4. Investments in Foreign Joint Ventures

We have interests in two joint ventures, outside of the United States of America (“U.S.”) which are accounted for using the equity method:

BOMAY Electric Industries Company, Ltd. (“BOMAY”), in which the Company holds a 40% interest, Baoji Oilfield Machinery Co., Ltd. (a subsidiary of China National Petroleum Corporation) holds a 51% interest, and AA Energies, Inc., holds a 9% interest. BOMAY was formed in 2006 in China with a term of 12 years. The term of the joint venture may be extended upon agreement of all parties. In such case, the joint venture shall apply for the extension to the relevant Chinese authority six months before expiry of the venture; and,

M&I Electric Far East, Ltd. ("MIEFE”), in which the Company holds a 41% interest, MIEFE’s general manager holds an 8% interest and, Sonepar of France holds a 51% interest. In 2016, due to market conditions, the business suspended current operations and the investment in MIEFE was written down to zero excluding foreign currency translation.

Sales to joint ventures totaled $0.00 million and $0.04 million for the three months ended March 31, 2017 and 2016.

Summary (unaudited) financial information of our foreign joint ventures in U.S. dollars was as follows at March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and 2016 (in thousands):

	BOMAY				MIEFE
	2017		2016		2017			2016
Assets:
Total current assets	$	50,437	$	47,700	$	441		$	425
Total non-current assets		3,551		3,589		18			17
Total assets	$	53,988	$	51,289	$	459		$	442
Liabilities and equity:
Total liabilities	$	26,802	$	24,196	$	571		$	551
Total joint ventures’ equity		27,186		27,093		(112	)		(109	)
Total liabilities and equity	$	53,988	$	51,289	$	459		$	442

	Three Months Ended March 31,
	BOMAY				MIEFE
	2017		2016		2017		2016

Revenue	$	4,221	$	6,987	$	-	$	662
Gross Profit	$	1,335	$	1,144	$	-	$	171
Earnings	$	130	$	231	$	-	$	(669	)

The following is a summary of activity in investments in foreign joint ventures for the nine months ended September 30, 2016 (unaudited):

	March 31, 2017
	BOMAY**		MIEFE			TOTAL
	(in thousands)
Investments in foreign joint ventures:
Balance at December 31, 2016	$	10,450	$	213		$	10,663
Equity in earnings (loss) in 2017		52		-		$	52
Dividend distributions in 2017		-		-		$	-
Foreign currency translation adjustment		15		-		$	15
Investments, end of period	$	10,517	$	213		$	10,730

Components of investments in foreign joint ventures:
Investment in joint ventures	$	2,033	$	14		$	2,047
Undistributed earnings		8,365		(14	)	$	8,351
Foreign currency translation		119		213		$	332
Investments, end of period	$	10,517	$	213		$	10,730

Accumulated statutory reserves of $2.89 million in equity method investments at March 31, 2017 and December 31, 2016, respectively, are included in AETI’s consolidated retained earnings. In accordance with the People’s Republic of China, (“PRC”), regulations on enterprises with foreign ownership, an enterprise established in the PRC with foreign ownership is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

Under the equity method of accounting, the Company’s share of the joint ventures’ operations’ earnings or loss is recognized in the condensed consolidated statement of operations as equity income (loss) from foreign joint ventures’ operations. Joint venture income increases the carrying value of the joint venture investment and joint venture losses, as well as dividends received from the joint ventures, reduce the carrying value of the investment.

The Company reviews its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable or the inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment.