and~~January 19, ~~procedures may deteriorate~~2056.

AsThe ofcost ~~December 31, 2008, management assessed the effectiveness~~ of the ~~Company’s~~land ~~internal~~use ~~control~~right ~~over~~is ~~financial~~being ~~reporting~~amortized ~~based on the criteria for effective internal control~~ over ~~financial~~its ~~reporting~~50 year ~~established~~term. inThis ~~“Internal~~amortization ~~Control-~~was capitalized ~~Integrated~~during ~~Framework,” issued by~~ the ~~Committee~~period of ~~Sponsoring~~construction ~~Organizations “(“COSO”)~~ of the ~~Treadway~~office ~~Commission. Management’s assessment including an evaluation of the design of the Company’s internal control over financial reporting~~ and ~~testing~~production ~~the~~facilities, ~~operational~~which ~~effectiveness~~were completed ofduring ~~its internal control over financial reporting~~2007.

Based on this assessment, management determined that, as of December 31, 2008, our internal controls over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U6.S. ~~generally~~RELATED ~~accepted~~PARTY ~~accounting principles.~~ TRANSACTIONS

~~This~~Capital ~~Report~~stock ~~does~~of ~~not~~3,000,000 ~~include~~common anshares ~~attestation~~and ~~report~~5,000,000 ofpreferred ~~our~~shares ~~registered~~was ~~public~~issued ~~accounting~~during ~~firm~~2006 to ~~regarding~~the ~~our~~Company ~~internal~~president ~~controls~~and ~~over~~its ~~financial~~secretary, ~~reporting.~~who ~~The~~are ~~disclosure~~also ~~contained~~substantial ~~under~~Company ~~this~~shareholders. Consideration ~~Item~~for 9Athese issuances was ~~not~~principally ~~subject~~the toelimination ~~attestation~~of by$4,199,540 ~~our~~of ~~registered~~outstanding loans ~~public~~from ~~accounting~~a ~~firm~~company ~~pursuant~~controlled toby ~~temporary~~the ~~rules~~Company ofpresident ~~the~~(Affiliate). ~~SEC~~These ~~that~~loans ~~permit~~were ussupplemented by toa ~~provide~~$388,062 ~~only~~advance to the ~~disclosure~~shareholders. ~~under~~This ~~this~~advance ~~Item~~remained 9Aoutstanding inat ~~this~~December 31, ~~Report~~2007.

~~Changes~~During in2008, ~~Internal~~the ~~Controls.~~Affiliate Asmade ofthree ~~the~~additional ~~end~~advances ofto the ~~period covered by this report~~Company, wewhich ~~carried~~totaled ~~out an evaluation~~$618,330, and ~~under~~received ~~the~~a ~~supervision~~payment ~~and~~from ~~with~~ the ~~participation~~Company of ~~our management~~$1,438,000. ~~including~~This ~~our~~payment ~~Chief~~to ~~Executive Officer and Chief Accounting Officer, of~~ the ~~effectiveness~~Affiliate ofexceeded the balance ~~design~~previously ~~and~~due, ~~operation~~resulting ~~of our disclosure and procedures (as defined~~ in ~~Exchange~~a ~~Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation~~$920,500 ~~our~~receivable ~~Chief~~from ~~Executive~~the ~~Officer~~Affiliate ~~and~~on ~~Chief~~the ~~Accounting~~books ~~Officer~~of ~~concluded~~the Company ~~that~~at ~~as of~~ the end of ~~the period covered by this Annual Report on Form 10-K our disclosure controls and procedures were effective to~~ 2008.

26During 2009, the Company made another payment to the Affiliate in the amount of $1,797,806 and the Affiliate committed to fully pay on behalf of the Company certain Company obligations totaling $2,718,306. This fully satisfied the account balance of the Affiliate.

~~enable~~The uspresident toof ~~accurately~~the ~~record~~Company, ~~process,~~who ~~summarize~~is ~~and~~also ~~report~~a ~~certain~~significant ~~information~~shareholder, ~~required~~owns to39% beof ~~included in~~ the ~~Company's~~equity interests ~~periodic~~of ~~SEC~~a ~~filings~~major ~~within~~supplier. ~~the~~The ~~required~~Company ~~time~~made ~~periods,~~purchases ~~and~~from tothat ~~accumulate~~supplier ~~and~~of ~~communicate~~$4,614,853 toduring 2009 ~~our~~and ~~management~~$3,865,480 ~~including~~during ~~the~~2008. ~~Chief~~There ~~Executive~~was ~~Officer~~an ~~and~~outstanding ~~Chief~~balance ~~Financial~~due ~~Officer,~~ to ~~allow~~that ~~timely~~supplier ~~decisions~~at ~~regarding~~December 31, ~~required~~2009 ~~disclosure~~of $1,932,488.

~~There~~7. ~~were~~STOCK no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.OPTIONS

~~Prior~~On toApril 24, 2007, the ~~issuance~~Board of ~~our~~Directors ~~financial~~approved ~~statements,~~the weadoption ~~completed~~of a stock option plan (“the ~~account~~2007 Plan”) ~~reconciliations,~~under ~~analyses~~which ~~and~~a ~~our~~total ~~management~~of ~~review~~5,000,000 ~~such~~options ~~that~~to wepurchase ~~can~~Company ~~certify~~common ~~that~~stock ~~the~~could ~~information~~be ~~contained~~granted to inofficers, ~~our~~employees ~~financial~~and ~~statements~~consultants ~~for~~of the ~~year~~Company. ~~ended~~The ~~December~~full ~~31,~~number ~~2008,~~of ~~fairly~~authorized ~~presents~~options were granted on June 13, in2007; ~~all~~these ~~material~~options ~~respects~~are fully vested. Initially, the ~~financial~~exercise ~~condition~~price was $3 per share and ~~results~~the ofoptions ~~operations~~were scheduled to expire on June 30, 2009. The “value of the ~~Company~~options, $1,908,333, was determined by a Black Scholes valuation model and charged to expense in 2007.

