Northwest Investment Group Regulatory News (NWIG)

29 June 2016

NORTHWEST INVESTMENT GROUP LIMITED

("NWIG" or the "Company")

FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2015

On 9 June 2010, Northwest Investment Group Ltd. ("NWIG" or "the Company") raised 3 million pounds from investors and was admitted to trading on the AIM market of the London Stock Exchange. Since then we have been engaging ourselves in identifying high-value investment targets in the hydropower market in Western China in accordance with the investing policy of the Company.

Since admission to AIM, we have dedicated ourselves to make a sizeable acquisition and have engaged with numerous people and organizations in order to acquire or invest in hydropower projects. During the first half of 2015, we closely examined more than three projects for possible investment and as part of this, in early 2015, we started a due diligence exercise on one particular energy project. However negotiations over this project were suspended due to communication issues encountered in the preparation of documentation. At the same time, there was a strong performance in the Chinese stock market in the first half of 2015, which weakened the motivation of two hydropower companies which had been exploring the possibility of raising money on the London Stock Exchange through a combination with the Company. Despite these continued setbacks, the board continues its endeavours to select and search for high-quality assets to be injected into NWIG.

We will update shareholders as and when progress with a target is publishable. Since the Company has not substantially implemented its investing policy within 18 months of Admission then, in accordance with the AIM Rules, the Company's investing policy is subject to the approval of shareholders at the annual general meeting.

In the second half of 2015, we broadened our search to look at other clean energy projects. following the "One Belt One Road" ("OBOR") policy put forward by President Xi of P. R. China, recently broadened to other clean energy projects. However, we have not as yet concluded a transaction given the current financial environment. We will update shareholders as and when appropriate. Since the Company has not substantially implemented its investing policy, it is again being put within 18 months of Admission then, in accordance with the AIM Rules, the Company's investing policy is subject to the approval of shareholders at this year's annual general meeting. The Company's current investing policy is set out in full immediately following this statement and is included, with a number of minor amendments, in the circular containing the Notice of Annual General Meeting accompanying the accounts.

In 2015, the clean energy market in China was boosted following the execution of "One Belt One Road" ("OBOR") put forward by President Xi of P. R. China. That should be a great stimulus to the clean energy industry in Northwest China. In 2015, we dedicated ourselves to finding high-quality clean energy assets and we believe we can complete the acquisition in the near future.

As the business develops, we will continue to attract talented and qualified personnel, to assist us to meet our strategic objectives. I would once again like to extend my sincere thanks to my staff and board for their zeal, vision and support and to Mr Ka Ming Wong for his valuable support from flotation until his departure in January of this year. We continue to search for a replacement Non-Executive Director.

………………………………

Kaifeng Li

Chairman

29 June 2016

Copies of the Annual Report and Notice of AGM are being posted to shareholders today and will shortly be made available on the Company's website at http://www.northwestinv.com/ 

Contact details:

STATEMENT OF COMPREHENSIVE INCOME

The notes on pages 13 to 19 form part of these financial statements.

All amounts are derived from continuing operations. There was no other comprehensive income in the year.

STATEMENT OF FINANCIAL POSITION

The notes on pages 13 to 19 form part of these financial statements.

The financial statements were approved by the Board of Directors and authorised for issue on 29 June 2016.

Zheng Kang

Chief Executive Officer

STATEMENT OF CHANGES IN EQUITY

STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Northwest Investment Group Limited is a Company incorporated on 26 August 2008 in British Virgin Islands under The BVI Business Companies Act 2004. The Company has been established for the purpose of identifying and acquiring, or investing in, energy projects with an initial focus on Western China. The address of the registered office is Sea Meadow House, Blackburn Highway, P.O. Box 116, Road Town, Tortola, British Virgin Islands. The Company's business review is set out in the Chairman's Statement and Directors' Report.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (''IFRS'') issued by the International Accounting Standard Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC), as adopted by European Union.

The financial statements are prepared on the historical cost basis and presented in round thousands ('000).

