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COCG Code Principle 2: Board Composition and Guidance
The Board consists of seven members, three of whom are Independent directors for the purposes of the Business
Trusts Act, Chapter 31A of Singapore (“BTA”).
The composition of the Board of the Trustee-Manager is determined by the following principles:
• At least a majority of directors who are independent from management and business relationships with the
Trustee-Manager;
• At least one third of directors who are independent from management and business relationships with the
Trustee-Manager and from every substantial shareholder of the Trustee-Manager;
• At least a majority of the directors who are independent from any single substantial shareholder of the
Trustee-Manager;
• The Chairman of the Board should be a non-executive Director; and
• The Board should comprise directors with a broad range of commercial experience including expertise in
funds management and the property industry.
The Board is made up of individuals with a broad range of commercial experience, including expertise in fund
management and the property industry. They are of the view that the size of the Board is appropriate to facilitate
effective decision-making. Composition of the Board is reviewed periodically to ensure that the Board continues
to comprise an appropriate mix of expertise and experience.
During the year, the sole shareholder of the Trustee-Manager undertook an independent review of the
Board composition and terms of appointment of Board members taking into account the guidance on board
composition contained within the COCG. As a result of this review, two additional directors, Mr. Graham Sugden
and Mr. Xu Sitao, were appointed to the Board on 18 May 2012. As can be seen from their biographies on pages
10 to 13, the appointments strengthened the ability of the Board in delivering a strong performance for Forterra
in the Chinese market.
As part of the review by the sole shareholder of the Trustee-Manager, it was noted that the Memorandum &
Articles of Association of the Trustee-Manager did not specify defined terms of service for directors, which was
not in compliance with the COCG. As a result, changes were made to the Memorandum & Articles of Association
of the Trustee-Manager such that each director can only serve a thirty month term, with the option of the Board
to renew the term of service for a further thirty month period. Following the implementation of these changes,
Mr. Barrett, Mr. David, Mr. Williams, Mr. Leckie, Mr. Jen and Mr. Horney vacated their office as directors on
25 July 2012. The Board was of the view that the skill set, experience and knowledge of Mr. Barrett, Mr. David
and Mr. Williams was of considerable value to Forterra and the Trustee-Manager and therefore they were
appointed for a further thirty month term on 25 July 2012. In addition to this, Mr. Yoon Wai Nam was appointed
to the Board on 25 July 2012.
Following the changes, the Board is satisfied that the new composition promotes new perspectives, skills,
experience, knowledge, energy, contact bases and direction for the benefit of Unitholders of Forterra.
The Board have reviewed and determined the independence of the directors using the criteria as set out in
Regulation 12(7) of the Business Trusts Regulations 2005 (“BTR”) and are satisfied that the Board composition
of the Trustee-Manager continues to meet the independence requirements as set out in the BTA and that the
independent directors, being Mr. Graham Sugden, Dr. Tan Khee Giap and Mr. Yoon Wai Nam remain independent.
Mr. Xu is not considered to be independent from management and business relationships with the Trustee-
Manager under Regulation 3 of the BTR and not deemed to be an independent director under Guideline 2.3 of the
COCG due to the receipt of consultancy fees by Mr. Xu from the Forterra Group for the provision of consultancy
services during the three years leading up to his appointment. However, (i) pursuant to Regulation 12(6) of
the BTR, the Board has determined that Mr. Xu is independent from management and business relationships
with the Trustee-Manager under Regulation 3 of the BTR on the basis that the Board is satisfied that Mr. Xu’s
independent judgment and ability to act with regard to the interests of all the Unitholders will not be interfered