~~Limitations~~The onexercise ~~Effectiveness~~price ofwas ~~Controls~~changed ~~and~~to ~~Procedures~~$1.50 ~~Our~~per ~~management,~~share ~~including~~effective ~~our Chief Executive Officer and Chief Accounting Officer~~February 29, ~~does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system~~2008, ~~no matter how well conceived~~ and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to ~~their costs~~$.50 ~~Because~~per share ofeffective ~~the inherent limitations in all control systems~~November 26, ~~no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected~~2008. ~~These~~The ~~inherent~~option ~~limitations~~period ~~include,~~was ~~but~~also ~~are~~modified ~~not~~so ~~limited to, the realities~~ that ~~judgments~~50% ~~in decision-making can be faulty and that breakdowns can occur because~~ of ~~simple error or mistake. Additionally, controls can be circumvented by~~ the ~~individual~~options expire ~~acts of some persons~~June 30, by2009 ~~collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events~~ and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the ~~degree~~remaining of50% ~~compliance~~expired ~~with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system~~December 31, ~~misstatements due to error or fraud may occur and not be detected~~2009.

~~ITEM~~The 9Bchange in exercise price to $1.50 ~~OTHER~~was ~~INFORMATION~~also evaluated by a Black Scholes valuation model. Its value, $1,025,000, was charged to expense in 2008. The following table summarizes the assumptions used in this second Black Scholes valuation.

None


Dividend Yield		0.0%
Expected volatility		73%
Risk free interest rate		1.33%
Expected term (in years)		.12 yrs. To .17 yrs

~~PART~~The ~~III~~weighted average fair value of options granted was $.28.

~~ITEM~~With ~~10.~~the ~~DIRECTORS~~expiration of the Companies’ options, ~~EXECUTIVE~~initially ~~OFFICERS~~issued ~~AND~~in ~~CORPORATE~~2007 ~~GOVERNANCE~~and modified in 2008, the value has been transferred to paid in capital.

~~The following table sets forth certain information regarding our directors, executive officers and certain key employees as of the date of this report:~~ F-9

Name	Age	Position
Yulong Guo	48	CEO, President, Treasurer
		Director
Xiaoling Chen	48	Secretary, Chief
		Accounting Officer, and Director

8. RENTALS UNDER OPERATING LEASES

~~Duties~~The Company conducts its operations from its principal business office in Shenzhen China. Until September 2007, ~~Responsibilities~~office and ~~Experience~~manufacturing space was leased under an operating lease which expired in 2007. The Company also has administrative branch offices throughout the China region and this space is rented from month to month. Rental expense during 2009 and 2008 was $5,993 and $811, respectively.

~~Yulong Guo is our CEO, President, Treasurer, and Director~~9. ~~Mr.~~CONVERTIBLE ~~Guo~~NOTE was appointed as President in August 2002 and is responsible for implementing our investment projects, financial budgets and forecasts, overseeing research and development and human resources and marketing. Mr. Guo is also responsible for our overall direction and various initiatives as needed from time to time in maintaining our company. Mr. Guo is currently overseeing our marketing and public relations efforts in maintaining current customers and attracting new clientele. From our inception in 1997 to August 2002, Mr. Guo was our General Manager and PAYABLE

27The Company has issued a convertible promissory note in return for $1,545,483. The note is due December 31, 2010 and does not bear interest. The holder of the note has the option, at maturity, to convert the note to common stock at a conversion rate equal to the then market value per share of Company common stock, less 20%. The discount associated with this beneficial conversion is being amortized with the amortization charged to interest expense. The expense associated therewith was $149,650 for the year ended December 31, 2009.

~~was responsible for research and development~~10. ~~From~~INCOME March 1993 through May 1997 Mr. Guo worked with Shenzhen Tongke Real Estate Co., Ltd. as General Manager and was responsible for running day-to-day operations and the company's financial management. From November 1983 through May 1992 Mr. Guo worked with Shenzhen Far East Biscuit (China) Company as the Manager of Delivery and Storage Department responsible for logistics. The company was engaged in production and sales of the "Kangyuan" brand biscuit. Mr. Yulong Guo received his associate degree in Electrical Mechanisms in 1980 from the Military Collage of the Chinese People's Liberation Army.TAXES

~~Xiaoling~~During ~~Chen~~2006, isthe ~~our~~legal ~~Secretary,~~status ~~Chief~~of ~~Accounting~~the ~~Officer,~~Company ~~and~~within ~~Director.~~China ~~Mrs.~~was ~~Chen~~changed ~~has~~from ~~been~~a ~~our~~private ~~Administrative~~company to ~~Manager~~a ~~since~~foreign ~~2000~~investment company. ~~Her~~That ~~responsibilities~~change ~~include~~in ~~general~~status ~~and~~entitles ~~administrative~~the ~~work,~~Company ~~marketing~~to preferential income tax treatment. During the years 2006 and ~~communications~~2007, ~~and~~the ~~human~~Company ~~resources.~~was ~~Mrs.~~exempt ~~Chen~~from ~~also~~income ~~manages~~taxes; during the years ~~staff~~2008, 2009, and is2010, ~~also~~the ~~responsible~~Company ~~for~~will ~~ensuring~~have ~~that~~a ~~operations~~50% ~~are~~exemption ~~run~~from ~~efficiently~~income taxes. ~~From~~As ~~September~~a ~~1995~~condition of these exemptions, the Company was required to ~~September~~return ~~2000~~refunds ~~Mrs.~~it ~~Chen~~had ~~worked~~received for ~~Shenzhen~~the ~~Libao~~years ~~Electronic~~2004 and ~~Equipment~~2005. ~~Development~~These ~~Co.,~~totaled ~~Ltd~~$60,219. asAdditionally, the ~~General~~Company ~~Office~~had ~~Director~~previously accrued deferred tax assets of $31,997. The ~~company~~length ~~was~~of ~~engaged~~the innew ~~production,~~tax ~~assembling~~exemption ~~and~~makes ~~sales~~less ofcertain ~~closed-circuit~~the ~~monitor~~recoverability ~~equipment.~~of these ~~Her~~deferrals, ~~responsibilities~~so ~~included~~a ~~general~~valuation ~~administrative~~reserve ~~work,~~was ~~marketing~~provided ~~and~~during ~~communications~~2006 ~~and~~to ~~human~~offset ~~resources~~these deferred tax assets.

