##### 



---

U.S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549



FORM 40-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
THE SECURITIES EXCHANGE ACT OF 1934

|                                            |  |                               
|------------------------------------------- |  | ------------------------------
|For the fiscal year ended December 31, 2002 |  | Commission File Number 1-11796

Masonite International Corporation(Exact name of Registrant as specified in its charter)

Premdor Inc.
(Former name of Registrant)

|                                                                         |  |                                                              |  |                                               
|------------------------------------------------------------------------ |  | ------------------------------------------------------------ |  | ----------------------------------------------
|Ontario(Province or other jurisdiction of
incorporation or organization) |  | 2431(Primary Standard Industrial
Classification Code Number) |  | 98-0377314(I.R.S. Employer
Identification No.)

1600 Britannia Road East
Mississauga, Ontario, Canada L4W 1J2
(905) 670-6500(Address and telephone number of Registrants principal executive offices)

Mr. Steve MacIsaac
Masonite Holdings, Inc.
One North Dale Mabry
Tampa, Florida 33609
(813) 877-2726(Name, address (including zip code) and telephone number
(including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

|                            |  |                                                       
|--------------------------- |  | ------------------------------------------------------
|Title of each class         |  | Name of each exchange on which registered             
|                            |  |                                                       
|Common Shares, no par value |  | New York Stock Exchange and The Toronto Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

None

For annual reports, indicate by check mark the information filed with this Form:[X] Annual information form      [X] Audited annual financial statements

Indicate the number of outstanding shares of each of the issuers classes of
capital or common stock as of the close of the period covered by the annual
report:

The Registrant had 51,251,978 Common Shares
Outstanding as at December 31, 2002

Indicate by check mark whether the Registrant by filing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
(the Exchange Act). If Yes is marked, indicate the filing number assigned
to the Registrant in connection with such Rule.

Yes [   ]         No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes [X]         No [   ]

---





---



##### 



Documents included in this Form:

|    |  |                                                                                                                                                                                                              
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No. |  | Document                                                                                                                                                                                                     
|    |  |                                                                                                                                                                                                              
|1.  |  | Annual Information Form of the Registrant for the fiscal year ended
December 31, 2002                                                                                                                        
|2.  |  | Consolidated Audited Financial Statements of the Registrant as at and for
the years ended on December 31, 2002 and 2001, including a reconciliation
to United States generally accepted accounting principles
|3.  |  | Managements Discussion and Analysis of Financial Condition and Results
of Operations of the Registrant                                                                                                      
|4.  |  | Comments by Auditors for United States Readers on Canada-U.S. Reporting
Difference                                                                                                                           

Controls and Procedures

Within the 90 days prior to the filing date of this report, the Registrant
carried out an evaluation, under the supervision and with the participation of
the Registrants management, including the Registrants Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation
of the Registrants disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Registrants disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Registrant (including its consolidated subsidiaries) required
to be included in the Registrants periodic Securities and Exchange Commission
filings. No significant changes were made in the Registrants internal controls
or in other factors that could significantly affect these controls subsequent
to the date of their evaluation.

Disclosure controls and procedures are those controls and other procedures that
are designed to ensure that information required to be disclosed by the
Registrant in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized, and reported within the time periods specified
in the Securities and Exchange Commissions rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by the Registrant
in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the Registrants management, including the Registrants
principal executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure.

2



---



##### 



DOCUMENT 1





---



##### 



MASONITE INTERNATIONAL CORPORATION

ANNUAL INFORMATION FORM


May 7, 2003





---



##### 



TABLE OF CONTENTS

|                                                   |                                          |  |    |    | 
|-------------------------------------------------- | ---------------------------------------- |  | -- | -- | 
|ITEM 1 COVER PAGE                                  |                                          |  |    |   
|ITEM 2 CORPORATE STRUCTURE                         |                                          |  | 1  |   
|                                                   | Subsidiaries and Investments             |  |    | 1  | 
|ITEM 3 GENERAL DEVELOPMENT OF THE BUSINESS         |                                          |  | 2  |   
|                                                   | General                                  |  |    | 2  | 
|                                                   | Nature of the Business                   |  |    | 2  | 
|                                                   | Corporate History of the Company         |  |    | 2  | 
|                                                   | Financing History                        |  |    | 3  | 
|ITEM 4 NARRATIVE DESCRIPTION OF THE BUSINESS       |                                          |  | 4  |   
|                                                   | Corporate Strategy                       |  |    | 4  | 
|                                                   | Benefits of Vertical Integration         |  |    | 4  | 
|                                                   | Geographic Segment Financial Information |  |    | 5  | 
|                                                   | Pricing                                  |  |    | 5  | 
|                                                   | Raw Materials and Manufacturing Process  |  |    | 5  | 
|                                                   | Distribution                             |  |    | 6  | 
|                                                   | Seasonality                              |  |    | 7  | 
|                                                   | Products                                 |  |    | 7  | 
|                                                   | Environmental Protection                 |  |    | 10 | 
|                                                   | Competition                              |  |    | 10 | 
|                                                   | Research and Development                 |  |    | 10 | 
|                                                   | Trademarks                               |  |    | 10 | 
|                                                   | Employees                                |  |    | 11 | 
|                                                   | Properties                               |  |    | 12 | 
|ITEM
5 SELECTED CONSOLIDATED FINANCIAL INFORMATION |                                          |  | 12 |   
|                                                   | Last Five Financial Years                |  |    | 12 | 
|                                                   | Last Eight Quarters                      |  |    | 13 | 
|                                                   | Dividend Policy                          |  |    | 13 | 
|ITEM 6 MANAGEMENTS DISCUSSION AND ANALYSIS        |                                          |  | 13 |   
|ITEM 7 MARKET FOR SECURITIES                       |                                          |  | 13 |   
|                                                   | Share Purchase Rights                    |  |    | 13 | 
|ITEM 8 DIRECTORS AND OFFICERS                      |                                          |  | 14 |   
|ITEM 9 ADDITIONAL INFORMATION                      |                                          |  | 15 |   
|                                                   | Forward-Looking Statements               |  |    | 16 | 





---



##### 



MASONITE INTERNATIONAL CORPORATION

ANNUAL INFORMATION FORM

May 7, 2003

Except where the context otherwise requires, all references in this annual
information form (AIF) to the Company are to Masonite International
Corporation and its subsidiaries. In this AIF, references to $ and Cdn.$
are to United States and Canadian dollars, respectively, and unless otherwise
indicated, the statistical and financial data contained in this AIF are
presented as at December 31, 2002.

ITEM 2 CORPORATE STRUCTURE

The Company was formed by articles of amalgamation under the Business
Corporations Act (Ontario)on January 1, 2002 upon the amalgamation of Premdor
Inc. and its wholly owned subsidiaries, Masonite International Corporation and
Les Portes Centenaires Ltée (the Amalgamation). The registered and principal
office of the Company is located at 1600 Britannia Road East, Mississauga,
Ontario, L4W 1J2. The Companys common shares trade on The Toronto Stock
Exchange and the New York Stock Exchange under the symbol MHM.

Subsidiaries and Investments

The following corporate structure chart illustrates the Companys material
subsidiaries and investments as of May 2003 and identifies their respective
jurisdictions of incorporation and the percentage of voting securities
beneficially owned, or over which control or direction is exercised by the
Company:

(MASONITE INTERNATIONAL CORPORATION CORPORATE STRUCTURE CHART)

1



---



##### 



ITEM 3 GENERAL DEVELOPMENT OF THE BUSINESS

General

Masonite International Corporation is one of the worlds largest
manufacturers of doors and door components. On January 1, 2002, as a result of
the Amalgamation, Premdor Inc. (Premdor) changed its name to Masonite
International Corporation (Masonite International). Masonite International
is a unique, integrated, global building products company with its corporate
headquarters in Mississauga, Ontario and its international administrative
offices in Tampa, Florida. It operates over 70 facilities in 12 countries in
North America, South America, Europe, Asia and Africa and has over twelve
thousand employees. The Company sells its products to customers in over 50
countries.

Nature of the Business

The principal business of the Company is the manufacture of doors, door
components and door entry systems for new residential construction, home
repair, renovation and remodelling and commercial use. The Company
manufactures a broad line of interior doors, including standard residential
flush, molded-facing, stile and rail, louvre and specially-ordered commercial
and architectural doors. The Company also manufactures door components for
internal use and sale to other door manufacturers. It also manufactures
exterior residential metal and fiberglass doors and entry systems. These door
products are manufactured, merchandised and sold to large distributors,
jobbers, home centre chains and wholesale and retail building supply dealers
across North America, South America, France, the United Kingdom, Europe and
other countries in the Middle East and Asia. Doors, door components and door
entry systems accounted for 96% of the Companys total dollar sales in 2002.

Corporate History of the Company

The Company commenced business in 1955 in Toronto, Ontario as the
purchasing division of a retail lumberyard. It began manufacturing doors in
1961. The Companys original product was a full line of flush doors. Over
time, the Company introduced other wood doors, including louvre, stile and
rail, plastic laminate, fire doors and pre-built units.

From 1975 to 1998, the Company expanded worldwide, initially establishing
and acquiring door manufacturers in Canada and then in the United States, the
United Kingdom and France. Through this period of growth, the Company
increased its sales of interior residential doors and expanded its product line
with architectural doors and metal and fibreglass exterior doors and entry
systems.

During 1999, the Company acquired an equity interest in Mifalay Etz
Carmiel Limited of Tel Aviv, Israel; acquired the remaining interest in Portico
S.A. not already owned; sold a 50% interest of Premdor Mexico S.A. de C.V. to
Terranova Internacional S.A; acquired Batimetal S.A. of Douvres, France; and
acquired an additional equity interest in Les Portes Cascades Inc. of St.
Hyacinthe, Quebec.

Also in 1999, following a 10-year vendor-customer relationship, Premdor,
International Paper Company and its subsidiary Masonite Corporation (a leading
manufacturer of molded door facings) entered into a strategic alliance
agreement under which Premdor and Masonite Corporation agreed to work together
to increase demand for molded door products, to achieve cost savings and to
enhance distribution efficiencies.

During 2000, the Company acquired Steelwood Entry Systems Inc. of Vaughan,
Ontario; specific assets of Atlantic Door Fabrication Services, Inc. of Acton,
Massachusetts; and specific assets of Wing Industries of Greenville, Texas. In
addition, the Company increased its equity interest in Specialty Building
Products Ltd. of Brampton, Ontario to 50%.

2



---



##### 



Masonite Corporation

On August 31, 2001, the Company completed the acquisition of Masonite
Corporation from International Paper Company for a purchase price including
transaction costs of approximately $427 million of which approximately $314
million was paid in cash and the remainder in the form of unsecured
subordinated long-term debt. Regulatory approval of the transaction was
contingent on the subsequent divestiture by the Company of Masonite
Corporations facility in Towanda, Pennsylvania. The sale of the Towanda
facility was completed in the first quarter of 2002.

Masonite Corporation is a global leader in engineered wood composite
products, with six manufacturing facilities in North America, Europe, Asia and
Africa. Masonites products include molded door facings, industrial hardboard
and softboard for residential and commercial use. Masonite Corporation is the
largest manufacturer of molded door facings in the world. Prior to its
acquisition, Premdor was Masonite Corporations single largest customer.

Masonite Corporation was founded in 1925 in Laurel, Mississippi by William
H. Mason, whose objective was to utilize the vast available quantities of
sawmill waste to manufacture a useable end product. Masonites first major
invention and successful product was hardboard, a conversion of wood fiber mat
under intense heat and pressure into thin, dense, tough sheets used in the
manufacture of a variety of products for residential and commercial
construction, retail and other applications.

In the early 1970s, Masonite began production of door facings, also known
as door skins. In 1975, Masonite Corporation began the first commercial
production of molded door facings. Though not the first company to produce door
facings, Masonite Corporation soon became the market leader through advanced
technology.

In 1996, Masonite Corporations exploration of scaled production
methodologies led to the acquisition of the FormTECTM process, a unique method
of manufacturing molded door facings on a micro-scale by molding already
pressed thin MDF (medium density fiberboard) purchased from third-party
suppliers. The advantages of this process are low plant construction and
start-up costs and the wide availability and transportability of MDF at an
economical cost. Masonite Corporation established its first FormTECTM
operation in South Korea in 1999.

Masonite International

In 2002, the Company purchased the remaining interest in several less than
wholly-owned companies, Fibramold S.A. of Chile, Premdor Mexico S.A. de C.V.,
Megantic Manufacturing Company Inc. and Les Portes Cascade. Subsequent to
these acquisitions, Fibramold S.A. changed its name to Masonite Chile S.A. and
Premdor Mexico S.A. de C.V. changed its name to Masonite Mexico S.A. de C.V.
The Company also made an equity investment in Sacopan, Inc., a molded door
facing manufacturing facility in Sacre-Couer, Quebec.

Financing History

In July 2001, the Company entered into an agreement to issue and sell
7,150,000 common shares for net proceeds of approximately $63 million. In
August 2001, the Company entered into a credit agreement with a banking
syndicate providing for a $685 million secured credit facility. Proceeds from
these financings were used to pay the cash portion of the purchase price of
Masonite Corporation, retire then existing senior debt and to provide working
capital.

In July 2002, the Company completed a refinancing of its existing bank
facilities. The Company entered into an amended and restated credit agreement.
At the closing of the amended and restated credit agreement, $650 million was
available to be drawn through a combination of term facilities having varying
maturity dates and interest rates. The new bank facilities are secured by
fixed and floating charges over substantially all of the Companys assets. The
Company used the proceeds from the refinancing to repay existing indebtedness
including the Companys subordinated long-term debt.

3



---



##### 



ITEM 4 NARRATIVE DESCRIPTION OF THE BUSINESS

Corporate Strategy

Masonite Internationals primary objective is to increase shareholder
value by pursuing strategic growth through focusing on one product line 
doors  and expanding in all significant markets throughout the world. With
manufacturing facilities in twelve countries and sales worldwide, Masonite
International has continuously expanded through start-ups and acquisitions. It
has increased sales in both domestic and export markets through innovative
merchandising and marketing initiatives that emphasize quality, value and
service. As demand for building products increases outside North America,
Masonite Internationals manufacturing, merchandising and sales expertise
enable it to become one of the leading door company in the world. As part of
this strategy, the Companys goal was to achieve substantial vertical
integration and this has been accomplished to a large extent through the
acquisition of Masonite.

Benefits of Vertical Integration

Lower operating costs

The Company is exploiting further opportunities to increase capacity
utilization and reduce manufacturing costs by continuing the integration of the
Masonite Corporation and Premdor operations. This is creating cost savings in
labour, overhead, materials procurement and logistics while improving customer
service. The combination of the Companys assets creates significant economies
of scale with opportunities for improved supply chain management based on
purchase volumes and size.

Improved customer service

The Company has a large range of doors, door components and door entry
systems designed for home improvement and construction. Vertical integration
has allowed the Company to increase the flexibility and efficiency of its
manufacturing operations, increase product diversity and extend its global
reach.

Advanced technology

The acquisition of Masonite Corporation added significantly to the
Companys research and development capabilities. R&D activities are
concentrated in the Companys 141,000 sq. ft. research centre in West Chicago,
Illinois. During 2002, the centre employed approximately 70 people engaged in
various forms of research and product development.

Management believes the Company is at the forefront of technological
innovation and development in doors, door components and door entry systems and
the manufacturing processes involved in making such products. Research and
development (R&D) is a major competitive advantage for the Company and
management intends to capitalize on its leadership through the development of
more innovative products.

As a fully integrated manufacturer, the Company believes that it is well
positioned to take advantage of the growing global demand for a variety of
molded door facing designs. This capability is particularly important outside
North America where newer molded door designs are rapidly replacing traditional
wood doors and are proving to be an important competitive advantage. The
Company has an internal capability, unique in the industry, to create new
molded door facing designs and manufacture its own molds for use in its own
facilities. This provides the Company with the ability to develop proprietary
designs that enjoy a stronger identity in the marketplace; more flexibility in
meeting customer demand; quicker reaction time in the production of new designs
or design changes and greater responsiveness to customer needs.

4



---



##### 



Geographic Segment Financial Information

The following geographic segmented financial information summarizes the
Companys sales and operating income for each of the years in the three year
period ended December 31, 2002 and is derived from the Companys consolidated
financial statements for the year ended December 31, 2002 contained in the 2002
annual report:

|                                       |        |   |                        |         |      |   |           |         |  |   |           |         | 
|-------------------------------------- | ------ | - | ---------------------- | ------- | ---- | - | --------- | ------- |  | - | --------- | ------- | 
|                                       |        |   | Year Ended December 31
|                                       |        |   | (dollars in thousands)
|                                       |        |   |                       
|                                       |        |   | 2002                   |         | 2001 |   | 2000     
|                                       |        |   |                        |         |      |   |          
|Sales
North America                    |        | $ | 1,357,508              |         |      | $ | 1,200,491 |         |  | $ | 1,088,864 |        
|                                       | Europe |   |                        | 262,008 |      |   |           | 221,111 |  |   |           | 202,911 | 
|                                       |        |   |                        |         |      |   |           |         |  |   |           |        
|                                       |        | $ | 1,619,516              |         |      | $ | 1,421,602 |         |  | $ | 1,291,775 |        
|                                       |        |   |                        |         |      |   |           |         |  |   |           |        
|Segment Operating Income
North America |        | $ | 165,435                |         |      | $ | 116,510   |         |  | $ | 90,862    |        
|                                       | Europe |   |                        | 27,788  |      |   |           | 14,709  |  |   |           | 9,865   | 
|                                       |        |   |                        |         |      |   |           |         |  |   |           |        
|                                       |        | $ | 193,223                |         |      | $ | 131,219   |         |  | $ | 100,727   |        
|                                       |        |   |                        |         |      |   |           |         |  |   |           |        

Pricing

Door prices are influenced primarily by the cost of raw materials, which
usually comprise more than 50% of the total cost of the finished product.
Principal raw materials are commodity items that are purchased from suppliers
located in North America, the Far East, Europe, South America and Africa. In
most cases, purchases from those suppliers are priced in U.S. dollars.
Fluctuations in the cost of raw materials and currency exchange rates affect
all manufacturers of doors.

Raw Materials and Manufacturing Process

The primary raw materials used in the manufacture of wood doors are
cut-stock (lumber cut to the various sizes required for components) and door
facings. Cut-stock is purchased primarily from suppliers located on the west
coast of North America, the southern United States, Europe, eastern Canada,
southern Africa and South America. Plywood door facings are imported
principally from the Far East, although certain types of hardwood veneer door
facings are sourced in North America. Hardboard door facings are purchased
from suppliers in Canada, the United States, South America and Africa. Molded
hardboard door facings are produced at the Companys facilities in the United
States, Ireland, Chile and South Korea. The Company also purchases molded door
facings from Sacopan Inc. Subject to seasonal fluctuations, the lead time
required for shipments of plywood is approximately three months and ranges from
two to eight weeks for cut-stock and hardboard (molded and flat).

The manufacture of wood doors is primarily an assembly operation.
Cut-stock is either acquired from suppliers or cut by the door manufacturer. If
necessary, the cut-stock is milled into the various dimensions required for
different door styles and sizes. The assembly process varies by type of door,
from a relatively simple process for flush doors, where the door facings are
glued to a wood frame, to more complex procedures for the many pieces of a
louvre or stile and rail door. Following assembly, doors are trimmed to their
final specifications. Short set-up times, proper production scheduling and
co-ordinated material movement are essential to achieve a flexible process
capable of producing a wide range of door types, sizes, materials and styles.

The primary raw materials used in the manufacture of metal and fiberglass
doors are steel, fiberglass, polyurethane and cut-stock, which are primarily
purchased from suppliers in North America. The lead-time required for
shipments of steel and fiberglass is approximately eight to ten weeks.

5



---



##### 



The manufacture of insulated metal and fiberglass doors consists primarily
of the fabrication of steel sheets embossed into panel or flush door facings
and fiberglass door facings which are then assembled onto a wood framing system
(or steel framing system in the case of certain steel doors). The doors are
then injected with polyurethane insulation.

The Companys Door Fabrication Services division (DorFab) purchases
interior flush doors, stile and rail and louvre doors, and exterior doors from
the Companys manufacturing plants and provides value added fabrication and
logistical services to big box retail home centres throughout North America.
These value added products include doors which are machined for hinges, passage
and lock sets, the incorporation of decorative glass lites (inserts) into
exterior doors and the installation of these doors into interior and exterior
frames creating complete entry systems.

Periodically, certain commodity components used in the manufacture of
doors rise in price significantly or decrease in availability. The risk
associated with rising material prices is that these costs may not be passed on
to customers. The risk related to the unavailability of certain raw materials
is that the Companys sales will decline if alternative door products
manufactured by the Company are not accepted in the marketplace. The Company
manages these risks by developing strategic relationships with suppliers and
customers, aggressively searching for substitute components, developing new
products and seeking alternative sources of supply.

Distribution

Generally the major customers of door manufacturers are two-step
distributors, one-step distributors, jobbers, home centre chains and wholesale
and retail building supply dealers. Retail building supply dealers,
lumberyards and home centre chains are the primary merchandisers to the
do-it-yourself segment of the repair, renovation and remodelling segment.
Builders and contractors purchase their door requirements primarily from
one-step distributors, lumberyards, home centre chains and wholesale building
supply dealers.

(DISTRIBUTION CHART)

6



---



##### 



In Canada, the Company sells primarily to a distributor which resells the
Companys products to wholesale and retail building supply dealers, lumber
yards, home centre chains and pre-hangers (suppliers of doors to builders on an
installed basis), some of which are members of buying groups. In the United
States, the Companys major customers are two-step distributors, one-step
distributors and large home centre chains. In Europe, the Companys customers
are home centre chains and large distributors. Door manufacturers in Canada,
the United States, France and the United Kingdom rely primarily on a
combination of their own sales forces and independent sales agents.

The Company believes its DorFab division has the geographic coverage
necessary to effectively service North America. As the only North American
logistic and fabrication provider serving retail home centers with a full line
of interior and exterior door products, DorFab is unique in the industry.

Seasonality

The building products industry in North America is seasonal, particularly
in the northeast and midwest regions of the United States and in most regions
of Canada. During the winter months in these regions, inclement weather
generally reduces building activity, particularly in the new construction
market. However, the Companys expansion into areas of more moderate climate
(e.g., the southeast, southern and western part of the United States, France,
the United Kingdom and Mexico) and its focus on the repair, renovation and
remodelling segment, which is less seasonal than new construction, has helped
to smooth this influence on operations. Additional product and geographic
diversification following the 2001 acquisition of Masonite Corporation has also
positively affected the seasonality of the Companys results.

Products

Demand for doors is derived from three principal sources: new residential
construction; repair, renovation and remodelling activity; and commercial
renovation and construction.

The Company sells interior and exterior doors, with interior doors
accounting for approximately 66% of the total door sales revenue and exterior
doors for the balance during 2002. While substantially all interior doors are
made with wood and related materials such as hardboard (including molded and
flat door facings), the use of wood in exterior doors in North America has
declined over the last decade as a result of the introduction of metal and
fibreglass doors. The Companys exterior doors are made primarily of metal or
fiberglass. The Company offers an extensive range of interior and exterior
doors, which are available in a wide variety of sizes, styles and types.

The Company has become a leader in merchandising and advertising through
point of sale displays, in-store merchandising and training programs, magazine
and television advertisements, regional flyer programs and do-it-yourself
videos for doors distributed through home centres. In addition, the Company
advertises its products at numerous events, including trade shows in Canada,
the United States, Europe, Asia and the Middle East. The Company has also
developed consumer brochures, including a planning guide and do-it-yourself
products to assist the consumer in the purchase and installation of doors, as
well as training programs designed to assist home centre sales personnel with
product knowledge and sales strategies.

The Company has launched several new interior residential doors in the
past few years: the SAFE N SOUND®, the RENOVATOR®, PREMWOOD® and the High
Style French Wood stile and rail doors. The SAFE N SOUND® series door is a
molded facing door with a solid core. The inclusion of the solid core greatly
enhances the doors sound deadening and fire resistance properties when
compared to standard hollow core doors. In 1998, the Company developed
PREMCOR, a new core material for SAFE N SOUND®
doors. The SAFE N SOUND®
door has the look and feel of a solid wood door at a much lower price. The
RENOVATOR® series door is a low priced French door having the look of a higher
priced solid wood French door. PREMWOOD® is a door with a simulated mahogany,
oak or birch wood grain surface which is designed to be stained or painted and
is an alternative to mahogany, oak or birch doors. Since their launch, these
products have been enhanced and modified to keep pace with changing consumer
preferences. The High Style French Wood stile and rail door is a series of
French Doors targeted at the mid and upper priced door market.

7



---



##### 



In 1998, the Company launched a pre-painted and pre-stained embossed panel
door for use in manufactured housing, new construction, remodelling and
emerging market applications. Embossed door facings are made by impressing a
pattern on flat medium density fiberboard.

During 2000, the Company launched several new exterior door products and
now offers the widest range of exterior doors available in the industry. These
products include a new line of non-textured fiberglass exterior doors marketed
as ArTekTM and PREMVU® Series Patio Units.

In 2001, the Company launched the Masonite® HD High-Definition Steel and
PREMVU® Flush-Glazed Steel Door lines. For interior doors, the new Two Panel
Roman design Smooth Molded Panel Series Door was introduced. The Company also
released Masonite® Wainscot, an easy to install high-definition raised panel
wainscot system.

In 2002, Masonite launched the full-line of OakcraftTM and ArTekTM
Flush-Glazed Fiberglass Doors. Oakcraft and ArTek 20 minute fire doors were
also launched. For interior doors, the PalazzoTM Series Door with distinct
raised moulding combined with unique high-definition panel profiles was
released.

In North America, doors are marketed primarily under the Masonite® brand.
Other North American brands include: Premdor®, Johnson, Rigi-Dor®,
Castlegate®, Evergreen®, Timbergrain®, OakcraftTM, ArTekTM, PREMVU®, Royal
MahoganyTM, Span-RiteTM, Safe N Sound®, PremcorTM, CrownTM, Miami, PalazzoTM,
BellagioTM, CapriTM, and Mohawk®.

In Europe, doors are marketed under the Premdor®, EkemTM, FonmartyTM, MagriTM,
MonnerieTM, BatimetalTM and Crosby® brands.

The following is a description of the principal types of doors that the
Company manufactures and sells:

|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Molded Flush     |  | Doors made by sandwiching a wood frame and a hollow
or solid core between two molded hardboard facings.
These doors are used for closets, bedrooms, bathrooms
and hallways.                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Flush            |  | Doors made by sandwiching a wood frame and a hollow
or solid core between two facings made of plywood or
hardboard (flat or embossed). These doors are used
for closets, bedrooms, bathrooms and hallways.                                                                                                                                                                                                                                                                                                                                                                                             
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Stile and Rail   |  | Doors made from solid wood with vertical stiles,
horizontal rails and wood panels, which have been
cut, milled and assembled from a single type of
lumber such as clear pine, knotty pine, oak and
mahogany. Where glass panels are inserted between
stiles and rails, the resulting door when used for
interior purposes is referred to as a French door.
For interior purposes these doors are primarily used
for hallways, room dividers, closets and bathrooms.
For exterior purposes these doors are used as entry
doors and decorative glass inserts (lites) are often
inserted into these doors.
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Louvre           |  | Doors with sloping horizontal slats that admit light
and air. These doors are used for hallways, closets,
and cabinets and as interior and exterior decorative
shutters.                                                                                                                                                                                                                                                                                                                                                                                                                               
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Bifold           |  | Hinged folding doors (typically flush or louvre
doors) used in closets or as room dividers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Plastic Laminate |  | Flush doors with a plastic veneer facing, generally for
commercial use                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

8



---



##### 



|              |  |                                                                                                                                                                                                 
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Prebuilt      |  | Interior and exterior doors sold together with door
frames as units, sometimes referred to as pre-hung
doors.                                                                                 
|              |  |                                                                                                                                                                                                 
|Architectural |  | Doors custom-designed to architectural specifications
generally for commercial uses such as in office
buildings, hotels, schools and hospitals.                                                 
|              |  |                                                                                                                                                                                                 
|Metal         |  | Exterior doors made by assembling two interlocking
steel facings (panelled or flat) or attaching two
steel facings to a wood or metal frame and injecting
the core with polyurethane insulation.
|              |  |                                                                                                                                                                                                 
|Fiberglass    |  | Exterior doors made by assembling two fiberglass
facings to a wood frame and injecting the core with
polyurethane insulation.                                                                   
|              |  |                                                                                                                                                                                                 
|Entry Systems |  | Exterior doors sold together with door frames, with
or without side window panels, as units.                                                                                                    

The Companys sales and marketing efforts have increasingly reflected an
international focus. In 1990, door sales outside of North America represented
3% of aggregate door sales. In 2002, door sales outside North America were
approximately 20% of the Companys aggregate door sales. This increase in
sales abroad is the result of acquisitions and internal growth. The Company
expects that a major portion of the future growth of its door business will be
in the United States, Europe, Mexico, the Middle East, South America and Asia.

According to information available to the Company, housing starts (in
thousands) in the Company's major markets were as follows;

|     |  |               |       |        |  |                |     |        |  |  |     |  |  |  |     | 
|---- |  | ------------- | ----- | ------ |  | -------------- | --- | ------ |  |  | --- |  |  |  | --- | 
|Year |  | United States |       | Canada |  | United Kingdom |     | France
|     |  |               |       |        |  |                |     |       
|2002 |  |               | 1,705 |        |  |                | 205 |        |  |  | 183 |  |  |  | 280 | 
|2001 |  |               | 1,602 |        |  |                | 163 |        |  |  | 179 |  |  |  | 305 | 
|2000 |  |               | 1,590 |        |  |                | 152 |        |  |  | 176 |  |  |  | 305 | 

The Company estimates that in 2002 just under 50% of its door sales were
from new construction (both residential and commercial) with the balance from
repair, renovation and remodelling.

The Company does not maintain a significant finished goods inventory but
relies heavily upon flexible manufacturing operations together with scalable
logistics primarily through the use of common carriers to fill customers
orders.

While doors are expected to continue to constitute more than 90% of the
Companys total sales during 2003, the acquisition of Masonite added other
profitable products to the Company as described below.

Molded door facings are thin sheets of molded hardboard produced by
grinding or defribrating wood chips, adding resin and other ingredients,
creating a thick fibrous mat composed of dry wood fibers and pressing the mat
between two steel dies to form a molded sheet, the surface of which may be
smooth or may contain a wood grain pattern. Following pressing, molded door
facings are trimmed, coated with primer and shipped to door manufacturing
plants where they are mounted on frames to produce molded doors. Masonite
introduced its original and most popular six-panel design in 1975 and later
added a number of new designs, textures and sizes, as well as tall door
facings, factory stained door facings and commercial designs.