The Company has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2015 from the beginning of the reporting period.

As at end of the reporting period, the Company has not adopted the following standard as it is either not effective or not applicable to the Company's business.

Standards, amendments and interpretations (not yet endorsed by EU at 31 December 2015)

- IFRS 16 Lease (January 2016)

- Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses (January 2016)

- Amendments to IAS 7: Disclosure Initiative (January 2016)

- Clarifications to IFRS 15 Revenue from Contracts with Customers (April 2016)

- Amendments to IAS 27: Equity Method in Separate Financial Statements (August 2014) - EU effective date 1 January 2016

- Amendments to IAS 1: Disclosure Initiative (December 2014) - EU effective date 1 January 2016

- Annual Improvements to IFRSs 2012-2014 Cycle (September 2014) - EU effective date 1 January 2016

- Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation (May 2014) - EU effective date 1 January 2016

- Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations (May 2014) - EU effective date 1 January 2016

There are no other standards, amendments and interpretations in issue but not yet adopted that the directors anticipate will have material effect on the reported income or net assets of the Company.

2.2 Going concern

The financial statements of the Company are prepared on a going concern basis. The Directors are of the opinion that the Company has sufficient cash to fund its activities in excess of twelve months from the date of these financial statements' approval.

NOTES TO THE FINANCIAL STATEMENTS

2.3 Foreign currencies

Functional and presentational currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in pound sterling (''£''), which is the Company's presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of the monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

2.4 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of reporting period, and any adjustment to tax payable in respect of previous periods.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the statement of profit and loss, except when it relates to items charged or credited directly to equity, in which case it is recognised in equity.

NOTES TO THE FINANCIAL STATEMENTS

2.5 Financial instruments

Financial instruments are recognised when the Company becomes a party to the contractual provisions of the instrument.

Receivables

Receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand on deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value and have an original maturity of three months or less.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Payables

Payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

NOTES TO THE FINANCIAL STATEMENTS

3 EXPENSES BY NATURE

4 EMPLOYEE BENEFIT EXPENSE

5 INCOME TAX EXPENSE

 The Company was registered in BVI. It is not regarded as resident for tax purposes in BVI. Therefore it will not liable to BVI income tax in respect of this other than BVI source income.

6 LOSS PER SHARE

The calculation of the basic loss per share is based on the profits or losses attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

The calculation of diluted loss per share is based on the basic loss per share, adjusted to allow for the issue of shares and the post tax effect of dividends and /or interest, on the assumed conversion of all dilutive options and other dilutive potential ordinary shares.

Reconciliation of the loss and weighted average number of shares used in the calculations is set out as below:

NOTES TO THE FINANCIAL STATEMENTS

7 TRADE AND OTHER RECEIVABLES

The directors consider that the carrying amount of trade payables approximates to their fair value.

8 CASH AND CASH EQUIVALENTS

Bank balances and cash comprise cash held by the Company and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

9 TRADE AND OTHER PAYABLES

The directors consider that the carrying amount of trade payables approximates to their fair value.

NOTES TO THE FINANCIAL STATEMENTS

10 SHARE CAPITAL AND SHARE PREMIUM

11 NOTES TO THE CASH FLOW STATEMENT

12 RELATED PARTY TRANSACTIONS

The Company is controlled by Xinyan Li by virtue of his shareholding disclosed on page 5.

Key management remuneration

Key management included Directors of the Company. The remuneration paid or payable to key management for employment services is shown on page 5.

NOTES TO THE FINANCIAL STATEMENTS

13 FINANCIAL INSTRUMENTS

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the Company to incur a financial loss. The Company is exposed a credit risk from its financing activities, including deposits with banks and financial institutions.

Currently, the Company is exposed to 100% of credit risk to one counter party. However the counter party is a financial institution with high credit-ratings assigned by international credit-rating agencies.

Prudent liquidity management implies maintaining sufficient cash locally and the availability of committed credit facilities. The Company is mainly financed by equity and self-generated cash flows.

