Nanteague Solar Limited

The principal activity of the C ompany in the year under review was that of the operation of a solar photovoltaic plant in Truro, Cornwall UK, earning revenue from the sale of electricity generated. Country of incorporation and legal form of the entity Nanteague Solar Limited was incorporated as a private company, limited by shares, under the Registrar of Companies for England and Wales on 23 February 2011. Risk management and control In the ordinary course of business, the Company is exposed to and manages a variety of risks in relation to its activities, including financial risk. The management of credit, interest rate, liquidity and operational risks are fundamental to the Company, with the Board of directors having responsibility for the overall system of internal control and for reviewing its effectiveness. The key areas of risk in relation to the use of financial statements are listed below and are properly addressed by the management of the Company: Credit risk: Losses due to the inability or unwillingness of a customer to meet its obligations. This is mitigated by the Company entering into price agreements with creditworthy counterparties for the purchase of electricity to be generated by the solar photovoltaic plant. Interest risk: Fluctuations in the prevailing levels of market rates of interest pose a risk to the Company's financial position and cash flow. This is not considered a significant risk to the Company as the interest on intra-group loans is charged at a rate agreed by the parent company and are not subject to interest movements in the market. Liquidity risk: Failure to meet financial obligations in a timely and cost effective manner due to mismatches in the maturity profile of assets and liabilities. The Company closely monitors its cash flow levels and financial obligations to anticipate its future cash commitments. Operational risk: Failure to meet expected levels of generation output due to technical issues affecting performance of the plant. The Company has sought to mitigate this risk by the appointment of Bluefield Services Limited, as its dedicated asset manager, with responsibility for closely monitoring the performance of the plant, ensuring activities conducted by third party contractors are completed in a timely fashion and as required, contractual protections are enforced. The Company also has insurance policies in place that protect against generation loss in situations out of the Company's control. Price risk: The success of the Company is sensitive to future power market pricing, and a major shift in power demand or supply will impact the Company’s ability to meet its financial targets. 40% of the income generated by the Company is linked to power market prices and so in the unlikely event of a major structural shift in power prices due to reduced demand or excess energy supply, there could be an impact on the Company’s earnings. A rolling programme of PPA contract expiries has been implemented to mitigate risk, alongside the fact the Company receives 60% of its income from the government backed ROC regime.