The molded door facing industry contains one other large competitor that
also manufactures interior and exterior doors and a number of other, smaller
manufacturers. The Company produces molded door facings to meet its own
requirements and serves as an important supplier to the door industry at large.
The Company manufactures molded door facings at its facilities in Mississippi,
Ireland, Chile, and South Korea. The Company also purchases molded door
facings from Sacopan Inc.

9



---



##### 



The Companys other products include engineered wood composite products
including industrial hardboard and softboard and other door components.

Environmental Protection

The geographic breadth of the Companys facilities subject it to
environmental laws, regulations and guidelines in a number of jurisdictions,
including Canada, the United States, the United Kingdom, France, Mexico, Chile,
Costa Rica, Israel, South Africa and South Korea. Such laws, regulations and
guidelines relate to, among other things, the discharge of contaminants into
water and air and onto land, the storage and handling of certain regulated
materials used in the manufacturing process and the disposal of wastes.

The Companys efforts to ensure environmental compliance include the
review of its operations on an ongoing basis utilizing in-house staff and on a
selective basis by specialized environmental consultants. Environmental
assessments are conducted as part of the Companys due diligence review prior
to the completion of acquisitions.

Based on recent experience and current projections, environmental
protection requirements are not expected to have a material effect on the
Companys business, capital expenditures, operations or financial position.

Competition

With respect to doors, the Company faces significant competition in North
America. Competitors based in Canada include other manufacturers that
distribute on a national basis as well as smaller regional manufacturers, which
focus on particular products. There is a significantly greater number of
competitors based in the United States. Doors are shipped from Canada to the
United States and vice versa.

In Europe, the Company faces significant competition from a number of
regionally based competitors.

Competition in both North America and Europe is vigorous because firms
manufacture similar products using similar raw materials and manufacturing
methods and there has been excess capacity in the industry.

With respect to molded door facings, the Company is the largest
manufacturer of molded door facings in the world. The rest of the industry is
comprised of one other large, integrated door manufacturer and a number of
smaller regional manufacturers. Competition in the molded door facing business
is based on quality, price, product design, logistics and customer service.
The Company believes that there is a substantial opportunity to leverage the
equity of the Masonite brand as a supplier to door manufacturers around the
world.

Research and Development

The Company estimates that it spent approximately $6.7 million on research
and development during 2002. Research and development activities have resulted
in the development of new products, including PREMWOOD®, a pre-painted and
pre-stained embossed door facing, a post-formed embossed exterior door facing,
PREMCOR, the Artek fiberglass door, the Premvu patio systems and flush
glazed door panels, and the Palazzo Series door.

Trademarks

The Company utilizes a number of trademarks and trade names, including
Masonite and Premdor, in the marketing of its products in various
jurisdictions. The Company considers these trademarks and trade names to be
valuable to the conduct of its business as well as the other trademarks and
trade names mentioned throughout this AIF.

10



---



##### 



Employees

As at December 31, 2002, the Company employed approximately 12,000
employees of which an estimated 3,149 were covered by collective bargaining
agreements. The employees covered by collective bargaining agreements are
situated at the Companys operations as follows:

|                                  |  |              |     |                      |  |  |      | 
|--------------------------------- |  | ------------ | --- | -------------------- |  |  | ---- | 
|                                  |  | Number       |     | Collective Agreement
|Facility                          |  | of Employees |     | Expiration Date     
|                                  |  |              |     |                     
|Canada:                           |  |              |     |                      |  |  |      | 
|Bethierville, Quebec              |  |              | 159 |                      |  |  | 2005 | 
|Lac-Megantic, Quebec              |  |              | 212 |                      |  |  | 2006 | 
|Lac-Megantic, Quebec              |  |              | 260 |                      |  |  | 2007 | 
|Mississauga, Ontario              |  |              | 229 |                      |  |  | 2004 | 
|Mississauga, Ontario              |  |              | 52  |                      |  |  | 2006 | 
|Montreal-Nord, Quebec             |  |              | 42  |                      |  |  | 2004 | 
|New Westminster, British Columbia |  |              | 79  |                      |  |  | 2004 | 
|St. Romuald, Quebec               |  |              | 77  |                      |  |  | 2005 | 
|St-Hyachinthe, Quebec             |  |              | 166 |                      |  |  | 2007 | 
|Vaughan, Ontario                  |  |              | 47  |                      |  |  | 2005 | 
|                                 
|United States:                    |  |              |     |                      |  |  |      | 
|Mobile, Alabama                   |  |              | 59  |                      |  |  | 2007 | 
|Richmond, Indiana                 |  |              | 96  |                      |  |  | 2004 | 
|South Bend, Indiana               |  |              | 71  |                      |  |  | 2004 | 
|Laurel, Mississippi               |  |              | 531 |                      |  |  | 2005 | 
|Toledo, Ohio                      |  |              | 67  |                      |  |  | 2005 | 
|Vandalia, Ohio                    |  |              | 53  |                      |  |  | 2003 | 
|                                 
|Europe:(1)                        |  |              |     |                      |  |  |      | 
|Barnsley, England                 |  |              | 229 |                      |  |  | n/a  | 
|Bridgwater, England               |  |              | 46  |                      |  |  | n/a  | 
|Hedingham, England                |  |              | 73  |                      |  |  | n/a  | 
|Middlesbrough, England            |  |              | 9   |                      |  |  | n/a  | 
|Bordeaux, France                  |  |              | 78  |                      |  |  | n/a  | 
|Douvres, France                   |  |              | 15  |                      |  |  | n/a  | 
|Orange, France                    |  |              | 6   |                      |  |  | n/a  | 
|                                 
|Africa:                           |  |              |     |                      |  |  |      | 
|South Africa                      |  |              | 493 |                      |  |  | 2003 | 



---

Note:



|(1) |  | Employees in many European countries participate in industry-wide unions
with centralized bargaining. Local issues are, however, typically
negotiated separately.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

The collective agreements that expire in 2003 are expected to be renewed
in the normal course of business.

Reference is made to information contained under the headings Business
Risks and Uncertainties of Managements Discussion and Analysis of Financial
Condition and Results of Operations on pages 21 through 28 of the Companys
2002 annual report, which is incorporated herein by reference.

11



---



##### 



Properties

The Companys principal properties are located in the following countries and
comprise a mix of leased and owned properties. The majority of the Companys
manufacturing locations are owned and distribution facilities are principally
leased locations.

|              |  |           |    |                            |  |  |           | 
|------------- |  | --------- | -- | -------------------------- |  |  | --------- | 
|              |  | Locations |    | Approximate square footage
|              |  |           |    |                           
|Canada        |  |           | 30 |                            |  |  | 2,030,000 | 
|Chile         |  |           | 1  |                            |  |  | 215,000   | 
|Costa Rica    |  |           | 3  |                            |  |  | 262,000   | 
|England       |  |           | 8  |                            |  |  | 1,024,000 | 
|France        |  |           | 8  |                            |  |  | 965,000   | 
|Ireland       |  |           | 4  |                            |  |  | 655,000   | 
|Korea         |  |           | 1  |                            |  |  | 75,000    | 
|Mexico        |  |           | 1  |                            |  |  | 157,000   | 
|South Africa  |  |           | 10 |                            |  |  | 880,000   | 
|United States |  |           | 81 |                            |  |  | 9,191,000 | 
|All other     |  |           | 3  |                            |  |  | 3,500     | 

ITEM 5 SELECTED CONSOLIDATED FINANCIAL INFORMATION

Last Five Financial Years

|                                     |  |                                                  |           |         |  |      |           |      |  |      |           |  |  |   |           |  |  |  |         | 
|------------------------------------ |  | ------------------------------------------------ | --------- | ------- |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- |  |  |  | ------- | 
|                                     |  | Year ended December 31                          
|                                     |  | (thousands of dollars, except per share amounts)
|                                     |  |                                                 
|                                     |  | 2002(1)                                          |           | 2001(2) |  | 2000 |           | 1999 |  | 1998
|                                     |  |                                                  |           |         |  |      |           |      |  |     
|Statement of
Operations Data         |  |                                                  |           |         |  |      |           |      |  |      |           |  |  |   |           |  |  |  |         | 
|Sales                                |  | $                                                | 1,619,516 |         |  | $    | 1,421,602 |      |  | $    | 1,291,775 |  |  | $ | 1,139,804 |  |  |  | 952,425 | 
|Net income                           |  |                                                  | 89,543    |         |  |      | 39,460    |      |  |      | 37,571    |  |  |   | 43,783    |  |  |  | 30,792  | 
|Net income per
share(3)              |  |                                                  |           |         |  |      |           |      |  |      |           |  |  |   |           | 
|Basic                                |  |                                                  | 1.70      |         |  |      | 0.84      |      |  |      | 0.86      |  |  |   | 1.02      |  |  |  | 0.80    | 
|Diluted                              |  |                                                  | 1.65      |         |  |      | 0.84      |      |  |      | 0.85      |  |  |   | 1.00      |  |  |  | 0.78    | 
|Balance Sheet Data(at
end of period) |  |                                                  |           |         |  |      |           |      |  |      |           |  |  |   |           |  |  |  |         | 
|Total assets                         |  |                                                  | 1,462,791 |         |  |      | 1,442,286 |      |  |      | 830,506   |  |  |   | 713,548   |  |  |  | 578,157 | 
|Long term debt                       |  |                                                  | 498,000   |         |  |      | 591,419   |      |  |      | 291,787   |  |  |   | 194,114   |  |  |  | 189,156 | 
|Shareholders equity                 |  |                                                  | 552,441   |         |  |      | 405,222   |      |  |      | 319,828   |  |  |   | 305,225   |  |  |  | 262,421 | 



---



|(1) |  | Net income includes net gain on refinancing of $3.0 million.                                       
|--- |  | ---------------------------------------------------------------------------------------------------
|   
|(2) |  | Net income includes debt extinguishment costs of $17.4 million.                                    
|   
|(3) |  | Based on the weighted average number of common shares of the Company
outstanding during the period.

12



---



##### 



Last Eight Quarters

|                           |  |                                                  |         |         |  |              |         |             |  |         |         |         |  |      |         |      |  |   |         |  |  |   |         |  |  |   |         |  |  |   |         | 
|-------------------------- |  | ------------------------------------------------ | ------- | ------- |  | ------------ | ------- | ----------- |  | ------- | ------- | ------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- |  |  | - | ------- |  |  | - | ------- | 
|                           |  | Three months ended                              
|                           |  | (thousands of dollars, except per share amounts)
|                           |  |                                                 
|                           |  | March 31                                         |         | June 30 |  | September 30 |         | December 31
|                           |  |                                                  |         |         |  |              |         |            
|                           |  | 2002                                             |         | 2001    |  | 2002         |         | 2001        |  | 2002(2) |         | 2001(3) |  | 2002 |         | 2001
|                           |  |                                                  |         |         |  |              |         |             |  |         |         |         |  |      |         |     
|Sales                      |  | $                                                | 380,571 |         |  | $            | 320,079 |             |  | $       | 415,457 |         |  | $    | 360,585 |      |  | $ | 427,680 |  |  | $ | 362,933 |  |  | $ | 395,808 |  |  | $ | 378,005 | 
|Net income                 |  |                                                  | 16,112  |         |  |              | 8,660   |             |  |         | 22,046  |         |  |      | 13,098  |      |  |   | 29,176  |  |  |   | 3,849   |  |  |   | 22,209  |  |  |   | 13,853  | 
|Net income per
share(1)(4) |  |                                                  |         |         |  |              |         |             |  |         |         |         |  |      |         |      |  |   |         |  |  |   |         |  |  |   |         |  |  |   |         | 
|Basic                      |  |                                                  | 0.31    |         |  |              | 0.20    |             |  |         | 0.42    |         |  |      | 0.30    |      |  |   | 0.55    |  |  |   | 0.08    |  |  |   | 0.42    |  |  |   | 0.27    | 
|Diluted                    |  |                                                  | 0.30    |         |  |              | 0.20    |             |  |         | 0.41    |         |  |      | 0.30    |      |  |   | 0.53    |  |  |   | 0.08    |  |  |   | 0.40    |  |  |   | 0.27    | 



---



|(1) |  | Based on the weighted average number of common shares of the
Company outstanding during the period.                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Net income for 2002 includes net gain on refinancing of $3.0
million.                                                                                                                                                        
|   
|(3) |  | Net income for 2003 includes debt extinguishment costs of $17.4
million.                                                                                                                                                     
|   
|(4) |  | The sum of basic and diluted earnings per share for the four
quarters ended December 31 may differ from the basic and diluted
earnings per share for the year due to differences in the average
number of shares outstanding.

Dividend Policy

The Company does not currently pay dividends on its common shares. The
payment of dividends is at the discretion of the Board of Directors of the
Company, which considers earnings, capital requirements, the financial
condition of the Company and other relevant factors including restrictions
contained in the Companys banking facilities.

ITEM 6 MANAGEMENTS DISCUSSION AND ANALYSIS

Reference is made to Managements Discussion and Analysis of Financial
Condition and Results of Operations on pages 9 through 28 of the Companys 2002
annual report, which is incorporated herein by reference.

ITEM 7 MARKET FOR SECURITIES

The Companys common shares are listed on The Toronto Stock Exchange and
on the New York Stock Exchange under the symbol MHM.

Share Purchase Rights

The following is a summary of, and is qualified in its entirety by
reference to the Shareholder Rights Plan Agreement (Rights Plan) dated May 2,
1995, as amended and restated as of June 7, 1995 and March 27, 2000, between
the Company and Computershare Trust Company of Canada.

The board of directors of the Company has adopted a shareholder rights
plan to encourage fair treatment of all of the Companys shareholders in the
event of a takeover bid. The Rights Plan results in one Share Right being
issued for each outstanding common share. Under specific circumstances
relating to a takeover bid, each Share Right entitles the holder (other than
the person making the takeover bid) to acquire common shares at a price below
market value. The Share Rights expired at the conclusion of the Companys 2003
annual meeting of shareholders.