Interest rate risk

The Company's policy is to fund its operations through the use of retained earnings and equity.

The Company exposure to changes in interest rates relates primarily to cash at bank. Cash is held either on current or short term deposits at floating rate of interest determined by the relevant bank's prevailing base rate.

The group seeks to obtain a favourable interest rate on its cash balances through the use premium accounts.

The Company will be exposed to financial risks arising from changes in world commodity prices which in turn affect the energy supplies and raw material changes in world prices of biodiesel, inflation and international trends in trade, tariffs and protectionism once it starts trading. The Company will reviews its position regularly in considering the need for active financial risk management.

There is no significant difference between the carrying amounts shown in the balance sheet and the fair values of the group's financial instruments. For current trade and other receivables/payables with a remaining life of less than one year, the nominal amount is deemed to reflect fair value.

The Company undertakes certain transactions denominated in foreign currencies, hence exposure to exchange rate fluctuations arise. During the period under review the Company was not trading, therefore, no foreign currency risk arose. The Company's policy, as it relates to currency risk, is to limit payment terms.

Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern while attempting to maximise the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the group consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings.

The Board reviews the capital structure on an annual basis. The Company's overall strategy remains unchanged.

INVESTING POLICY

FOR THE YEAR ENDED 31 DECEMBER 2015

The Company's objective is to generate an attractive rate of return for Shareholders by taking advantage of opportunities to invest in the hydropower market in Western China. The Directors believe that Western China is relatively underdeveloped and therefore offers an attractive potential opportunity to invest in hydropower energy. The Directors also believe that it is likely that there will be continued governmental support for investment in hydropower projects in this region. The Company is seeking to make a sizeable acquisition before the next annual general meeting in 2017, which most likely would be deemed a Reverse Takeover and therefore would require shareholders' approval. It does not intend to make any other smaller acquisitions or investments before then. The Company will ultimately aim to acquire/invest in up to 2 power-generation projects with a capacity of approximately 200 megawatts, although the Directors may target projects with a greater capacity. The Directors intend that the construction of these projects would be completed before the next annual general meeting in 2017. Before making an acquisition the Board or an independent third party will carry out a feasibility study report to check the environmental impact and to carry out a relevant profitability analysis for each potential project. The Board will only complete an acquisition if the project is considered environmentally friendly and economically profitable.

The Company will be a value and growth oriented investor, targeting opportunities with the ability for the Company to add value either through its access to capital, its network of contacts or by recruiting high quality personnel. The Company intends to be an "active" investor rather than a "passive" investor.

The Company does not have a fixed life but the Directors undertake to propose a resolution for the winding-up of the Company if no investments are made within six years of Admission. If such resolution is not passed, the Company will continue its operations and a similar resolution will be put to Shareholders each year thereafter if no investments have been made. In addition, pursuant to the AIM Rules for Companies, if the Company has not substantially implemented its investment policy before the next annual general meeting in 2017, the investment policy will be subject to approval by Shareholders at the next annual general meeting and annually thereafter.

As the Company's Investment Policy is, in the first instance, to seek an acquisition which would be deemed a Reverse Takeover and therefore result in the Company ceasing to be an "investing company" for the purposes of the AIM Rules and becoming a holding company of an operating business, it will not be relevant for the Company to undertake periodic reporting of its net asset valuation before such an acquisition is made. Full year and half yearly financial reporting is undertaken in accordance with the AIM Rules.

The Company has been advised that there are no specific licences, consents or approvals required to carry on the Company's current activities in the BVI. The Company has also been advised that it does not require any specific licences in relation to its current activities in the PRC and that it has reasonable grounds to believe that it can obtain all necessary licences and permits at the relevant time in order to make the proposed acquisition detailed above.

It should be noted that the nature of the Company's activities is speculative and, being dependent on specific investment opportunities, uncertain, accordingly, an investment in the Ordinary Shares is designed only for investors who understand such risks and uncertainties and who can afford to bear the loss of their individual investment.