~~From~~A ~~August~~reconciliation ~~1985~~of tothe ~~August~~tax ~~1995,~~calculated ~~Mrs.~~by ~~Chen~~applying ~~worked for Shenzhen Far East Biscuit (China) Co. Ltd., as~~ the ~~General~~Chinese ~~Office~~statutory ~~Director~~tax ~~along~~rate ~~with~~to ~~Mr.~~pretax ~~Guo. Her responsibilities included general administrative work, communications-specifically~~ income with ~~government agencies, and human resources. Mrs. Chen received an associate degree in Business Administration from~~ the ~~University~~provisions offor ~~Zhongshang~~income intaxes ~~1994.~~is Inpresented ~~1995, Mrs~~below. ~~Chen held the "Political and Ideological" post, a certification of Office Administration Procedures and Communications and continues to hold this post to date.~~

Former Officers and Directors.


	2009			2008
Tax calculated using statutory rate	$	130,268		$	32,350
Less, tax exemption		(65,134	)		(16,175	)
Tax effect of non-deductible expenses		223,758			128,125

Other		(43,017	)		(32,577	)

Tax provision	$	245,875		$	111,723

~~Dudley Delapenha was a director of our company from December 21, 2007 until September 11, 2008 when he resigned in such capacity~~10. ~~From~~INCOME ~~1998~~TAXES to 2000, Mr. Delapenha was the marketing director for Avani Water Corporation, of Vancouver, British Columbia, a bottled water manufacturer company, where he was responsible for all marketing initiatives for the organization. From 2001 through 2003, Mr. Delapenha was the President of Key Elements Consulting, specializing in marketing and business plans preparation for various clients.(CONT’D)

~~Allan~~Under ~~Moore~~Statement ~~was a director~~ of ~~our~~Financial ~~company~~Accounting ~~from~~Standards ~~May 31~~No. 109, ~~2007~~recognition ~~until~~of ~~September~~deferred ~~11,~~tax ~~2008~~assets is ~~when~~permitted heunless ~~resigned~~it inis ~~such~~more ~~capacity.~~likely ~~Mr.~~than ~~Moore~~not isthat ~~currently~~ the ~~President~~asset ofwill ASnot ~~Moor~~be ~~Consulting Ltd~~realized. ~~("ASMCL")~~The ~~providing~~Company provided ~~consultation~~in ~~services~~2005 infor ~~areas~~a number of ~~environmental~~expenses ~~audits,~~on ~~developing~~the ~~environmental~~books ~~management~~which ~~systems,~~are ~~and~~different ~~sourcing~~in ~~alternative~~timing ~~fuels~~from their deductibility for ~~cement~~income ~~and lime industries~~taxes. ~~Mr.~~The ~~Moore~~principal ~~has~~item ~~been~~among ~~the~~them ~~President~~is ofa ~~ASMCL~~provision ~~since~~for ~~its~~bad ~~inception in 1999~~debts. ~~Mr.~~The ~~Moore~~tax effects ~~has received a Masters~~ of ~~Business~~these ~~Administration~~expenses ~~degree~~have ~~from~~been ~~Simon~~accrued ~~Fraser~~as ~~University~~deferred oftax ~~British~~assets. ~~Columbia,~~As ~~Canada~~described ~~in 1986~~above, a ~~Masters~~valuation reserve ofwas ~~Science~~provided ~~degree~~during ~~from~~2006 ~~the~~to ~~University~~offset ofthese ~~Wisconsin~~deferred intax ~~1958~~assets, ~~and~~as ~~a Bachelors of Science degree from the Philander Smith College of Arkansas in 1956.~~follows:

Locksley Samuels was a director of our company from May 31, 2007 and was our secretary from October 15, 2008, until September 11, 2008, when he resigned in both capacities. He is currently the President of Eurotrend Manufacturing Co., Ltd., providing services for design, manufacturing and installation of custom kitchen cabinetry. Mr. Samuels has been the President of Eurotrend since its inception in 1984. Mr. Samuels obtained his Bachelors of Applied Sciences degree in Chemical Engineering from the University of Waterloo in Ontario, Canada in 1975.


Deferred tax assets	$	31,997
Valuation reserve		31,997
Balance	$	—

There are no arrangements or understandings between any of our directors or executive officers, pursuant to which either was selected to be a director or executive officer, nor are there any family relationships among any of our directors and officers. F-10

To11. the best of our knowledge, during the past five years, none of our existing directors, executive officers, or control persons were involved in any of the following: (1) any bankruptcy petition filed by or against any property or business of which such person was a general partner or executive officer either at the time of the EXPENSES

28 Major items included in Selling & Administrative expenses were the following:

bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending, or otherwise limiting his involvement in any type of business, securities or banking activities; or (4) being found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.


	2009		2008
Travel and Promotion	$	309,220	$	248,251
Technical Support and warranty		37,901		39,394
Research and development		162,619		32,775
Salaries and benefits		717,370		509,689
Depreciation and amortization		352,913		242,684
Executive salaries and bonus		1,720,000		—
Other		429,989		250,063

Total Expenses	$	3,730,012	$	1,322,856

Mr12. ~~Moore~~SUPPLEMENTAL ~~and~~DISCLOSURES ~~Mr.~~OF ~~Samuels,~~CASH ~~both~~FLOWS ~~former directors, assisted us in performing market research in the Caribbean area. In exchange, both were granted 100,000 stock options each on April 24, 2007 for their efforts.~~INFORMATION

InThere ~~the~~was ~~past~~no ~~fiscal~~cash ~~year,~~paid ~~there~~for ~~has~~interest ~~been~~during noeither ~~material~~of ~~change~~the toyears ~~the~~presented. Cash ~~procedures~~was bypaid ~~which~~for ~~security~~income ~~holders~~taxes ~~may~~in ~~recommend~~the ~~nominees~~amounts toof ~~the~~$245,875 ~~small~~in ~~business~~2009 ~~issuer's~~and ~~board~~$111,723 ofin ~~directors~~2008.