13



---



##### 



ITEM 8 DIRECTORS AND OFFICERS

The following table and associated notes set forth as at the date hereof
the name of each director and executive officer of the Company and certain
senior managers of the Company, their municipalities of residence, their
respective principal occupations and, where applicable, their membership on an
executive committee of the Board of Directors. In addition, it indicates the
period during which each director has served as a director of the Company or
its predecessor and when each directors term of office expires. As a group,
based on information provided to the Company by each director, executive
officer, and senior manager listed below, all directors, executive officers and
the senior managers of the Company listed below beneficially owned, directly or
indirectly, or exercised control or direction over 2,182,318 common shares of
the Company as at April 30, 2002, representing approximately 4% of the
outstanding common shares. The terms of office of all of the directors of the
Company expire at the termination of the next annual meeting of shareholders or
until their successor is elected or appointed.

|                                                   |  |                                    |  |                                                                                
|-------------------------------------------------- |  | ---------------------------------- |  | -------------------------------------------------------------------------------
|                                                   |  | Period during which a director of  |  | Present principal occupation (including                                        
|                                                   |  | the Company or its predecessor, as |  | all positions currently held with the                                          
|Name and municipality of residence                 |  | applicable                         |  | Company)(4)                                                                    
|                                                   |  |                                    |  |                                                                                
|HOWARD L. BECK, Q.C.(1)(2)(3)Toronto, Ontario      |  | Since April 24, 1990               |  | Corporate Director                                                             
|                                                  
|JOHN J. BERTON(1)Toronto, Ontario                  |  | Since May 13, 1991                 |  | President, Starlaw Holdings Limited (private investment company)               
|                                                  
|JOHN M. CASSADAY(1)Toronto, Ontario                |  | Since August 3, 1993               |  | President and Chief Executive Officer,
Corus Entertainment Inc.                
|                                                  
|PETER A. CROSSGROVE(2)(3)Toronto, Ontario          |  | Since October 27, 1989             |  | Chairman of Board, Corporate Director                                          
|                                                  
|FREDRIK S. EATON, O.C., O. Ont.(3)Toronto, Ontario |  | Since August 10, 1994              |  | Chairman, White Raven Capital Corp.
(holding company)                          
|                                                  
|ALAN R. McFARLAND(2)New York, New York             |  | Since March 24, 1994               |  | Managing Member, McFarland Dewey & Co.,
LLC (investment bank)                  
|                                                  
|PHILIP S. ORSINOToronto, Ontario                   |  | Since October 27, 1989             |  | President and Chief Executive Officer                                          
|                                                  
|JOSEPH L. ROTMAN(1)Toronto, Ontario                |  | Since May 27, 1994                 |  | Chairman and CEO, Roy-L Capital
Corporation (private family investment
company)
|                                                  
|SAUL M. SPEARS(3)Toronto, Ontario                  |  | Since December 17, 1979            |  | Corporate Director                                                             
|                                                  
|PAUL A. BERNARDSToronto, Ontario                   |  |                                    |  | Vice President and Corporate Controller                                        
|                                                  
|BRENDA L. BROGDEN(5)Terra Cotta, Ontario           |  |                                    |  | Director, Administration                                                       
|                                                  
|WILFRED A. CURTISToronto, Ontario                  |  |                                    |  | Vice President, Risk Management                                                
|                                                  
|JAMES U. MORRISONTampa, Florida                    |  |                                    |  | Executive Vice President                                                       
|                                                  
|LAWRENCE P. REPARMississauga, Ontario              |  |                                    |  | Executive Vice President and Managing
Director of Sales & Marketing            
|                                                  
|LEO E. SERIOOakville, Ontario                      |  |                                    |  | Vice President, Sourcing and Procurement                                       

14



---



##### 



|                                              |  |                                    |  |                                                                  
|--------------------------------------------- |  | ---------------------------------- |  | -----------------------------------------------------------------
|                                              |  | Period during which a director of  |  | Present principal occupation (including                          
|                                              |  | the Company or its predecessor, as |  | all positions currently held with the                            
|Name and municipality of residence            |  | applicable                         |  | Company)(4)                                                      
|                                              |  |                                    |  |                                                                  
|ROBERT V. TUBBESINGToronto, Ontario           |  |                                    |  | Vice President and Chief Financial Officer                       
|                                             
|HARLEY ULSTERToronto, Ontario                 |  |                                    |  | Executive Vice President, General Counsel
and Corporate Secretary
|                                             
|CHRISTOHER A. VIROSTEK(5)Mississauga, Ontario |  |                                    |  | Controller, Financial Reporting                                  



---



|(1) |  | Member of the Audit Committee.                                                                                                                                                                                                                                                                                                                                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Member of the Human Resource and Compensation Committee.                                                                                                                                                                                                                                                                                                      
|   
|(3) |  | Member of the Nominating and Corporate Governance Committee.                                                                                                                                                                                                                                                                                                  
|   
|(4) |  | Information provided with respect to the principal occupation of
each director is based on information furnished to the Company by such
director. All of the above directors and executive officers have held
their present principal occupations or executive positions with the
same or associated firms for the past five years, except as indicated
below.
|   
|(5) |  | Senior manager.                                                                                                                                                                                                                                                                                                                                               

|                        |  |                                                                                                                               
|----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|Paul A. Bernards        |  | Prior to May 2000, Corporate Controller;                                                                                      
|Brenda L. Brogden       |  | Prior to May 2003, Director of Corporate Accounting;                                                                          
|James U. Morrison       |  | Prior to September 2001, Executive Vice President
and General Manager, Building and Industrial
Products, Masonite Corporation;
|Christopher A. Virostek |  | Prior to May 2003, Financial Controller and prior
to March 2002, Audit manager in public accounting
practice                  

One director of the Company, Mr. J.L. Rotman, has been a director of other
companies, which during the past ten years have been the subject of a cease
trade or similar order while Mr. Rotman was acting as a director of such
companies. Livent Inc. was the subject of a cease trade order issued by the
Ontario Securities Commission on August 7, 1998 following the discovery of
accounting irregularities. In November 1998 Livent Inc. filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code and filed for protection
under the Companies Creditors Arrangement Act in Canada. The cease trade order
was revoked effective November 20, 1998 and Mr. Rotman resigned as a director
of Livent Inc. on September 29, 1999. Paragon Entertainment Corporation made a
filing under the Companies Creditors Arrangement Act in April 1998; Mr. Rotman
resigned as a director of Paragon in June 1998.

ITEM 9 ADDITIONAL INFORMATION

Additional information, including directors and officers remuneration
and indebtedness, principal holders of the Companys securities, options to
purchase securities and interests of insiders in material transactions, where
applicable, is contained in the Companys Management Information Circular dated
March 21, 2003 with respect to the annual and special meeting of shareholders
held on May 2, 2003. Additional financial information is provided in the
Companys consolidated financial statements for the year ended December 31,
2002, together with the accompanying report of the auditor.

The Company will provide to any person, upon request to Investor
Relations, 1600 Britannia Road East, Mississauga, Ontario L4W 1J2, any of the
following documents:



| | (a) |  | when the securities of the Company are in the course of
a distribution pursuant to a short form prospectus or a
preliminary short form prospectus has been filed in respect of a
distribution of its securities:
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15



---



##### 





| | (i)   |  | one copy of this AIF, together with one copy of
any document, or the pertinent pages of any document,
incorporated herein by reference;                                                                                                                                                                                
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | one copy of the Companys consolidated financial
statements for the most recently completed financial year,
together with the accompanying report of the auditor and one
copy of any interim financial statements of the Company
subsequent to the financial statements for its most recently
completed financial year;
|
| | (iii) |  | one copy of the Companys Management Information
Circular with respect to its most recent annual meeting of
shareholders; and                                                                                                                                                                                          
|
| | (iv)  |  | one copy of any other document that is
incorporated by reference into the preliminary short form
prospectus or the short form prospectus and is not required to
be provided under (i) to (iii) above; or                                                                                                               



| | (b) |  | at any other time, one copy of any other document
referred to in (a)(i), (ii) and (iii) above, provided the Company
may require the payment of a reasonable charge if the request is
made by a person who is not a security holder of the Company.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Alternatively, each of these documents may be obtained free of charge from
the Companys web site at www.masonite.com.

Forward-Looking Statements

This Annual Information Form contains a number of forward-looking
statements. All statements, other than statements of historical fact,
included in this Annual Information Form that address activities, events or
developments that the Company or its management expects or anticipates will or
may occur in the future are forward-looking statements. They are based on
certain assumptions and analyses made by the Company and its management
considering its experience and perceptions of historical trends, current
conditions and expected future developments, as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the expectations and predictions of the
Company and its management is subject to a number of risks and uncertainties,
including: general economic, market and business conditions; levels of
construction and renovation activity; competition; financing risks; ability to
manage expanding operations; retention of key management personnel;
environmental and other government regulation; and other factors.

16



---



##### 



DOCUMENT 2





---



##### 



CONSOLIDATED STATEMENTS OF INCOME

Years ended December 31, 2002 and 2001 (In thousands of United States dollars, except earnings per share)

|                                                        |         |   |           |      |      |   |           |      | 
|------------------------------------------------------- | ------- | - | --------- | ---- | ---- | - | --------- | ---- | 
|                                                        |         |   | 2002      |      | 2001
|                                                        |         |   |           |      |     
|Sales                                                   |         | $ | 1,619,516 |      |      | $ | 1,421,602 |     
|Cost of sales                                           |         |   | 1,254,208 |      |      |   | 1,154,927 |     
|                                                        |         |   |           |      |      |   |           |     
|                                                        |         |   | 365,308   |      |      |   | 266,675   |     
|Selling, general and administration expenses            |         |   | 155,072   |      |      |   | 123,218   |     
|                                                        |         |   |           |      |      |   |           |     
|Income before the undernoted                            |         |   | 210,236   |      |      |   | 143,457   |     
|Depreciation and amortization                           |         |   | 44,855    |      |      |   | 35,403    |     
|Interest                                                |         |   | 43,767    |      |      |   | 32,456    |     
|(Gain) loss on refinancing, net (note 7(a))             |         |   | (2,990    | )    |      |   | 17,370    |     
|Other (income) expense                                  |         |   | (557      | )    |      |   | 517       |     
|                                                        |         |   |           |      |      |   |           |     
|Income before income taxes
and non-controlling interest |         |   | 125,161   |      |      |   | 57,711    |     
|Income taxes (note 13)                                  |         |   | 27,951    |      |      |   | 12,933    |     
|Non-controlling interest                                |         |   | 7,667     |      |      |   | 5,318     |     
|                                                        |         |   |           |      |      |   |           |     
|Net income                                              |         | $ | 89,543    |      |      | $ | 39,460    |     
|                                                        |         |   |           |      |      |   |           |     
|Earnings per share (note 15):                           |         |   |           |      |      |   |           |     
|                                                        | Basic   |   | $         | 1.70 |      |   | $         | 0.84 | 
|                                                        | Diluted |   | $         | 1.65 |      |   | $         | 0.84 | 
|                                                        |         |   |           |      |      |   |           |     

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

Years ended December 31, 2002 and 2001 (In thousands of United States dollars)

|                                     |  |      |         |      |  |   |         | 
|------------------------------------ |  | ---- | ------- | ---- |  | - | ------- | 
|                                     |  | 2002 |         | 2001
|                                     |  |      |         |     
|Retained earnings, beginning of year |  | $    | 206,311 |      |  | $ | 166,851 | 
|Net income                           |  |      | 89,543  |      |  |   | 39,460  | 
|                                     |  |      |         |      |  |   |         | 
|Retained earnings, end of year       |  | $    | 295,854 |      |  | $ | 206,311 | 
|                                     |  |      |         |      |  |   |         | 

See accompanying notes to consolidated financial statements.

29



---



##### 



CONSOLIDATED BALANCE SHEETS

December 31, 2002 and 2001 (In thousands of United States dollars)

|                                       |                                       |   |           |         |      |   |           |         | 
|-------------------------------------- | ------------------------------------- | - | --------- | ------- | ---- | - | --------- | ------- | 
|                                       |                                       |   | 2002      |         | 2001
|                                       |                                       |   |           |         |     
|Assets                                 |                                       |   |           |         |      |   |           |        
|Current assets:                        |                                       |   |           |         |      |   |           |        
|                                       | Cash                                  |   | $         | 47,644  |      |   | $         | 40,611  | 
|                                       | Accounts receivable                   |   |           | 197,927 |      |   |           | 201,765 | 
|                                       | Inventories (note 3)                  |   |           | 293,878 |      |   |           | 256,689 | 
|                                       | Income taxes recoverable              |   |           |        |      |   |           | 2,138   | 
|                                       | Prepaid expenses                      |   |           | 11,289  |      |   |           | 12,055  | 
|                                       | Current future income taxes (note 13) |   |           | 32,768  |      |   |           | 20,479  | 
|                                       | Assets held for sale (note 2)         |   |           |        |      |   |           | 94,305  | 
|                                       |                                       |   |           |         |      |   |           |         | 
|                                       |                                       |   | 583,506   |         |      |   | 628,042   |        
|Property, plant and equipment(note 4)  |                                       |   | 711,601   |         |      |   | 614,216   |        
|Goodwill                               |                                       |   | 124,001   |         |      |   | 117,407   |        
|Other assets(note 5)                   |                                       |   | 36,569    |         |      |   | 79,815    |        
|Long-term future income taxes(note 13) |                                       |   | 7,114     |         |      |   | 2,806     |        
|                                       |                                       |   |           |         |      |   |           |         | 
|                                       |                                       | $ | 1,462,791 |         |      | $ | 1,442,286 |        
|                                       |                                       |   |           |         |      |   |           |         | 

30



---



##### 



|                                       |                                               |   |           |         |      |   |           |         |  
|-------------------------------------- | --------------------------------------------- | - | --------- | ------- | ---- | - | --------- | ------- | -
|                                       |                                               |   | 2002      |         | 2001
|                                       |                                               |   |           |         |     
|Liabilities and Shareholders Equity   |                                               |   |           |         |      |   |           |        
|Current liabilities:                   |                                               |   |           |         |      |   |           |        
|                                       | Bank indebtedness (note 6)                    |   | $         | 3,830   |      |   | $         | 105,377 |  
|                                       | Accounts payable and accrued liabilities      |   |           | 241,292 |      |   |           | 217,814 |  
|                                       | Income taxes payable                          |   |           | 4,671   |      |   |           |        |  
|                                       | Current portion of long-term debt (note 7(a)) |   |           | 35,582  |      |   |           | 16,177  |  
|                                       |                                               |   |           |         |      |   |           |        
|                                       |                                               |   | 285,375   |         |      |   | 339,368   |        
|Long-term debt(note 7(a))              |                                               |   | 498,000   |         |      |   | 473,703   |        
|Subordinated long-term debt(note 7(b)) |                                               |   |          |         |      |   | 117,716   |        
|Long-term future income taxes(note 13) |                                               |   | 98,744    |         |      |   | 78,152    |        
|Non-controlling interest               |                                               |   | 28,231    |         |      |   | 28,125    |        
|Shareholders equity:                  |                                               |   |           |         |      |   |           |        
|                                       | Share capital (note 8)                        |   |           | 257,325 |      |   |           | 236,262 |  
|                                       | Retained earnings                             |   |           | 295,854 |      |   |           | 206,311 |  
|                                       | Cumulative translation
adjustments (note 10)  |   |           | (738    | )    |   |           | (37,351 | )
|                                       |                                               |   |           |         |      |   |           |         |  
|                                       |                                               |   | 552,441   |         |      |   | 405,222   |        
|Commitments (note 11)                  |                                               |   |           |         |      |   |           |        
|Contingencies (note 12)                |                                               |   |           |         |      |   |           |        
|                                       |                                               |   |           |         |      |   |           |         |  
|                                       |                                               | $ | 1,462,791 |         |      | $ | 1,442,286 |        
|                                       |                                               |   |           |         |      |   |           |        

See accompanying notes to consolidated financial statements.

