China Power Equipment, Inc (CPQQ)

[morokoy]

That 7,500,000 you mentioned relates to the shareholding of a company they have a 20% investment in, "Yan An".

China Power Equipment, Inc.
Notes to Consolidated Financial Statements (Continued)
Unaudited

NOTE 5 – INVESTMENT


Investment consists of:

September 30, December 31,
2009 2008
20% equity interest $ 253,334 $ 236,384

In May 2005, Zhongxi made a long-term investment in Shaanxi Yan An Amorphous Alloy Transformer Co., Ltd (“Yan An”) to purchase 20% of equity interest for approximately $159,413 (RMB1,090,000). The equity method has been used for this investment for the nine months ended September 30, 2009 and 2008, respectively. Zhongxi purchased the shares of Shaanxi Yan An Amorphous Alloy Transformer Co., Ltd from Xi'an Amorphous Alloy Science And Technology Co., Ltd. (Alloy Science). The balances for the investment including earnings from the investment as of September 30, 2009 and December 31, 2008 were $253,334 and $236,384, respectively. An evaluation had been performed by the company as of December 31, 2008 to ensure that the 20% of the net assets value of Shaanxi Yan An Amorphous Alloy Transformer Co., Ltd was above its investment amount.

The following is the shareholder’s list of Yan An Amorphous Alloy Transformer Co., Ltd as of September 30, 2009:


Yan An Amorphous Alloy Transformer Co., Ltd Shareholders’ List
Shareholders’ Name # of shares %
1 Mr. Chang Ming 4,500,000 60.0 %
2 Zhongxi 1,500,000 20.0 %
3 Mr. Yang Shuchen 500,000 6.7 %
4 Mr. Zhao Chongxiao 500,000 6.7 %
5 Mr. Wang Xinyu 500,000 6.6 %
Total 7,500,000 100 %