~~Code~~During 2008, the existing options to purchase company stock were modified at a cost of ~~Ethics~~$1,025,000. During 2009, there were no non-cash investing or financing activities.

On13. ~~April~~RECENTLY 8,ADOPTED ~~2009,~~ACCOUNTING ~~we adopted a Code of Ethics which is attached hereto as Exhibit 14.~~ PRONOUNCEMENTS

29Management believes that none of the recently adopted accounting pronouncements will have a material affect on the Company financial position, results of operations, or cash flows.

~~ITEM 11~~14. ~~EXECUTIVE COMPENSATION~~CONTINGENCIES

~~The~~Consistent ~~table~~with ~~below~~business ~~summarizes~~practices ~~all~~in ~~compensation awarded to~~China, ~~earned~~the ~~by,~~Company orcarries ~~paid~~no toinsurance ~~our~~except ~~executive officers by any person~~ for ~~all services rendered in all capacities to us for the fiscal year ended December 31, 2008 and December 31, 2007~~auto insurance.

~~Summary~~15. ~~Compensation~~INTENTION ~~Table~~TO BECOME PRIVATE COMPANY

Name and principal position	Year	Salary ($)	Bonus ($)	Stock awards ($)	Option awards ($)	Nonequity incentive plan compensation ($)	Nonqualified deferred compensation earnings ($)	All other compensation ($)	Total ($)
Yulong Guo(1)	2008	5,800							5,800
	2007	5,800			381,667				387,467
Xiaoling	2008	4,400							4,400
Chen	2007	4,400			95,417				99,817

The Company filed a Schedule 13E-3 which was later amended on March 11, 2010, in accordance with SEC regulations announcing its intention to “go private” and their intent to execute a “reverse stock split” (1 for 500 shares) whereby fractional shares (less than 1 post split share) will be redeemed at a specified price of $.068 per share.

116. ~~Mr.~~SUBSEQUENT Guo is our Chairman, Chief Executive Officer and President. He received a salary of $5,800 during fiscal 2008 and 2007. On June 13, 2007, he received stock options under the 2007 Stock Option Plan initially amounting to 1,000,000 shares of our common stock. The amount however was later reduced to 300,000 shares of our common stock. The options were valued at $381,667 as of December 31, 2007.EVENTS

2.In ~~Mrs.~~May, ~~Chen~~2009, isthe ~~our~~FASB ~~Principal~~issued ~~Accounting~~a ~~Officer,~~pronouncement ~~Secretary~~which ~~and~~established ~~Director.~~general Onstandards ~~June~~of ~~13,~~accounting ~~2007,~~for and ~~she~~disclosure ~~received~~of ~~stock~~events ~~options~~that ~~under~~occur after the ~~2007~~balance ~~Stock~~sheet ~~Option~~date ~~Plan~~but before financial statements are issued or are available to ~~acquire~~be ~~250,000~~issued. ~~shares~~The Company included the requirements of ~~our~~this ~~common~~guidance ~~stock,~~in the ~~which~~preparation ~~were~~of ~~valued~~the ataccompanying ~~$95~~financial statements,~~417~~ and concluded its review on the date of issuance of these financial statements.

Except as stated in the table above, no other officer of the company received total compensation in excess of $100,000. We do not have any written employment or compensation agreements with our officers. F-11

~~We do not have any employment or consulting agreement with any of our officers or directors and we will not pay our directors any amount for acting on the Board of Directors.~~SIGNATURES

~~The~~Pursuant ~~following~~to ~~table~~the ~~reflects~~requirements ~~our~~of ~~outstanding~~Section 13 ~~equity~~and ~~awards~~15 at(d) of ~~fiscal~~the ~~year-end~~Securities ~~December~~Exchange 31Act of 1934, the ~~2008~~registrant ~~for~~has ~~our~~duly ~~executive~~caused ~~officers:~~this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Name	Option awards					Stock awards
	Number of securities underlying unexercised options (#) exercisable	Number of securities underlying unexercised options (#) unexercisable	Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)	Option exercise price ($)	Option expiration date	Number of shares or units of stock that have not vested (#)	Market value of shares of units of stock that have not vested ($)	Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)	Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
Youlong	150,00	0	0	0.50	6/30/2009
Gou	150,00	0	0	0.50	12/31/2009
Xiaoling	250,000	0	0	0.50	6/30/2009
Chen	250,000	0	0	0.50	12/31/2009

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.

ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.


Date: June 15, 2010
By:	/s/ Yulong Guo
	Yulong Guo
	President, Chief Executive Officer and Director


By:	/s/ Yunbin Li
	Yunbin Li
	Chief Financial Officer

30Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

The following tables set forth information regarding beneficial ownership of our common stock and our preferred stock as of April 1, 2009 (i) by each person who is known to us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of Asia Electrical Power Industrial Zone, Songgang Road, Bao'an District, Shenzhen. The percentage ownership is based on 51,959,693 shares of common stock and 5,000,000 shares of preferred stock outstanding at April 1, 2009, except that shares of common or preferred stock underlying options or warrants exercisable within 60 days of the date hereof are deemed to be outstanding for purposes of calculating the beneficial ownership of securities of the holder of such options or warrants.


SIGNATURE	TITLE	DATE

/s/ Yulong Guo Yulong Guo	President, Chief Executive Officer and Director	June 15, 2010

/s/ Yunbin Li Yunbin Li	Chief Accounting Officer	June 15, 2010

Name of

Shares of

Percent

Title of Class

Beneficial Owner

Stock

of Class

Common Stock

YuLong Guo(1)

24,225,100

46.4%

Preferred Stock(2)

Chairman and President

5,000,000

100%

Common Stock

Xiaoling Chen (3)

5,800,000

11.1%

Preferred Stock

Chief Accounting Officer

Common Stock

Ying Yang(4)

4,600,000

8.85%

Common Stock

Directors and Officers

as a group (2 persons) (1)(3)

30,025,100

56.9%

Preferred Stock

Directors and Officers

as a group(2 persons) (2)

5,000,000

100%

_____________________________________________________________________________________

(1). The amount includes 23,925,100 shares of common stock and stock options to acquire 300,000 shares of common stock.