On behalf of the Board:

|                             |  |                          
|---------------------------- |  | -------------------------
|/s/ Peter A. Crossgrove      |  | /s/ Philip S. Orsino     
|                             |  |                          
|Peter A. Crossgrove
Director |  | Philip S. Orsino
Director

31



---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2002 and 2001. (In thousands of United States dollars)

|                                                   |                                                           |   |          |         |      |   |          |         |  
|-------------------------------------------------- | --------------------------------------------------------- | - | -------- | ------- | ---- | - | -------- | ------- | -
|                                                   |                                                           |   | 2002     |         | 2001
|                                                   |                                                           |   |          |         |     
|Cash provided by (used in):                        |                                                           |   |          |         |      |   |          |        
|Operating activities:                              |                                                           |   |          |         |      |   |          |        
|Net income                                         |                                                           | $ | 89,543   |         |      | $ | 39,460   |        
|Items not involving cash:                          |                                                           |   |          |         |      |   |          |        
|                                                   | Depreciation and amortization                             |   |          | 44,855  |      |   |          | 35,403  |  
|                                                   | Accretion of interest (note 7(b))                         |   |          | 7,840   |      |   |          | 4,255   |  
|                                                   | Gain on refinancing, net                                  |   |          | (2,990  | )    |   |          |        |  
|                                                   | (Gain) loss on disposal of property,
plant, and equipment |   |          | (458    | )    |   |          | 166     |  
|                                                   | Equity from investments, net                              |   |          | (557    | )    |   |          | 517     |  
|                                                   | Future income taxes                                       |   |          | 12,044  |      |   |          | 12,291  |  
|                                                   | Non-controlling interest                                  |   |          | 7,667   |      |   |          | 5,318   |  
|                                                   |                                                           |   |          |         |      |   |          |        
|                                                   |                                                           |   | 157,944  |         |      |   | 97,410   |        
|                                                   |                                                           |   |          |         |      |   |          |        
|Cash provided by (reinvested in) working capital:  |                                                           |   |          |         |      |   |          |        
|                                                   | Accounts receivable                                       |   |          | 11,538  |      |   |          | (2,745  | )
|                                                   | Inventories                                               |   |          | (30,967 | )    |   |          | 10,406  |  
|                                                   | Income taxes                                              |   |          | 7,551   |      |   |          | (20,921 | )
|                                                   | Prepaid expenses                                          |   |          | 877     |      |   |          | (2,952  | )
|                                                   | Accounts payable and accrued liabilities                  |   |          | 5,397   |      |   |          | (6,874  | )
|                                                   |                                                           |   |          |         |      |   |          |        
|                                                   |                                                           |   | 152,340  |         |      |   | 74,324   |        
|                                                   |                                                           |   |          |         |      |   |          |        
|Financing activities:                              |                                                           |   |          |         |      |   |          |        
|Increase (decrease) in bank and other
indebtedness |                                                           |   | (101,547 | )       |      |   | 87,890   |        
|Proceeds from issuance of common shares            |                                                           |   | 10,082   |         |      |   | 63,700   |        
|Proceeds from issuance of long-term debt           |                                                           |   | 550,000  |         |      |   | 485,000  |        
|Repayment of long-term debt                        |                                                           |   | (636,462 | )       |      |   | (300,381 | )      
|                                                   |                                                           |   |          |         |      |   |          |        
|                                                   |                                                           |   | (177,927 | )       |      |   | 336,209  |        
|                                                   |                                                           |   |          |         |      |   |          |        
|Investing activities:                              |                                                           |   |          |         |      |   |          |        
|Proceeds from sale of assets                       |                                                           |   | 103,095  |         |      |   | 572      |        
|Additions to property, plant and equipment         |                                                           |   | (43,503  | )       |      |   | (30,538  | )      
|Acquisitions (note 2)                              |                                                           |   | (15,991  | )       |      |   | (313,874 | )      
|Other investing activities                         |                                                           |   | (21,924  | )       |      |   | (23,399  | )      
|                                                   |                                                           |   |          |         |      |   |          |        
|                                                   |                                                           |   | 21,677   |         |      |   | (367,239 | )      
|                                                   |                                                           |   |          |         |      |   |          |        
|Net foreign currency translation adjustment        |                                                           |   | 10,943   |         |      |   | (6,561   | )      
|                                                   |                                                           |   |          |         |      |   |          |        
|Increase in cash                                   |                                                           |   | 7,033    |         |      |   | 36,733   |        
|Cash, beginning of year                            |                                                           |   | 40,611   |         |      |   | 3,878    |        
|                                                   |                                                           |   |          |         |      |   |          |        
|Cash, end of year                                  |                                                           | $ | 47,644   |         |      | $ | 40,611   |        
|                                                   |                                                           |   |          |         |      |   |          |        

Supplemental cash flow information(note 14)

See accompanying notes to consolidated financial statements.

32



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)

On January 1, 2002, Premdor Inc. changed its name to Masonite International
Corporation (the Company). Its primary business activity is the manufacture
and sale of doors, door components and door entry systems.

1. Significant accounting policies:

These consolidated financial statements are prepared in
accordance with Canadian generally accepted accounting
principles, which differ in some respects from United
States generally accepted accounting principles, as
disclosed in note 17. A summary of the significant
accounting principles adopted by the Company is as
follows:



|(a) |  | Principles of consolidation:                                                                                                                                                                                                                                                                                                                  
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The consolidated financial statements include the
accounts of the Company and its subsidiaries. Significant
intercompany accounts and transactions have been
eliminated.                                                                                                                                                                      
|   
|(b) |  | Cash:                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | Cash includes cash equivalents which are short-term
highly liquid investments with original maturities of
three months or less.                                                                                                                                                                                                               
|   
|(c) |  | Inventories:                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Raw materials are valued at the lower of cost and
replacement cost. Finished goods are valued at the lower
of cost and net realizable value. Cost is determined on a
first-in, first-out basis.                                                                                                                                               
|   
|(d) |  | Investments:                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | Long-term investments over which the Company has
significant influence are recorded on the equity basis. The
investments include the Companys share of undistributed
earnings since acquisition and are reduced by the Companys
share of dividends paid. Equity income is included in other
income on the consolidated statements of income.
|   
|(e) |  | Property, plant and equipment:                                                                                                                                                                                                                                                                                                                
|   
|    |  | Property, plant and equipment are stated at cost.
Depreciation is provided on the carrying values of
buildings and equipment by the straight-line method based
on the estimated useful lives as follows:                                                                                                                                      

|                        |  |               |  | 
|----------------------- |  | ------------- |  | 
|Buildings               |  | 20 - 40 years
|Machinery and equipment |  | 5 - 25 years 



| |  | Improvements and extraordinary repairs that extend the life
of an asset are capitalized; other repairs and maintenance
are expensed. When assets are retired or otherwise disposed
of, their carrying values and accumulated depreciation are
removed from the accounts.                                                                                                                                                                                                                                                                                                                    
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Effective January 1, 2002, the Company adopted on a
prospective basis new guidance relating to long-lived asset
impairment measurement and standards for the recognition,
measurement and disclosure of the impairment of long-lived
assets held and used. The new standard requires that an
impairment loss be recognized when the carrying amount of
an asset to be held and used exceeds the sum of the
undiscounted cash flows expected from its use and disposal;
the impairment recognized is measured as the amount by
which the carrying amount of the asset exceeds its fair
value.

33



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)

1. Significant accounting policies: (continued)



|    |  | Specified criteria must be met for classifying an asset as
held-for-sale. In addition, assets classified as
held-for-sale which must be measured at the lower of their
carrying amounts or fair value, less costs to sell. The
adoption of this new guidance had no impact on the Company
in fiscal 2002, other than certain reclassifications of
assets held for sale to property, plant and equipment (note
2).                                                                                                                                                                                                                                                                                        
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(f) |  | Goodwill:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | The Company uses the purchase method of accounting for all
business combinations. Goodwill acquired in business
combinations completed after June 30, 2001 is not
amortized. Prior to that date, goodwill was amortized to
income over a period of 7 to 40 years. The Company
evaluates all business combinations for intangible assets
that should be recognized and reported apart from
goodwill. Shares issued in business combinations are
measured using an average share price for a reasonable
period before and after the date the terms of the
acquisition are agreed and announced.                                                                                                            
|   
|    |  | Effective January 1, 2002, the Company has applied the
above standards to all business combinations completed
prior to June 30, 2001. No adjustment to the carrying value
of goodwill was required as a result of a transitional
goodwill impairment test conducted January 1, 2002 and no
reclassification from goodwill to intangibles was required
on that date.                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The Company evaluates the recoverability of the carrying
value of goodwill annually or when changes in circumstances
indicate the carrying amount may not be recoverable.
Impairment is tested at the reporting unit level by
comparing the reporting units carrying amount to its fair
value. Fair values of reporting units are estimated using an
income approach. If the carrying amount exceeds fair value,
there is impairment in goodwill. Any impairment in goodwill
is measured by allocating the fair value of the reporting
unit in a manner similar to a purchase price allocation and
comparing the notional goodwill from the fair value
allocation to the carrying value of the goodwill.
|   
|    |  | If this new standard had been applied January 1, 2001 the
elimination of the amortization of goodwill would have
increased net income by $0.07 per share, basic and diluted
to $42,656 ($0.91 per share, basic and diluted).
Accumulated amortization of goodwill as of December 31,
2001 was $12,382.                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | The Company has completed the annual impairment test for
its reporting units and has determined that there is no
impairment of goodwill.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

34



---



##### 





|(g) |  | Deferred Charges:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Deferred charges primarily represent deferred financing
costs and are amortized over the term of the loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(h) |  | Future income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | The Company uses the asset and liability method of
accounting for income taxes. Under the asset and liability
method, future tax assets and liabilities are recognized
for the future tax consequences attributable to differences
between the financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases. Future tax assets and liabilities are measured using
enacted or substantively enacted tax rates expected to
apply to taxable income in the years in which those
temporary differences are expected to be recovered or
settled. The effect on future tax assets and liabilities of
a change in tax rates is recognized in income in the period
that includes the date of enactment or substantive
enactment.
|   
|(i) |  | Employee future benefits:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | With the acquisition in 2001 described in note 2, the
Company assumed a defined benefit pension plan and other
employee post-retirement benefits covering certain
employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Earnings are charged with the cost of benefits earned by
employees as services are rendered. The cost reflects
managements best estimates of the pension plans expected
investment yields, wage and salary escalation, mortality of
members, terminations and the ages at which members will
retire. The excess of the net actuarial gain (loss) over 10%
of the greater of the benefit obligation and the fair value
of plan assets is amortized over the average remaining
service lives of the members. The average remaining service
life of the members is 13 years for the pension plan and 14
years for the other employee post retirement benefits plan.                                                                                                
|   
|    |  | Assets are valued at fair value for the purpose of
calculating the expected return on plan assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | The difference between pension cost, determined on an
accounting basis, and the funding of pension costs, as
required by regulatory authorities, gives rise to a timing
difference in the recognition of pension expense, which
appears on the consolidated balance sheets as deferred
pension asset. (Note 5)                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | The Company is responsible for continuing to provide health
care and life insurance benefits for certain retired
employees. The amount of the accumulated post-retirement
benefits obligation has been actuarially determined and
benefit costs are charged against the obligation as
incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(j) |  | Earnings per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | Basic earnings per share are computed by dividing net
earnings by the weighted average number of shares
outstanding during the reporting period. Diluted earnings
per share are computed similar to basic earnings per share,
except that the weighted average number of shares
outstanding are increased to include additional shares from
the assumed exercise of stock options, if dilutive. The
number of additional shares are calculated by assuming that
outstanding stock options were exercised and that the
proceeds from such exercises were used to acquire shares of
common stock at the average market price during the
reporting period.                                                                                                           

35



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|1.  |  | Significant accounting policies: (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(k) |  | Currency translation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | The accounts of certain self-sustaining foreign operations
of the Company are maintained in functional currencies other
than the U.S. dollar. Assets and liabilities have been
translated into U.S. dollars at exchange rates prevailing at
the end of the year and results of operations at the average
exchange rates for the year. Unrealized exchange gains and
losses arising on the translation of the financial
statements of the Companys non-U.S dollar functional
currency operations are accumulated in the cumulative
translation adjustments account in shareholders equity.                                                                                                                                                         
|   
|(l) |  | Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the
dates of the financial statements and the reported amounts
of revenue and expenses during the reporting period.
Significant areas requiring the use of management estimates
include the determination of fair value of financial
instruments, the fair value of goodwill and the useful
lives of long-lived assets as well as determination of
impairment thereon, and recoverability of future income tax
assets. Actual results could differ from those estimates.
|   
|(m) |  | Financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | The estimated fair value of a financial instrument is the
amount at which the instrument could be exchanged in a
current transaction between willing parties, other than a
forced or liquidation sale. These estimates, although based
on the relevant market information about the financial
instrument, are subjective in nature and involve
uncertainties and matters of significant judgment and,
therefore, cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.                                                                                                                                                                                                                              



| | (i) |  | Fair values:                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The carrying values of cash and cash equivalents,
accounts receivable, bank indebtedness and accounts
payable and accrued liabilities approximate fair values
because of the near-term nature of these instruments.                                                                                                                                                                                                                                            
|
| |     |  | The carrying values of interest-bearing amounts,
including long-term debt, approximate fair values since
the interest rates are based on market rates of interest
for similar debt securities.                                                                                                                                                                                                                                                                 
|
| |     |  | Other financial instruments held or issued by the Company
include other current and long-term receivables. The
Company does not have plans to sell these financial
instruments to third parties and will realize or settle
them in the ordinary course of business. No quoted market
prices exist for these instruments because they are not
traded in an active and liquid market. Accordingly, the
fair values of these amounts are not readily
determinable.

36



---



##### 





| | (ii)  |  | Credit risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |       |  | Credit risk arises from the potential default of a
customer in meeting its financial obligations to the
Company. The Company has credit evaluation, approval and
monitoring processes, including credit insurance,
intended to mitigate potential credit risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |       |  | Credit risk exists in the Companys interest rate swap
agreement in the event of non-performance by the
counterparty; however, this risk is minimized as each
contract is with a major financial institution and
represents an exchange between the same parties, allowing
for an offset in the event of non-performance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (iii) |  | Financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |       |  | The Company utilizes certain financial instruments,
principally interest rate swap contracts and forward
exchange contracts. Interest rate swap contracts are used
to reduce the impact of fluctuating interest rates on the
Companys long-term debt. These swap agreements require
the periodic exchange of payments without the exchange of
the notional principal amount on which the payments are
based. Payments and receipts under interest rate swap
contracts are recognized as adjustments to interest
expense on long-term debt. Forward foreign exchange
contracts are used to hedge anticipated sales and
purchases in foreign currencies. Gains and losses on
forward foreign exchange contracts are recognized in
revenues and expenses in the same period as the foreign
currency revenues and expenses to which they relate. At
year-end, the unrealized gain or loss associated with
these financial instruments has not been reflected in the
consolidated financial statements. The Companys policy is
not to utilize financial instruments for trading or
speculative purposes. In the event that a hedged item is
sold or cancelled prior to the termination of the related
hedging item, any unrealized gain or loss on the hedging
item is immediately recognized in income. In the event
that a hedging item is sold or cancelled, any unrealized
gain or loss on the hedging item is deferred and amortized
over the original contractual life of the hedging item.
|
| |       |  | The Companys forward exchange contracts do not subject
the Company to risk from exchange rate movements because
gains and losses on such contracts offset losses and
gains on transactions being hedged. The Company does not
require collateral or other security to support financial
instruments with credit risk. At December 31, 2002,
unrealized gains totalled $1,501 (2001  $nil) and
unrealized losses totalled $489 (2001  $2,190). At year
end, the Company had forward contracts in place to sell
UK pound sterling in the amount of £4,800 in exchange for
U.S. dollars over a period of 12 months at an average
exchange rate of $1.5271; £2,400 in exchange for Canadian
dollars over a period of 12 months at an average exchange
rate of $2.437; and £9,600 in exchange for euros over a
period of 6 months at an average exchange rate of 1.5503. In addition, the Company had forward contracts
in place to sell U.S. dollars in exchange for Canadian
dollars in the amount of U.S. $72,414 over a period of 16
months at an average exchange rate of $1.5765.                                                                                                                                                                                                                                                                                                                                                                                                        

