Annual Report 2016 | Page 46

Annual Report 2016
Annual Report 2016

CORPORATE GOVERNANCE

The Group seeks to apply the principles of the UK Corporate Governance Code (“ the UK Code ”), where considered applicable to a private , unlisted group . The Group also applies the Walker Guidelines on transparency and disclosure and regularly monitors corporate governance best practice and the applicability of any developments to the Group . Any changes to the Group ’ s governance arrangements considered appropriate are implemented within agreed timescales .
South Staffordshire Water PLC corporate governance South Staffordshire Water PLC continues to apply the principles of its own Corporate Governance Code ( the “ SSW Code ”) which supports Ofwat ’ s published principles on board leadership , transparency and governance . Although South Staffordshire Water PLC is not a public listed company , its Board of Directors recognises that they should act , where applicable , as if it were and therefore the SSW Code has also specifically drawn on certain principles of the UK Code that may be applicable to a privately owned regulated company . A copy of the SSW Code can be found on South Staffs Water ’ s website ( www . south-staffs-water . co . uk ).
As the immediate parent company of South Staffordshire Water PLC , South Staffordshire Plc and its Board of Directors recognise the responsibilities that come from providing a public service and the Company is therefore fully committed to maintaining high standards of leadership , transparency and governance as a parent of a regulated business . The Company maintains an open dialogue with all of its subsidiaries and fully supports South Staffordshire Water PLC in complying with its statutory and regulatory obligations , including but not limited to the SSW Code and ensuring that it can make strategic and sustainable decisions that are in the long-term interests of the regulated business . Details of how South Staffordshire Water PLC follows the principles in the SSW Code are provided separately in its own Report and Accounts for the year ended 31 March 2016 . Details of how South Staffordshire Plc , as the immediate parent of South Staffordshire Water PLC , follows Ofwat ’ s Holding Company Principles are detailed in this Corporate Governance report .
The Board can also confirm , on behalf of KKR Infrastructure Limited , that it , as the ultimate controlling party of the Group , also fully supports these Holding Company Principles from Ofwat and it will continue to apply high standards of board leadership and governance .
There have been no material changes to Corporate Governance arrangements in the Group during the year , although additional disclosure has been made in respect of risk management procedures and the long term viability of the Company in the Strategic Report on pages 37 to 39 . The Board confirms that , to the best of its knowledge , there are no issues or risks at the Group level which may negatively impact on South Staffordshire Water PLC .
Group structure The Group is controlled by the Global Infrastructure Fund of the investment business Kohlberg Kravis Roberts & Co . L . P . ( KKR ), which is quoted on the New York Stock Exchange , and which holds a majority controlling interest in the Group , together with certain co-investors of KKR . The KKR Infrastructure Fund is controlled and managed by KKR Infrastructure Limited , a company registered in the Cayman Islands ( the “ Holding Company ”).
South Staffordshire Plc , as the immediate parent company of South Staffordshire Water PLC , ensures through its detailed knowledge of all of its subsidiaries and the water industry that it understands the duties and obligations of a regulated company including Condition P of its licence and , although some Directors sit on both Boards , South Staffordshire Water PLC acts , where applicable , with the support of the Company , as if it were a separate listed company . South Staffordshire Plc has processes in place to provide South Staffordshire Water PLC with information that it requires about the wider Group . South Staffordshire Plc provides management , professional and administrative support services to South Staffordshire Water PLC and other of its subsidiaries on a cost basis . There is no direct interaction between South Staffordshire Water PLC and the Holding Company .
There are a number of UK registered intermediate holding companies above South Staffordshire Plc in the Group structure , headed by Hydriades IV Limited , the ultimate holding company registered in the UK . There are also intermediate holding companies above Hydriades IV Limited which are registered in
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