(2). Each share of preferred stock has 100 for 1 voting rights on matters subject to vote.

(3). The amount includes 5,300,000 shares of common stock and stock option to acquire and additional 500,000 shares of common stock.

(4). The address from Ying Yang is A201 Xiangjingge Garden, Biashizhou, Shenzhen, Guangdong Province, PRC.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have received loans for Mr. Yulong Guo, our Chairman, from time to time. As of December 31, 2008, there are no amounts due to our Chairman.

On July 26, 2008, we issued a convertible promissory note in return for $1,545,483. The note is due December 31, 2010 and does not bear interest. The holder of the note has the option, at maturity, to convert the note to common stock at a conversion rate equal to the then market value per share of Company common stock, less 20%.

During 2008, a company controlled our Chairman made three advances to us, which totaled $618,330, and received a refund of $1,438,000. An amount of $920,500 is due from this entity.

Effective December 22, 2006, we issued 5,000,000 shares of our newly created preferred stock, par value $0.001, to Yulong Guo, our Chairman. The preferred stock has 100 for 1 voting rights on matters subject to vote. On that same date, we also issued 2,500,000 and 500,000 shares of our common stock to Mr. Youlong Gou (our Chairman and President) and Xiaoling Chen (our Principal Accounting Officer and Treasurer), respectively. The shares were issued in consideration of the cancellation of $4,199,540 in the outstanding loans from our Chairman.

On January 23, 2003, we entered into the Agreement with Shenzhen Naiji Electrical Equipment Co., Ltd. ("Naiji"), a PRC corporation, whereby we acquired all the issued and outstanding stock of Naiji in return for 24,000,000 shares of our common stock. As a result, Naiji became our wholly-owned subsidiary. As a result of entering into the Agreement; the shareholders of Naiji became our shareholders in equal proportion. The Agreement therefore was a non-arms length transaction.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Pre-Approval Policies and Procedures

Prior to engaging our accountants to perform a particular service, our board of directors obtains an estimate for the service to be performed. All of the services described above were approved by the board of directors in accordance with its procedures.

Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to the Company's last two fiscal years:

	2008	2007
Audit fees	$39,000	$24,000
Audit-related fees	0	5,000
Tax fees	-	-
All other fees	0	5,000
Total	$39,000	$34,000

All of the professional services rendered by principal accountants for the audit of the our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our board of directors.

Maintaining Principal Accountant's Independence

The board of directors has considered whether the provision of the services described below are compatible with maintaining the principal accountant's independence and believes that such services do not compromise that independence.

ITEM 15. EXHIBITS

	Exhibit Number		Description
3.1		Certificate of Incorporation, dated August 30, 2002-Berita International Corporation (1)
3.2		Certificate of Incorporation, dated December 24, 2003-Keiji International Group Inc. (1)
3.3		Certificate of Incorporation, dated September 30, 2004-Asia Electrical Power
		International Group Inc. (1)
3.4		Articles of Incorporation, dated August 26, 2002-Berita International Corporation (1)
3.5		Certificate Amending Articles of Incorporation dated December 24, 2003 changing our
		name to "Keiji International Group Inc." (1)
3.6		Certificate Amending Articles of Incorporation dated September 30, 2004 changing our
		name to "Asia Electrical Power International Group Inc." (1)
3.7		Bylaws, effective September 3, 2002 (1)
14		Code of Ethics (4)
31.1		CEO Section 302 Certification
31.2		CAO Section 302 Certification
32.1		CEO Section 906 Certification
32.2		CAO Section 906 Certification
99.1		2007 Stock Option Plan(3)

(1) Incorporated by reference from our Form SB-2 that was originally filed with the SEC on October 29, 2004.

(2) Incorporated by reference from our Form SB -2, Amendment No. 1 that was originally filed with the SEC on February 14th, 2005.

(3) Incorporated by reference from Form 8K that was originally filed with the SEC on May 30, 2007.

(4) Filed herewith.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Asia Electrical Power International Group, Inc.

We have audited the accompanying consolidated balance sheets of Asia Electrical Power International Group, Inc. as of December 31, 2008 and 2007, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in stockholders’ equity, and cash flows for the years ended December 31, 2008 and 2007. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted the audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Asia Electrical Power International Group, Inc. as of December 31, 2008 and 2007, and the results of its operations and cash flows for the years ended December 31, 2008 and 2007 in conformity with U.S. generally accepted accounting principles.

/s/Robert G. Jeffrey

ROBERT G. JEFFREY, Certified Public Accountants April 14, 2009 Wayne, New Jersey

	ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
	CONSOLIDATED BALANCE SHEETS
	December 31, 2008 and 2007
		2008	2007
ASSETS
Current Assets:
Cash		$3,013,900	$2,920,073
Accounts receivables, net of provision for doubtful
accounts		2,465,300	1,624,402
Other receivables		141,203	525,180
Advances to suppliers		66,351	249,188
Inventory		2,290,470	2,541,958
Total current assets		7,977,224	7,860,801
Fixed Assets:
Land use right		2,791,248	2,429,518
Buildings		5,439,610	3,802,277
Production equipment		1,011,153	275,382
Office equipment		595,010	269,335
Vehicles		341,855	330,796
Construction in progress		-	567,557
		10,178,876	7,674,865
Less accumulated depreciation and amortization		1,056,603	489,057
Net fixed assets		9,122,273	7,185,808
Other Assets:
Deposits		1,043,807	811,598
Advance to affiliate		920,500
Total other assets		1,964,307	811,598
Total Assets		$19063804	$15,858,207
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable		$ 201,653	$ -
Accounts payable		3,727,138	3,389,893
Advances from customers		1,105,403	921,789
Accrued liabilities		337,803	96,578
Other liabilities		396,531	1,570,396
Total current liabilities		5,768,528	5,978,656
Convertible Note Payable		1,545,483	-
Stockholders’ Equity:
Common stock: authorized 150,000,000 shares of $0.001
par value; issued and outstanding 51,959,693 shares		51,960	51,960
Preferred stock: authorized 5,000,000 shares of $0.001 par
value; issued and outstanding 5,000,000 shares		5,000	5,000
Capital in excess of par value		7,932,156	7,932,156
Paid in capital - options		2,933,333	1,908,333
Retained deficit		(180,650)	(198,327)
Earnings appropriated for statutory reserves		183,749	183,749
Accumulated other comprehensive income (loss)		824,245	(3,320)
Total stockholders’ equity		11,749,793	9,879,551
Total Liabilities and Stockholders’ Equity		$19,063,804	$15,858,207