37



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|1.  |  | Significant accounting policies: (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(n) |  | Stock-based compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | Effective January 1, 2002, the Company accounts for all
stock-based payments to non-employees, and employee awards
that are direct awards of stock, call for settlement in cash
or other assets, or are stock appreciation rights that call
for settlement by the issuance of equity instruments,
granted on or after January 1, 2002, using a fair value
based method. The Company had no such instruments issued or
outstanding during the year. The Company accounts for stock
options that are settled by the issuance of common shares as
capital transactions and no compensation cost is recorded.
Consideration paid by employees on the exercise of stock
options is recorded as share capital. The Company discloses
the pro forma effect of accounting for these awards granted
after January 1, 2002 under the fair value method. Proforma
compensation cost under the fair value method is amortized
over the vesting period.                                             
|   
|(o) |  | Revenue recognition:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | The Company recognizes revenue when the earnings process is
complete, which occurs upon title transfer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(p) |  | Recently issued accounting standards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | In November 2001, the CICA issued Accounting Guideline 13,
Hedging Relationships (AcG 13). AcG 13 establishes new
criteria for hedge accounting and will apply to all hedging
relationships in effect for fiscal years beginning on or
after July 1, 2003. By January 1, 2004, the Company will
reassess all hedging relationships to determine whether the
criteria are met or not and will apply the new guidance on a
prospective basis. To qualify for hedge accounting, the
hedging relationship must be appropriately documented at the
inception of the hedge and there must be reasonable
assurance, both at the inception and throughout the term of
the hedge, that the hedging relationship will be effective.
Effectiveness requires a high degree of correlation of
changes in fair values or cash flows between the hedged item
and the hedge. The Company intends that all current hedging
relationships will be documented in order to meet the new
hedging criteria.
|   
|    |  | In February 2003, the CICA issued Accounting Guideline 14,
Disclosure of Guarantees (AcG 14). AcG 14 requires that a
guarantor disclose significant information about certain
types of guarantees. Disclosures include the nature of the
guarantee, the approximate term of the guarantee, how the
guarantee arose, the events or circumstances that would
require the guarantor to perform under the guarantee, the
maximum potential future payments under the guarantee, the
carrying amount of the related liability, and information
about recourse or collateral. The Company does not
anticipate that this new guideline will have a significant
impact on its accounting or disclosure.                                                                                                                                                                                                                                                                                      

38



---



##### 





|2. |  | Acquisitions:
|-- |  | -------------

The following is a summary of acquisitions in 2002 and 2001:

|                                                  |                                         |   |         |        |      |   |         |         | 
|------------------------------------------------- | --------------------------------------- | - | ------- | ------ | ---- | - | ------- | ------- | 
|                                                  |                                         |   | 2002    |        | 2001
|                                                  |                                         |   |         |        |     
|Current assets, less cash of $677
(2001 - $2,129) |                                         | $ | 8,894   |        |      | $ | 55,466  |        
|Property, plant and equipment                     |                                         |   | 53,274  |        |      |   | 302,360 |        
|Other assets                                      |                                         |   | 479     |        |      |   | 5,084   |        
|Current assets held for sale                      |                                         |   |        |        |      |   | 94,305  |        
|Long-term assets held for sale                    |                                         |   |        |        |      |   | 23,237  |        
|Goodwill                                          |                                         |   | 2,683   |        |      |   | 78,322  |        
|Current liabilities assumed                       |                                         |   | (3,706  | )      |      |   | (82,750 | )      
|Long-term debt assumed                            |                                         |   | (25,040 | )      |      |   |        |        
|Future income taxes                               |                                         |   | 8,581   |        |      |   | (44,912 | )      
|                                                  |                                         |   |         |        |      |   |         |        
|                                                  |                                         |   | 45,165  |        |      |   | 431,112 |        
|Non-controlling interest                          |                                         |   | 8,681   |        |      |   | (3,777  | )      
|Cost of original
equity investment                |                                         |   | (27,995 | )      |      |   |        |        
|                                                  |                                         |   |         |        |      |   |         |        
|                                                  |                                         | $ | 25,851  |        |      | $ | 427,335 |        
|                                                  |                                         |   |         |        |      |   |         |        
|Consideration:                                    |                                         |   |         |        |      |   |         |        
|                                                  | Cash                                    |   | $       | 15,991 |      |   | $       | 313,874 | 
|                                                  | Common shares                           |   |         | 9,060  |      |   |         |        | 
|                                                  | Note payable                            |   |         | 800    |      |   |         |        | 
|                                                  | Subordinated long-term debt (note 7(b)) |   |         |       |      |   |         | 113,461 | 
|                                                  |                                         |   |         |        |      |   |         |        
|                                                  |                                         | $ | 25,851  |        |      | $ | 427,335 |        
|                                                  |                                         |   |         |        |      |   |         |        

During 2002, the Company purchased the remaining interest in
four less than wholly owned companies and acquired the
shares of one company. Consideration for these acquisitions
was paid in a combination of cash, common shares of the
Company and a note payable. Companies previously accounted
for on the equity basis were consolidated following the date
of the acquisition of the remaining interest.

The note payable issued as consideration bears interest at
prime and is due July 31, 2003.

On August 31, 2001, the Company purchased the shares and
certain assets of the Masonite Corporation (Masonite)
business, a manufacturer of composite wood products, from
International Paper Company for an aggregate purchase price of
$427,335. The operating results of the Masonite acquisition
have been included in the Companys consolidated financial
statements since September 1, 2001.

As part of negotiating the acquisition, the Company reached
an agreement with the Department of Justice in the United
States to divest of the Masonite Towanda facility (Towanda)
located in Towanda, Pennsylvania, which manufactures
composite wood products. The Towanda location was carried as
an asset held for sale until the divestiture in March 2002.
The estimated realizable value of the assets and the net
earnings attributable to Towanda were recorded as part of the
Masonite purchase.

39



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|2. |  | Acquisitions: (continued)
|-- |  | -------------------------

In 2002, items previously classified as assets held for sale
totalling $22,948, were reclassified to property, plant and
equipment at their carrying value net of related depreciation.
One facility will be retained and the company intends to
invest capital to use it. The Company is continuing to pursue
a strategy to sell one other facility but is uncertain as to
the closing date.

The total goodwill of $2,683, (2001  78,322), is related
to the North American segment and is not expected to be
deductible for income tax purposes. None of this goodwill
was amortized.



|3. |  | Inventories:
|-- |  | ------------

|               |  |      |         |      |  |   |         | 
|-------------- |  | ---- | ------- | ---- |  | - | ------- | 
|               |  | 2002 |         | 2001
|               |  |      |         |     
|Raw materials  |  | $    | 176,940 |      |  | $ | 153,159 | 
|Finished goods |  |      | 116,938 |      |  |   | 103,530 | 
|               |  |      |         |      |  |   |         | 
|               |  | $    | 293,878 |      |  | $ | 256,689 | 
|               |  |      |         |      |  |   |         | 



|4. |  | Property, plant and equipment:
|-- |  | ------------------------------

|                        |  |      |         |              |  |             |         |          |  |   |         | 
|----------------------- |  | ---- | ------- | ------------ |  | ----------- | ------- | -------- |  | - | ------- | 
|                        |  | 2002
|                        |  |     
|                        |  |      |         |              |  | Accumulated |         | Net Book
|                        |  | Cost |         | Depreciation |  | Value      
|                        |  |      |         |              |  |            
|Land                    |  | $    | 46,200  |              |  | $           |        |          |  | $ | 46,200  | 
|Buildings               |  |      | 202,455 |              |  |             | 28,777  |          |  |   | 173,678 | 
|Machinery and equipment |  |      | 633,027 |              |  |             | 141,304 |          |  |   | 491,723 | 
|                        |  |      |         |              |  |             |         |          |  |   |         | 
|                        |  | $    | 881,682 |              |  | $           | 170,081 |          |  | $ | 711,601 | 
|                        |  |      |         |              |  |             |         |          |  |   |         | 

|                        |  |      |         |              |  |             |         |          |  |   |         | 
|----------------------- |  | ---- | ------- | ------------ |  | ----------- | ------- | -------- |  | - | ------- | 
|                        |  | 2001
|                        |  |     
|                        |  |      |         |              |  | Accumulated |         | Net Book
|                        |  | Cost |         | Depreciation |  | Value      
|                        |  |      |         |              |  |            
|Land                    |  | $    | 34,433  |              |  | $           |        |          |  | $ | 34,433  | 
|Buildings               |  |      | 177,921 |              |  |             | 20,971  |          |  |   | 156,950 | 
|Machinery and equipment |  |      | 531,241 |              |  |             | 108,408 |          |  |   | 422,833 | 
|                        |  |      |         |              |  |             |         |          |  |   |         | 
|                        |  | $    | 743,595 |              |  | $           | 129,379 |          |  | $ | 614,216 | 
|                        |  |      |         |              |  |             |         |          |  |   |         | 



|5. |  | Other assets:
|-- |  | -------------

|                                                                        |  |      |        |      |  |   |        | 
|----------------------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                                                        |  | 2002 |        | 2001
|                                                                        |  |      |        |     
|Deferred charges, less accumulated amortization
of $702 (2001 - $3,368) |  | $    | 9,822  |      |  | $ | 21,097 | 
|Equity investments                                                      |  |      | 13,551 |      |  |   | 27,462 | 
|Long-term receivables                                                   |  |      | 9,942  |      |  |   | 4,876  | 
|Deferred pension asset (note 9(a))                                      |  |      | 3,254  |      |  |   | 3,143  | 
|Assets held for sale (note 2)                                           |  |      |       |      |  |   | 23,237 | 
|                                                                        |  |      |        |      |  |   |        | 
|                                                                        |  | $    | 36,569 |      |  | $ | 79,815 | 
|                                                                        |  |      |        |      |  |   |        | 

40



---



##### 



The long-term receivable includes loans of $nil (2001 -
$1,376) to six senior executives to enable them to purchase
stock of the Company. These loans were repaid in February 2003
and are included in accounts receivable at December 2002.
Long-term receivables also includes $7,442 receivable over the
next five years pursuant to a royalty agreement and a $2,500
non-interest bearing receivable due in 2005.

During 2002, the Company made an equity investment in a door
component manufacturing entity for consideration of $9,600.



|6. |  | Bank indebtedness:
|-- |  | ------------------

|                                          |  |      |       |      |  |   |         | 
|----------------------------------------- |  | ---- | ----- | ---- |  | - | ------- | 
|                                          |  | 2002 |       | 2001
|                                          |  |      |       |     
|Bank indebtedness                         |  | $    | 3,830 |      |  | $ | 5,377   | 
|Long-term revolving bank loan (note 7(a)) |  |      |      |      |  |   | 100,000 | 
|                                          |  |      |       |      |  |   |         | 
|                                          |  | $    | 3,830 |      |  | $ | 105,377 | 
|                                          |  |      |       |      |  |   |         | 

Certain of the Companys subsidiaries have credit facilities
with local lenders. These facilities are secured by a fixed
and floating charge over the assets of the respective
subsidiaries and are non-recourse to the parent company. The
Bank term loan was repaid in March 2002.



|7. |  | Long-term debt:
|-- |  | ---------------

(a)  Long-term debt:

|                                                                                              |  |      |         |      |  |   |         | 
|--------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                                                              |  | 2002 |         | 2001
|                                                                                              |  |      |         |     
|Bank term loan, bearing interest at LIBOR plus 2.5%
(2001 - 3.0%), due August 31, 2006        |  | $    | 68,798  |      |  | $ | 135,000 | 
|Bank term loan, bearing interest at LIBOR plus 2.75%
(2001 - 3.5%), due August 31, 2008       |  |      | 435,156 |      |  |   | 349,125 | 
|$100 million long-term revolving bank loan,
bearing interest at LIBOR plus 2.5% (2001 - 3.0%) |  |      |        |      |  |   |        | 
|Bank term loan, bearing interest at LIBOR plus 3.5%,
due June 28, 2007                        |  |      | 25,000  |      |  |   |        | 
|Other loans, at various interest rates and maturities                                         |  |      | 4,628   |      |  |   | 5,755   | 
|                                                                                              |  |      |         |      |  |   |         | 
|                                                                                              |  |      | 533,582 |      |  |   | 489,880 | 
|Less current portion                                                                          |  |      | 35,582  |      |  |   | 16,177  | 
|                                                                                              |  |      |         |      |  |   |         | 
|                                                                                              |  | $    | 498,000 |      |  | $ | 473,703 | 
|                                                                                              |  |      |         |      |  |   |         | 

The aggregate amount of principal repayments required in
each of the next five years is as follows:

|     |  |   |         | 
|---- |  | - | ------- | 
|2003 |  | $ | 35,582  | 
|2004 |  |   | 35,536  | 
|2005 |  |   | 29,283  | 
|2006 |  |   | 10,141  | 
|2007 |  |   | 114,444 | 
|     |  |   |         | 

Interest on long-term debt for the year ended December 31,
2002 was $34,553 (2001  $21,293).

41



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|7. |  | Long-term debt: (continued)
|-- |  | ---------------------------

The Company has entered into interest rate swap agreements
to convert floating rate debt into fixed rate debt. At
December 31, 2002, a total of $318,750 (2001  $250,000) of
floating rate debt has been converted into fixed rate debt
at a weighted average interest rate of 7.5% (2001 
8.71%). These agreements mature at various dates through
2006. At December 31, 2002, these agreements had a fair
value of $293,959.

In July of 2002, the Company undertook a refinancing of its
existing bank facilities. The Company entered into an
amended and restated credit agreement that constituted a
settlement of the previous bank facilities. As a result, the
company wrote off financing costs of $17,566.

At the closing of the amended and restated bank agreement,
$650,000 was available to be drawn through a combination of
term facilities having varying maturity dates and interest
rates. The maximum to be drawn under the long-term revolving
bank term loan tranche totals $100,000. The loan carries an
interest rate of LIBOR plus 2.50% and is due August 2006. The
maximum to be drawn under the amended and restated bank term
loans was $550,000. Additional repayment of bank term loans
may be required depending on the generation of excess cash
flow as defined in the credit agreement. The new bank
facilities are secured by fixed and floating charges over
substantially all of the Companys assets.

The Company used the proceeds from the refinancing to repay
existing indebtedness including the Subordinated long-term
debt. On the date of settlement, the Subordinated-long term
debt had a carrying amount of $125,556, was retired for
$105,000 and resulted in a gain on settlement of $20,556.

In conjunction with the purchase of Masonite in 2001, the
Company undertook a refinancing of the senior notes and
existing revolving credit facility. The senior notes were
repaid in October 2001 utilizing term facility borrowings. As
the senior notes and revolving credit facility were settled
prior to their maturity dates, the Company incurred debt
extinguishment costs totalling $17,370.

(b)  Subordinated long-term debt:

The subordinated long-term debt arose on the purchase of
Masonite. The debt carried interest at an annual rate of
11.25%. The subordinated long term debt was repaid from the
proceeds of the amended and restated credit facility as
described above.



|8. |  | Share capital:
|-- |  | --------------

|            |                                                                                                                                            |  |      |         |      |  |   |         | 
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | ---- |  | - | ------- | 
|            |                                                                                                                                            |  | 2002 |         | 2001
|            |                                                                                                                                            |  |      |         |     
|Authorized: |                                                                                                                                            |  |      |         |      |  |   |        
|            | Unlimited first preference shares, issuable in
series and non-voting with rights, privileges
and restrictions to be fixed by the directors |  |      |         |      |  |   |         | 
|            | Unlimited common shares                                                                                                                    |  |      |         |      |  |   |         | 
|Issued:     |                                                                                                                                            |  |      |         |      |  |   |        
|            | 53,409,349 common shares (2001 - 51,251,978)                                                                                               |  | $    | 257,325 |      |  | $ | 236,262 | 
|            |                                                                                                                                            |  |      |         |      |  |   |         | 

42



---



##### 





|8. |  | Share capital: (continued)
|-- |  | --------------------------

The Company provides a stock option plan to allow management
and key employees to purchase shares of the Company. At
December 31, 2002, options to purchase 3,657,200 common shares
(2001  4,310,500) at an average option price of $9.30 (2001 -
$7.87) per share were outstanding. The term of each option is
10 years and the vesting period is three years. The exercise
price for options is the closing share price of the Company on
The Toronto Stock Exchange on the day prior to the grant date.
The options have expiry dates through 2012. The number of
options exercisable at December 31, 2002 was 3,233,425 (2001 -
4,115,433) at an average price of $8.67 (2001  $7.87). During
the year, 632,500 options (2001  200,000) were granted at an
average exercise price of $14.11 (2001  $8.37) per share and
77,000 (2001  13,000) options were forfeited at an average
exercise price of $9.09 (2001  $10.15). A total of 1,208,800
common shares (2001  148,500) were exercised under the option
plan at an average price of $6.96 (2001  $3.66) per share for
proceeds of $8,412 (2001  $543). Compensation expense related
to stock options for 2002 was $nil (2001  $nil).

Warrants for 200,000 common shares with a price of $8.35
per share were exercised during the year (2001-nil) for
proceeds of $1,670. There were nil (2001  200,000)
warrants outstanding at December 31, 2002.

Information with respect to outstanding options is as follows:

|                    |  |                     |           |              |  |           |      |             |  |          |       |  |  |          |           |  |  |   |       | 
|------------------- |  | ------------------- | --------- | ------------ |  | --------- | ---- | ----------- |  | -------- | ----- |  |  | -------- | --------- |  |  | - | ----- | 
|Options outstanding |  | Options exercisable
|                    |  |                    
|                    |  |                     |           |              |  | Average   |      | Weighted    |  |          |       |  |  | Weighted
|Range of            |  |                     |           |              |  | remaining |      | average     |  |          |       |  |  | average 
|exercise            |  | Number              |           | contractural |  | exercise  |      | Number      |  | exercise
|price               |  | outstanding         |           | life (years) |  | price     |      | exercisable |  | price   
|                    |  |                     |           |              |  |           |      |             |  |         
|$5.26-$7.25         |  |                     | 1,037,700 |              |  |           | 2.06 |             |  | $        | 6.53  |  |  |          | 1,037,700 |  |  | $ | 6.53  | 
|8.03- 10.49         |  |                     | 1,987,000 |              |  |           | 4.25 |             |  |          | 9.21  |  |  |          | 1,987,000 |  |  |   | 9.21  | 
|14.11               |  |                     | 632,500   |              |  |           | 9.14 |             |  |          | 14.11 |  |  |          | 208,725   |  |  |   | 14.11 | 
|                    |  |                     |           |              |  |           |      |             |  |          |       |  |  |          |           |  |  |   |       | 
|                    |  |                     | 3,657,200 |              |  |           |      |             |  |          |       |  |  |          | 3,233,425 |  |  |   |       | 
|                    |  |                     |           |              |  |           |      |             |  |          |       |  |  |          |           |  |  |   |       | 

During 2002, the Company issued 623,571 common shares with an
ascribed value of $9,060 in connection with the acquisitions
described in note 2. An additional 125,000 shares with an
ascribed value of $1,921 were issued in connection with a
previous acquisition, which has been included in goodwill.

During 2001, the Company issued 7,150,000 common shares for
net proceeds of $63,157, including future income taxes of
$1,215.

During 2002, the Company granted 632,500 options that call
for settlement by the issuance of common shares. The
weighted-average grant date fair value of the options issued
was $6.42. Had compensation cost been determined based on
the fair value at the grant dates for awards under those
plans consistent with the fair value based method of
accounting for stock-based compensation, the Companys net
income for the year would have been reduced by approximately
$1,700 to $87,843, or $0.03 per share to $1.67 basic and
$1.62 diluted. The weighted average grant date fair value of
these options has been estimated using the Black Scholes
model for pricing options assuming weighted average expected
dividend yields of 0.0% annually, weighted average risk free
interest rate of 5.3%, weighted average expected common stock
price volatility of 32% and a weighted average expected
option life of 7 years.

43



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|8. |  | Share capital (continued)
|-- |  | -------------------------

The Board of Directors (the Board) of the Company has
adopted a shareholder rights plan (the Plan) to encourage
fair treatment of all the Companys shareholders in the event
of a takeover bid. The Plan results in one Share Right being
issued for each outstanding common share. Under specific
circumstances relating to a takeover bid, each Share Right
entitles the holder thereof (other than the person making the
takeover bid) to acquire common shares for each outstanding
Share Right exercisable at a price below market value. If
unused, the Share Rights expire at the conclusion of the
Companys 2003 annual shareholder meeting.



|9. |  | Employee benefit plans:
|-- |  | -----------------------

(a)  Pension benefits

Certain of the Companys subsidiaries maintain defined benefit
pension plans for specific employees. Information about the
Companys defined benefit plans is as follows:

|                                                           |                                                         |   |        |        |      |   |        |        |  
|---------------------------------------------------------- | ------------------------------------------------------- | - | ------ | ------ | ---- | - | ------ | ------ | -
|                                                           |                                                         |   | 2002   |        | 2001
|                                                           |                                                         |   |        |        |     
|Fair value of plan assets, beginning of year               |                                                         | $ | 48,780 |        |      | $ |       |       
|Fair value of plan assets acquired on acquisition          |                                                         |   |       |        |      |   | 47,668 |       
|Actual return on plan assets                               |                                                         |   | 8,383  |        |      |   | 1,112  |       
|                                                           |                                                         |   |        |        |      |   |        |       
|Fair value of plan assets, end of year                     |                                                         | $ | 57,163 |        |      | $ | 48,780 |       
|                                                           |                                                         |   |        |        |      |   |        |       
|Accrued benefit obligation, beginning of year              |                                                         | $ | 45,637 |        |      | $ |       |       
|Accrued benefit obligation, arising at
date of acquisition |                                                         |   |        |        |      |   | 43,946 |       
|Current service cost                                       |                                                         |   | 1,623  |        |      |   | 630    |       
|Interest cost                                              |                                                         |   | 3,528  |        |      |   | 1,061  |       
|Actuarial loss                                             |                                                         |   | 2,781  |        |      |   |       |       
|Plan amendments                                            |                                                         |   | 1,777  |        |      |   |       |       
|Curtailments                                               |                                                         |   | (4,832 | )      |      |   |       |       
|                                                           |                                                         |   |        |        |      |   |        |       
|Accrued benefit obligation, end of year                    |                                                         | $ | 50,514 |        |      | $ | 45,637 |       
|                                                           |                                                         |   |        |        |      |   |        |       
|Plan funded status:                                        |                                                         |   |        |        |      |   |        |       
|                                                           | Surplus, end of year                                    |   | $      | 6,649  |      |   | $      | 3,143  |  
|                                                           | Unrecognized prior service cost                         |   |        | 1,193  |      |   |        |       |  
|                                                           | Unrecognized net (gain)                                 |   |        | (4,588 | )    |   |        |       |  
|                                                           |                                                         |   |        |        |      |   |        |       
|Pension asset, end of year                                 |                                                         | $ | 3,254  |        |      | $ | 3,143  |       
|                                                           |                                                         |   |        |        |      |   |        |       
|Pension expense:                                           |                                                         |   |        |        |      |   |        |       
|                                                           | Current service cost                                    |   | $      | 1,623  |      |   | $      | 630    |  
|                                                           | Interest cost                                           |   |        | 3,528  |      |   |        | 1,061  |  
|                                                           | Expected return on plan assets                          |   |        | (3,655 | )    |   |        | (1,112 | )
|                                                           | Net amortization of prior service cost
and curtailments |   |        | (1,616 | )    |   |        |       |  
|                                                           |                                                         |   |        |        |      |   |        |       
|Net pension expense                                        |                                                         | $ | (120   | )      |      | $ | 579    |       
|                                                           |                                                         |   |        |        |      |   |        |       

44



---



##### 





|9. |  | Employee benefit plans: (continued)
|-- |  | -----------------------------------

The significant actuarial assumptions adopted in measuring
the Companys accrued benefit obligations are as follows
(weighted average assumptions as at December 31):

|                                                 |  |      |      |      |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  |  | ---- | -
|                                                 |  | 2002 |      | 2001
|                                                 |  |      |      |     
|Discount rate                                    |  |      | 6.75 | %    |  |  | 7.25 | %
|Expected long-term rate of return on plan assets |  |      | 7.00 | %    |  |  | 7.00 | %
|Rate of compensation increase                    |  |      | 4.50 | %    |  |  | 4.50 | %

(b) Post-retirement benefits

Certain of the Companys subsidiaries maintain defined
post-retirement benefit plans for specific employees.
Information about the Companys post-retirement benefit
plans is as follows:

|                                                           |                       |   |        |        |      |   |        |        |  
|---------------------------------------------------------- | --------------------- | - | ------ | ------ | ---- | - | ------ | ------ | -
|                                                           |                       |   | 2002   |        | 2001
|                                                           |                       |   |        |        |     
|Accrued benefit obligation, beginning of year              |                       | $ | 3,476  |        |      | $ |       |       
|Accrued benefit obligation, arising at date
of acquisition |                       |   |       |        |      |   | 3,270  |       
|Current service cost                                       |                       |   | 429    |        |      |   | 127    |       
|Interest cost                                              |                       |   | 283    |        |      |   | 79     |       
|Actuarial loss                                             |                       |   | 907    |        |      |   |       |       
|                                                           |                       |   |        |        |      |   |        |       
|Accrued benefit obligations, end of year                   |                       | $ | 5,095  |        |      | $ | 3,476  |       
|                                                           |                       |   |        |        |      |   |        |       
|Plan funded status:                                        |                       |   |        |        |      |   |        |       
|                                                           | Deficit, end of year  |   | $      | (5,095 | )    |   | $      | (3,476 | )
|                                                           | Unrecognized net loss |   |        | 904    |      |   |        |       |  
|                                                           |                       |   |        |        |      |   |        |       
|Accrued benefit liability, end of year                     |                       | $ | (4,191 | )      |      | $ | (3,476 | )     
|                                                           |                       |   |        |        |      |   |        |       

Accrued benefit liabilities are included in accounts
payable and accrued liabilities.

|                                        |                          |   |     |     |  |   |     |     | 
|--------------------------------------- | ------------------------ | - | --- | --- |  | - | --- | --- | 
|Other future employee benefits expense: |                          |   |     |     |  |   |     |    
|                                        | Current service cost     |   | $   | 429 |  |   | $   | 126 | 
|                                        | Interest cost            |   |     | 283 |  |   |     | 79  | 
|                                        | Amortization of net loss |   |     | 2   |  |   |     |    | 
|                                        |                          |   |     |     |  |   |     |     | 
|Other future employee benefits expense  |                          | $ | 714 |     |  | $ | 205 |    
|                                        |                          |   |     |     |  |   |     |     | 

The discount rate used in measuring the Companys accrued
benefit obligation is 6.75% (2001  7.25%). A 5.25% annual
rate of increase in the per capita cost of covered health
care was assumed for 2002. The rate was assumed to decrease over a
one year period to an ultimate annual rate of 5.00%.

45



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|10. |  | Cumulative translation adjustments:
|--- |  | -----------------------------------

This account represents the cumulative unrealized foreign
currency translation gain (loss) on the Companys net
investment in self-sustaining foreign operations. Changes
during the year are as follows:

|                                                         |  |      |         |      |  |   |         |  
|-------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                         |  | 2002 |         | 2001
|                                                         |  |      |         |     
|Balance, beginning of year                               |  | $    | (37,351 | )    |  | $ | (19,585 | )
|Unrealized gain (loss) on translation
of net investments |  |      | 36,613  |      |  |   | (17,766 | )
|                                                         |  |      |         |      |  |   |         |  
|Balance, end of year                                     |  | $    | (738    | )    |  | $ | (37,351 | )
|                                                         |  |      |         |      |  |   |         |  



|11. |  | Commitments:
|--- |  | ------------

Future minimum payments, by year, under non-cancellable
operating leases with initial or remaining terms of one year
or more consisted of the following at December 31, 2002:

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 13,408 | 
|2004       |  |   | 9,385  | 
|2005       |  |   | 5,623  | 
|2006       |  |   | 3,610  | 
|2007       |  |   | 3,334  | 
|Thereafter |  |   | 9,836  | 
|           |  |   |        | 
|           |  | $ | 45,196 | 
|           |  |   |        | 



|12. |  | Contingencies:
|--- |  | --------------

The Company is involved in various claims and legal actions.
In the opinion of management, the ultimate disposition of
these matters will not have a material adverse effect on the
Companys consolidated financial position or liquidity.

46



---



##### 





|13. |  | Income taxes:
|--- |  | -------------

|        |  |      |        |      |  |   |         |  
|------- |  | ---- | ------ | ---- |  | - | ------- | -
|        |  | 2002 |        | 2001
|        |  |      |        |     
|Current |  | $    | 15,907 |      |  | $ | 25,224  |  
|Future  |  |      | 12,044 |      |  |   | (12,291 | )
|        |  |      |        |      |  |   |         |  
|        |  | $    | 27,951 |      |  | $ | 12,933  |  
|        |  |      |        |      |  |   |         |  

The effective rates of income taxes provided in the
consolidated statements of income vary from the combined
Canadian federal and provincial statutory income tax rates as
follows:

|                                                                       |  |        |         |        |  |         |       |        |  |   |        |         |  |  |       |  
|---------------------------------------------------------------------- |  | ------ | ------- | ------ |  | ------- | ----- | ------ |  | - | ------ | ------- |  |  | ----- | -
|                                                                       |  | 2002   |         | 2001  
|                                                                       |  |        |         |       
|                                                                       |  |        |         |        |  | % of    |       |        |  |   |        | % of   
|                                                                       |  |        |         |        |  | pre-tax |       |        |  |   |        | pre-tax
|                                                                       |  | Amount |         | income |  | Amount  |       | income
|                                                                       |  |        |         |        |  |         |       |       
|Income tax computed at
statutory income tax rate                       |  | $      | 47,186  |        |  |         | 37.7  |        |  | $ | 24,066 |         |  |  | 41.7  |  
|Reduction in rate of tax
due to income earned in
foreign jurisdictions |  |        | (14,899 | )      |  |         | (11.9 | )      |  |   | (8,755 | )       |  |  | (15.1 | )
|Reduction for manufacturing
and processing                             |  |        | (715    | )      |  |         | (0.6  | )      |  |   | (2,402 | )       |  |  | (4.2  | )
|Change in valuation allowance                                          |  |        | (974    | )      |  |         | (0.8  | )      |  |   | (644   | )       |  |  | (1.1  | )
|Gain (loss) on refinancing, net                                        |  |        | (2,500  | )      |  |         | (2.0  | )      |  |   | 643    |         |  |  | 1.1   |  
|Other                                                                  |  |        | (147    | )      |  |         | (0.1  | )      |  |   | 25     |         |  |  | (0.0  | )
|                                                                       |  |        |         |        |  |         |       |        |  |   |        |         |  |  |       |  
|                                                                       |  | $      | 27,951  |        |  |         | 22.3  |        |  | $ | 12,933 |         |  |  | 22.4  |  
|                                                                       |  |        |         |        |  |         |       |        |  |   |        |         |  |  |       |  