The accompanying notes are an integral part of these financial statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) For the Years Ended December 31, 2008 and 2007

	2008	2007
Revenue	$14,118,660	$11,671,597
Cost of sales	11,714,350	9,724,800
Gross Profit	2,404,310	1,946,797
Expenses:
Selling and administrative expenses	1,322,856	1,063,509
Options issued for services	1,025,000	1,908,333
Total operating expenses	(2,347,856)	2,971,842
Operating income (loss)	56,454	(1,025,045)
Other Income and Expense:
Other income	117,243	43,531
Interest income	28,248	85,024
Interest and financial expense	-	(39,627)
Other expense	(72,545)	(10,720)
Income (Loss) Before Income Taxes	129,400	(946,837)
Provision for Income Taxes	111,723	-
Net income (loss)	17,677	(946,837)
Other comprehensive income (loss) – foreign currency
translation adjustments	827,565	(8,651)
Total comprehensive income (loss)	$ 845,242	$ (955,488)
Income (Loss) Per Common Share -
Basic and Diluted	$ (.02)	$ (.02)
Weighted average
Number of common shares outstanding	51,959,693	51,559,821
The accompanying notes are an integral part of these financial statements.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For the Years Ended December 31, 2008 and 2007
									Accumulated
					Capital in	Paid in			Other
	Common Stock		Preferred Stock		Excess of	Capital –	Statutory	Retained	Comprehensive
	Shares	Amount	Shares	Amount	Par Value	Options	Reserve	Earnings	Income	Total
Balance, December 31, 2006	51,000,000	$51,000	5,000,000	$5,000	$5,315,773	$ -	$183,749	$ 748,510	$5,331	$6,309,363
Issuance of common shares	959,693	960			2,616,383					2,617,343
Options issued for services						1,908,333				1,908,333
Net loss for period								(946,837)	(8,651)	(955,488)
Balance, December 31, 2007	51,959,693	51,960	5,000,000	5,000	7,932,156	1,908,333	183,749	(198,327)	(3,320)	9,879,551
Net income for period								17,677	827,565	845,242
Effect of change in option terms						1,025,000				1,025,000
Balance, December 31, 2008	51,959,693	$51,960	5,000,000	$5,000	$7,932,156	$2,933,333	$183,749	$(180,650)	$824,245	$11,749,793

The accompanying notes are an integral part of these financial statements

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2008 and 2007
	2008	2007
CASH FLOWS FROM OPERATIONS:
Net income (loss)	$17,677	$(946,837)
Charges (credits) not involving the receipt or outlay of cash:
Depreciation and amortization	483,342	84,540
Options issued for services	1,025,000	1,908,333
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(720,545)	254,051
Decrease (increase) in other receivables	5,029	(95,501)
Decrease (increase) in advances to suppliers	196,460	(25,762)
Decrease (increase) in inventory	415,498	(715,277)
Increase in accounts payable	306,610	1,393,769
Increase in advances from customers	119,874	215,785
Increase (decrease) in accrued liabilities	231,100	(59,133)
Increase (decrease) in other payables	(1,036,722)	1,419 ,200
Net Cash Provided By
Operating Activities	1,043,323	3,433,168
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets	(1,504,413)	-
Increase in guarantee deposits	(200,183)	-
Decrease (Increase) in other deposits	25,189	(664,628)
Expenditures for construction in progress	-	(2,881,090)
Return of funds set aside in collateral account	-	255,955
Net Cash Consumed By
Investing Activities	(1,679,407)	(3,289,763)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of consultable note	1,548,483	-
Advances from affiliate	618,330	-
Repayment of advances from affiliate	(1,458,960)
Issuances of common stock	-	2,617,343
Repayment of borrowings under bank credit facility	-	(827,600)
Net Cash Provided By
Financing Activities	707,853	1,789,743
Effect of exchange rate changes on cash	22,058	(8,651)
Net change in cash	93,827	1,924,497
Cash balance, beginning of period	2,920,073	995,576
Cash balance, end of period	$3,013,900	$2,920,073
The accompanying notes are an integral part of these financial statements

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

1. ORGANIZATION and BUSINESS

Organization of Company

The Company was incorporated in the State of Nevada on August 30, 2002 as Berita International Corporation, for the purpose of producing high and mid-voltage electrical switchgears in the People's Republic of China (China). On December 24, 2003, the Company changed its name to Keiji International Group Inc. (Keiji) and on September 30, 2004 the Company changed its name to Asia Electrical Power International Group Inc. (the Company).

Business

Naiji was incorporated in June 1997. All of its operations and sales are within China. The Company has produced high and mid-voltage electrical switchgears since its inception. Prior to the merger with Naiji, the Company had no operating history and had no assets, liabilities, or equity and had not issued any of its shares. As a result of entering into the Agreement, the shareholders of Naiji became the shareholders of the Company.

Risks and Uncertainties

The Company operates under authority of a business license which was granted June 20, 1997 and expires in the year 2022. Renewal of the license depends on the result of government inspections which are made to ensure environmental laws are not breeched.

The officers of the Company control, through a combination of direct ownership and a shareholder trust, most of the outstanding stock of the Company. As a result, insiders will be able to control the outcome of all matters requiring stockholder approval and will be able to elect all of the Company directors.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidated Statements

The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiary, Naiji. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash

For purposes of the statements of cash flows, the Company considers all short term debt securities purchased with an original maturity of three months or less to be cash equivalents.

Concentrations Of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash. However, all Company assets are located in China, and Company cash balances are on deposit at financial institutions in China, the currency of which is not free trading. Foreign exchange transactions are required to be conducted through institutions authorized by the Chinese government and there is no guaranty that Chinese currency can be converted to U.S. or other currencies.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TOCONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Recognition Of Revenue

Revenue is recognized when product is delivered to customers. In determining delivery, consideration is given to the following: whether an arrangement exists with the buyer; whether delivery has occurred; whether the price to the buyer is fixed or determinable; and that collection is reasonably assured. No provision is made for any right of return that may exist as the criteria specified in Statement of Financial Accounting Standards (SFAS) No. 48 have been met.

Fair Value Of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, other receivables, advances to suppliers, accounts payable, accrued liabilities, and other liabilities, approximate their fair values at December 31, 2008.

Inventories

Inventories are valued at the lower of cost or market, with cost being determined on the first in, first out, basis.

At December 31, 2008 and 2007, inventories consisted of the following:

	2008	2007
Raw materials	$1,070,138	$1,419,201
Work in process	398,658	622,462
Finished goods	821,674	500,295
Total	$2,290,470	$2,541,958

Fixed Assets

Fixed assets are recorded at cost. Depreciation is computed using the straight line method, with lives of twenty years for buildings, ten years for production equipment, and five years for office furniture and equipment and for automobiles.

Taxes

Naiji generates its income in China where Value Added Tax, Income Tax, City Construction and Development Tax and Education Surcharge taxes are applicable. Neither the Company, nor Naiji conduct any of its operations in the U.S.; therefore, U.S. taxes are not applicable.

Use Of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimated.

Common Stock

Common stock of the Company is occasionally issued in return for services. Values are assigned to these issuances equal to the market value of the common stock at measurement date. Measurement date is defined under EITF 96-18 which states the criteria to be used for the valuation of stock issued for goods and services.

Stock Options

Stock options are valued at fair value on the dates of issuance using a Black Scholes valuation model, in accordance with the provisions of SFAS No. 123R.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Allowance For Doubtful Accounts

Provisions are periodically made for doubtful accounts based on evaluation of the ages of the items making up the accounts receivable balances and their creditworthiness.

Other Comprehensive Income

The Company reports as other comprehensive income revenues, expenses, and gains and losses that are not included in the determination of net income. Resultant gains and (losses) during the years 2008 or 2007 amounted to $914,089 and $(8,651), respectively.

Foreign Currency Translation

All Company assets are located in China. These assets and related liabilities are recorded on the books of the Company in the currency of China (Renminbi), which is the functional currency. They are translated into US dollars as follows:

(a) Assets and liabilities, at the rate of exchange in effect as at the balance sheet date; (b) Equity accounts, at the exchange rates prevailing at the times of the transactions that established the equity accounts; and (c) Revenues and expenses, at the average rate of exchange for the year.

Gains and losses arising from this translation of foreign currency are included in other comprehensive income.

Product Warranties

The Company provides product warranties for approximately ten percent of the products sold. The cost of servicing these warranties has not been significant and it is recorded only as incurred.

Net Income Per Share

The Company computes net income (loss) per common share in accordance with SFAS No. 128, “Earnings Per Share” and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of SFAS No. 128 and SAB 98, basic and diluted net income (loss) per common share are computed by dividing the net income available to common shareholders for the period by the weighted average number of shares of common stock outstanding during the period. The number of weighted average shares outstanding as well as the amount of net income per share are the same for basic and diluted per share calculations for all periods reflected in the accompanying financial statements. At December 31, 2008, there were outstanding options, options to purchase common stock, and a convertible note payable. These have not been included in the calculation of earnings per share for the years 2007 or 2008, as to do so would have an anti dilutive effect.

Advertising Cost

The Company expenses advertising costs when an advertisement occurs. Amounts expensed were $16,370 during 2008 and $14,801 during 2007.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Segment Reporting

Management treats the operations of the Company as one segment.

Research and Development

Research costs are expensed as incurred. Development costs are also expensed unless, in the Company's view, they meet specific criteria related to technical, market and financial feasibility, in which case they are deferred and amortized. Amortization is calculated on a straight-line basis over the expected lives of the related products. Through December 31, 2008, the Company had not incurred any research costs which would be required to be amortized. Research and development expenses in 2008 were $32,775 and in 2007 were $27,000. 3. STATUTORY RESERVE

As required by the Chinese law that governs accounting, the Company allocates 10% of its previous year's after tax profits, if any, to a Statutory Reserve Fund and 5% to a Statutory Public Welfare Fund as determined from year to year. These funds are allocated appropriately until reserves reach 50% of Paid in Capital.

4. ACCOUNTS RECEIVABLE

The balance of accounts receivable has been reduced by a provision for doubtful accounts in the amount of $345,381 in 2008 and $322,533 in 2007.

5. LAND USE RIGHT

On September 7, 2004, Naiji entered into an agreement to lease 3.77 hectares of land from the Government of China for a period of 50 years. The total cost of the lease was $2,791,248. This amount has been fully paid. The lease term expires January 19, 2056.

The cost of the land use right is being amortized over its 50 year term; this amortization was capitalized during the period of construction of the office and production facilities, which were completed during 2007.

6. CONSTRUCTION IN PROGRESS

Construction began during 2006 of new office and manufacturing facilities on land which is leased (Note 5). The work was completed in September 2007, at a total cost of $3,800,000. There are no other projects under construction.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

7. RELATED PARTY TRANSACTIONS

Capital stock of 3,000,000 common shares and 5,000,000 preferred shares was issued during 2006 to the Company president and its secretary, who are also substantial Company shareholders. Consideration for these issuances was principally the elimination of $4,199,540 in the outstanding loans from our president. These shareholders had made loans to Naiji, though a company controlled by the Company president (Affiliate), which at December 26, 2006 totaled $4,199,540. These loans were supplemented by a $388,062 advance to the shareholders; this advance remained outstanding at December 31, 2007.

During 2008, the Affiliate made three advances to the Company, which totaled $618,330, and received a payment from the Company of $1,438,000. This payment to the Affiliate exceeded the balance previously due resulting in a $920,500 receivable from the Affiliate on the books of the Company.

The president of the Company, who is also a significant shareholder, owns 39% of the equity interests of a major supplier. The Company made purchases from that supplier of $3,865,480 during 2008 and $3,046,000 during 2007. There was an outstanding balance due to that supplier at December 31, 2008 of $1,257,110.

8. STOCK OPTIONS

On April 24, 2007, the Board of Directors approved the adoption of a stock option plan (“the 2007 Plan”) under which a total of 5,000,000 options to purchase Company common stock could be granted to officers, employees and consultants of the Company. The full number of authorized options were granted on June 13, 2007; these options are fully vested. Initially, the exercise price was $3 per share and the options were scheduled to expire on June 30, 2009. The “value of the options, $1,908,333, was determined by a Black Scholes valuation model and charged to expense in 2007.

The following table summarized the assumptions used in the Black Scholes valuation:

Dividend yield	0.0%
Expected volatility	75%
Risk free interest rate	4.84%
Expected term (in years)	.85 yr to 1.58 yrs

The weighted average fair value of options granted was $.38.

The exercise price was changed to $1.50 per share effective February 29, 2008, and to $.50 per share effective November 26, 2008. The option period was also modified so that 50% of the options expire June 30, 2009 and the remaining 50% expire December 31, 2009.

The change in exercise price to $1.50 was also evaluated by a Black Scholes valuation model. Its value, $1,025,000, was charged to expense in 2008. The following table summarizes the assumptions used in this second Black Scholes valuation.

Dividend Yield	0.0%
Expected volatility	73%
Risk free interest rate	1.33%
Expected term (in years)	.12 yre. To .17 yrs

The weighted average fair value of options granted was $.28.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

9. RENTALS UNDER OPERATING LEASES

The Company conducts its operations from its principal business office in Shenzhen China. Until September 2007, office and manufacturing space was leased under an operating lease which expired in 2007. The Company also has administrative branch offices throughout the China region and this space is rented from month to month. Rental expense during 2008 and 2007 was $811 and $18,061, respectively.

10. NOTES PAYABLE

The Company had a credit facility with Shenzhen Business Bank under which it could borrow up to $2,300,000, with interest at the Basic Rate (a rate which is promulgated periodically by the China central bank – People’s Bank of China). The facility expired during 2007 and was not renewed. There was no balance outstanding on this facility at either December 31, 2008 or 2007.

During 2008, the Company issued notes totaling $201,653 to five suppliers in lieu of paying amounts due for purchases. To secure these notes, the Company deposited $200,183 in a bank warranty account. The notes were paid in January 2009, and the deposit was returned to the Company.

11. CONVERTIBLE NOTE PAYABLE

On June 2, 2008, the Company issued a convertible promissory note in return for $1,545,483. The note is due December 31, 2010 and does not bear interest. The holder of the note has the option, at maturity, to convert the note to common stock at a conversion rate equal to the then market value per share of Company common stock, less 20%.

12. INCOME TAXES

During 2006, the legal status of the Company within China was changed from a private company to a foreign investment company. That change in status entitles the Company to preferential income tax treatment. During the years 2006 and 2007, the Company was exempt from income taxes; during the years 2008, 2009, and 2010, the Company will have a 50% exemption from income taxes. As a condition of these exemptions, the Company was required to return refunds it had received for the years 2004 and 2005. These totaled $60,219. Additionally, the Company had previously accrued deferred tax assets of $31,997. The length of the new tax exemption makes less certain the recoverability of these deferrals, so a valuation reserve was provided during 2006 to offset these deferred tax assets.

A reconciliation of the tax calculated by applying the Chinese statutory tax rate to pretax income with the provisions for income taxes is presented below.

	2008	2007
Tax calculated using statutory rate	$223,446	$173,069
Less, tax exemption	111,723	173,069
Tax provision	$111,723	$-0-

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2008

12. INCOME TAXES (CONT’D)

Under Statement of Financial Accounting Standards No. 109, recognition of deferred tax assets is permitted unless it is more likely than not that the asset will not be realized. The Company provided in 2005 for a number of expenses on the books which are different in timing from their deductibility for income taxes. The principal item among them is a provision for bad debts. The tax effects of these expenses have been accrued as deferred tax assets. As described above, a valuation reserve was provided during 2006 to offset these deferred tax assets, as follows:

Deferred tax assets	$31,997
Valuation reserve	31,997
Balance	$ -

13. EXPENSES

Major items included in Selling & Administrative expenses were the following:

	2008	2007
Travel and Promotion	$ 232,440	$ 188,526
Technical Support and warranty	39,394	33,566
Salaries and benefits	537,143	435,834
Depreciation and amortization	270,400	197,331
Other	243,479	208,252
Total Expenses	$1,322,856	$1,063,509

14. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

There was no cash paid for interest during either of the years presented.

Cash was paid for income taxes in the amounts of $111,723 in 2008 and $ 58,222 in 2007.

Pursuant to a Company stock option plan, options to purchase 5,000,000 shares of common stock were issued for services during 2007. These were valued at $1,908,333 and were charged to expense.

The provisions for amortization of the land use rights were capitalized as part of construction in progress. This amounted to $83,128 in 2007.

Common shares were issued during 2007 as a finders fee in connection with the issuance of 872,447 shares. These amounted to 87,246 shares, valued at $262,000.

15. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Management believes that none of the recently adopted accounting pronouncements will have a material affect on the Company financial position, results of operations, or cash flows.

16. CONTINGENCIES

Consistent with business practices in China, the Company carries no insurance except for auto insurance.

SIGNATURES

Pursuant to the requirements of Section 13 and 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASIA ELECTRICAL POWER INTERNATIONAL GROUP INC.

Date: April 15, 2009

By: /s/ Yulong Guo Yulong Guo President, Chief Executive Officer and Director

Xiaoling Chen

/s/ Xiaoling Chen Secretary, Chief Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Yulong Guo	President, Chief Executive Officer	April 15, 2009
Yulong Guo	and Director
/s/ Xiaoling Chen	Secretary, Chief Accounting Officer	April 15, 2009
Xiaoling Chen	Director

Position

Yulong Guo

President, Chief Executive Officer and Director

Xiaoling Chen

Secretary and Director

Chief Financial Officer

Jiansheng Xu

Filing Compare · Asia Electrical Power International Group Inc.