The tax effects of temporary differences that give rise to
significant portions of the future tax liability are as
presented below:

|                         |                                                    |   |          |          |      |   |         |         |  
|------------------------ | -------------------------------------------------- | - | -------- | -------- | ---- | - | ------- | ------- | -
|                         |                                                    |   | 2002     |          | 2001
|                         |                                                    |   |          |          |     
|Future tax assets:       |                                                    |   |          |          |      |   |         |        
|                         | Loss carry forwards                                |   | $        | 31,779   |      |   | $       | 24,392  |  
|                         | Intangibles                                        |   |          | 9,076    |      |   |         | 3,582   |  
|                         | Expenses not currently deductible for tax purposes |   |          | 31,526   |      |   |         | 19,695  |  
|                         | Other                                              |   |          |         |      |   |         | 18      |  
|                         |                                                    |   |          |          |      |   |         |         |  
|                         |                                                    |   | 72,381   |          |      |   | 47,687  |        
|Valuation allowance      |                                                    |   | (6,957   | )        |      |   | (7,904  | )      
|                         |                                                    |   |          |          |      |   |         |         |  
|                         |                                                    |   | 65,424   |          |      |   | 39,783  |        
|Future tax liabilities:  |                                                    |   |          |          |      |   |         |        
|                         | Plant and equipment                                |   |          | (105,572 | )    |   |         | (93,075 | )
|                         | Other                                              |   |          | (18,714  | )    |   |         | (1,575  | )
|                         |                                                    |   |          |          |      |   |         |         |  
|                         |                                                    |   | (124,286 | )        |      |   | (94,650 | )      
|                         |                                                    |   |          |          |      |   |         |         |  
|Net future tax liability |                                                    | $ | (58,862  | )        |      | $ | (54,867 | )      
|                         |                                                    |   |          |          |      |   |         |         |  

47



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|14. |  | Supplemental cash flow information:
|--- |  | -----------------------------------

|                                                              |  |      |        |      |  |   |         | 
|------------------------------------------------------------- |  | ---- | ------ | ---- |  | - | ------- | 
|                                                              |  | 2002 |        | 2001
|                                                              |  |      |        |     
|Interest paid                                                 |  | $    | 33,342 |      |  | $ | 27,752  | 
|Income taxes paid                                             |  |      | 14,215 |      |  |   | 20,068  | 
|Income tax refunds                                            |  |      | 5,300  |      |  |   |        | 
|Common shares issued in connection
with business combinations |  |      | 10,981 |      |  |   |        | 
|Notes issued in connection
with business combinations         |  |      | 800    |      |  |   | 113,461 | 
|                                                              |  |      |        |      |  |   |         | 



|15. |  | Earnings per share:
|--- |  | -------------------

The computations for basic and diluted earnings per share are as follows:

|                                                      |                                      |   |        |            |      |   |        |            | 
|----------------------------------------------------- | ------------------------------------ | - | ------ | ---------- | ---- | - | ------ | ---------- | 
|                                                      |                                      |   | 2002   |            | 2001
|                                                      |                                      |   |        |            |     
|Net income                                            |                                      | $ | 89,543 |            |      | $ | 39,460 |           
|Weighted average number of common shares outstanding: |                                      |   |        |            |      |   |        |           
|                                                      | Basic                                |   |        | 52,628,000 |      |   |        | 46,807,000 | 
|                                                      | Effect of share options and warrants |   |        | 1,694,000  |      |   |        | 261,000    | 
|                                                      |                                      |   |        |            |      |   |        |           
|                                                      | Diluted                              |   |        | 54,322,000 |      |   |        | 47,068,000 | 
|                                                      |                                      |   |        |            |      |   |        |           
|Earnings per share:                                   |                                      |   |        |            |      |   |        |           
|                                                      | Basic                                |   | $      | 1.70       |      |   | $      | 0.84       | 
|                                                      | Diluted                              |   |        | 1.65       |      |   |        | 0.84       | 
|                                                      |                                      |   |        |            |      |   |        |           

In 2002, all share options to purchase common shares were
included in the computation of diluted earnings per share
because the exercise price was lower than the average market
price of the common shares during the reporting year. In 2001,
2,780,000 share options and warrants at prices in excess of
$7.18 per share were outstanding, but were not included in the
computation of diluted earnings per share because the exercise
price was greater than the average market price of the common
shares for the reporting year.

48



---



##### 





|16. |  | Segmented information:
|--- |  | ----------------------

Substantially all of the Companys business activities
are based in two geographic segments as follows:

|                          |                                  |      |           |           |   |   |           |           | 
|------------------------- | -------------------------------- | ---- | --------- | --------- | - | - | --------- | --------- | 
|Geographic segment data   |                                  | 2002 |           | 2001     
|                          |                                  |      |           |          
|Sales:                    |                                  |      |           |           |   |   |           |          
|                          | North America                    |      | $         | 1,357,508 |   |   | $         | 1,200,491 | 
|                          | Europe                           |      |           | 262,008   |   |   |           | 221,111   | 
|                          |                                  |      |           |           |   |   |           |           | 
|                          |                                  | $    | 1,619,516 |           |   | $ | 1,421,602 |          
|                          |                                  |      |           |           |   |   |           |           | 
|Segment operating income: |                                  |      |           |           |   |   |           |          
|                          | North America                    |      | $         | 165,435   |   |   | $         | 116,510   | 
|                          | Europe                           |      |           | 27,788    |   |   |           | 14,709    | 
|                          |                                  |      |           |           |   |   |           |           | 
|                          |                                  | $    | 193,223   |           |   | $ | 131,219   |          
|                          |                                  |      |           |           |   |   |           |           | 
|Expenses:                 |                                  |      |           |           |   |   |           |          
|                          | General                          |      |           | 27,285    |   |   |           | 23,682    | 
|                          | Interest                         |      |           | 43,767    |   |   |           | 32,456    | 
|                          | Gain (loss) on refinancing, net  |      |           | (2,990    | ) |   |           | 17,370    | 
|                          | Income taxes                     |      |           | 27,951    |   |   |           | 12,933    | 
|                          | Non-controlling interest         |      |           | 7,667     |   |   |           | 5,318     | 
|                          |                                  |      |           |           |   |   |           |           | 
|                          |                                  |      | 103,680   |           |   |   | 91,759    |          
|                          |                                  |      |           |           |   |   |           |           | 
|Net income                |                                  | $    | 89,543    |           |   | $ | 39,460    |          
|                          |                                  |      |           |           |   |   |           |           | 
|Identifiable assets:      |                                  |      |           |           |   |   |           |          
|                          | North America                    |      | $         | 1,098,889 |   |   | $         | 1,111,841 | 
|                          | Europe                           |      |           | 293,158   |   |   |           | 262,402   | 
|                          | Corporate assets,
including cash |      |           | 70,744    |   |   |           | 68,043    | 
|                          |                                  |      |           |           |   |   |           |           | 
|                          |                                  | $    | 1,462,791 |           |   | $ | 1,442,286 |          
|                          |                                  |      |           |           |   |   |           |           | 

The Company derives revenue from two major product lines,
interior and exterior products as follows:

|                          |                   |      |           |           |  |   |           |         | 
|------------------------- | ----------------- | ---- | --------- | --------- |  | - | --------- | ------- | 
|Product line segment data |                   | 2002 |           | 2001     
|                          |                   |      |           |          
|Sales:                    |                   |      |           |           |  |   |           |        
|                          | Interior products |      | $         | 1,074,826 |  |   | $         | 921,875 | 
|                          | Exterior products |      |           | 544,690   |  |   |           | 499,727 | 
|                          |                   |      |           |           |  |   |           |         | 
|                          |                   | $    | 1,619,516 |           |  | $ | 1,421,602 |        
|                          |                   |      |           |           |  |   |           |         | 

49



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|16. |  | Segmented information: (continued)
|--- |  | ----------------------------------

Included in sales in 2002 and 2001 are export sales from
North America of $26,137 and $14,167, respectively, and from
Europe of $1,439 and $503, respectively. Transfers between
geographic regions and product lines are accounted for at the
same prices as sales to customers outside the enterprise.
Included in sales in 2002 and 2001 are sales from facilities
in Canada to all external customers of $369,000 and $333,000,
respectively. Included in sales in 2002 and 2001 are sales to
one customer of $334,000 and $293,000, respectively.
Depreciation and amortization in 2002 and 2001 in North
America was $35,174 and $28,252, respectively, and in Europe
was $9,681 and $7,151, respectively.

Capital assets employed in Canada, North America and Europe in
2002 were $73,983, $535,526 and $176,075, respectively, and in
2001 were $78,407, $455,279 and $158,937, respectively.
Capital expenditures in North America and Europe in 2002 were
$37,814 and $5,689, respectively, and in 2001 were $28,255 and
$2,283, respectively. Equity investments in North America and
Europe in 2002 were $13,551 and nil, respectively, and in 2001
were $27,462 and nil, respectively. Goodwill in Canada, North
America and Europe in 2002 was $23,117, $119,292 and $4,709,
respectively, and in 2001 was $18,972, $113,242 and $4,165,
respectively.



|17. |  | Reconciliation of Canadian and United States generally accepted accounting principles:
|--- |  | --------------------------------------------------------------------------------------

These consolidated financial statements have been prepared
in accordance with Canadian generally accepted accounting
principles (GAAP) which differs in certain respects from
United States GAAP. Following is a summary of the effect of
significant differences in GAAP on the Companys
consolidated financial statements.

If United States GAAP were applied, net income for the
year would be adjusted as follows:

|                                                    |  |      |         |      |  |   |        |  
|--------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------ | -
|                                                    |  | 2002 |         | 2001
|                                                    |  |      |         |     
|Net income based on Canadian GAAP                   |  | $    | 89,543  |      |  | $ | 39,460 |  
|Effect of SFAS 133, net of tax (i)                  |  |      | (13,835 | )    |  |   | (1,104 | )
|Effect of SFAS 109, net of tax (ii)                 |  |      |        |      |  |   | (737   | )
|                                                    |  |      |         |      |  |   |        |  
|Net income based on United States GAAP              |  | $    | 75,708  |      |  | $ | 37,619 |  
|                                                    |  |      |         |      |  |   |        |  
|Earnings per share under United States GAAP         |  | $    | 1.44    |      |  | $ | 0.80   |  
|Diluted earnings per share under United States GAAP |  |      | 1.39    |      |  |   | 0.80   |  
|                                                    |  |      |         |      |  |   |        |  

50



---



##### 





|17. |  | Reconciliation of Canadian and United States generally accepted accounting principles: (continued)
|--- |  | --------------------------------------------------------------------------------------------------



|(i)  |  | Effect of SFAS 133                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|     |  | Effective January 1, 2001, the Company adopted SFAS No.
133, Accounting for Derivative Instruments and Hedging
Activities, which requires that all derivative
instruments be reported on the balance sheet at fair value
and establishes criteria for designation and effectiveness
of hedging relationships. Since the criteria is different
under United States GAAP from Canadian GAAP, any change in
fair value of these financial instruments is reported in
income.                                                                                                                                                                        
|    
|     |  | The Company has entered into interest rate swap agreements to
convert a portion of its floating rate debt into fixed rate
debt in accordance with the Companys risk management
objective of mitigating the variability and uncertainty in
its cash flows due to variable interest rates. At December
31, 2002, a total of $318,750 of floating rate debt was
effectively hedged at a weighted average interest rate of
7.5%. These agreements mature at various dates through 2006.
Under United States GAAP, such financial instruments are
required to be marked-to-market regardless of the economic
effectiveness of the hedging relationship.
|    
|(ii) |  | Effect of SFAS 109                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|     |  | In fiscal 2000, the Company adopted the CICA
recommendations pertaining to income taxes retroactively
without restatement of the prior years resulting in
differences on business combinations compared to SFAS 109,
Accounting for Income Taxes. The amortization of increased
goodwill on acquisitions as a result of adopting SFAS 109 was
$nil (2001  $737).                                                                                                                                                                                                                                                                                

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS)
No. 145, which rescinded SFAS No. 4 Reporting Gains and
Losses from Extinguishment of Debt. Under SFAS No. 145,
gains and losses on extinguishment of debt are not
extraordinary items. SFAS No.145 was adopted on a retroactive
basis and as a result there is no longer a Canadian and
United States GAAP difference as reported in fiscal 2001.

United States GAAP requires that depreciation and
amortization be included in the determination of operating
income and does not permit the disclosure of a subtotal of
income before depreciation and amortization.

Comprehensive income under United States GAAP is as follows:

|                                                 |  |      |         |      |  |   |         |  
|------------------------------------------------ |  | ---- | ------- | ---- |  | - | ------- | -
|                                                 |  | 2002 |         | 2001
|                                                 |  |      |         |     
|Net income based on United States GAAP           |  | $    | 75,708  |      |  | $ | 37,619  |  
|Foreign currency translation adjustment          |  |      | 36,613  |      |  |   | (17,766 | )
|                                                 |  |      |         |      |  |   |         |  
|Comprehensive income based on United States GAAP |  | $    | 112,321 |      |  | $ | 19,853  |  
|                                                 |  |      |         |      |  |   |         |  

51



---



##### 



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years ended December 31, 2002 and 2001. (In thousands of United States dollars, except per share amounts)



|17. |  | Reconciliation of Canadian and United States generally accepted accounting principles: (continued)
|--- |  | --------------------------------------------------------------------------------------------------

Consolidated balance sheets:

As a result of the differences in the method of adoption of
CICA recommendations and SFAS 109, at December 31, 2002,
goodwill on acquisitions net of accumulated amortization
and retained earnings would have increased by $9,651 (2001
- $9,651).

In addition, the $nil (2001  $1,376) long-term receivable,
representing loans to senior executives to enable them to
purchase stock of the Company, would be shown as a deduction
from shareholders equity in 2001.

Recognition of the Companys financial instruments pursuant to
SFAS 133 on the consolidated balance sheets would have
increased current assets by $1,012 (2001  $796), current
liabilities by $380 (2001  $2,189), long-term liabilities by
$24,791 (2001  $nil), non-controlling interest by $201 (2001
 ($289)) long-term future tax assets by $9,421 (2001 
$nil) and decreased retained earnings by $14,939 (2001 
$1,104).

Consolidated statements of cash flows:

United States GAAP does not permit the disclosure of a
subtotal for cash provided by operating activities before the
effect of changes in working capital.

Recently issued accounting standards:

In August 2001, SFAS No. 143, Accounting for Asset
Retirement Obligations was approved and requires that the
fair value of an asset retirement obligation be recorded as
a liability, at fair value, in the period in which the
Company incurs the obligation. SFAS No. 143 is effective
for the Companys fiscal year commencing January 1, 2003.
The Company expects the adoption of this standard will have
no significant impact on its financial position, results of
operations or cash flows.

In July 2002, FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146
requires the recognition of a liability for an exit or
disposal activity only when the costs are incurred and can be
measured at fair value. Current standards require only a
commitment to an exit or disposal plan in order to recognize
the majority of the costs. SFAS No. 146 is effective for exit
or disposal activities initiated after December 31, 2002. The
Company expects the adoption of this standard will have no
significant impact on its financial position, results of
operations, or cash flows.

In November 2002, FASB issued Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others (FIN 45), which requires certain disclosures of
obligations under guarantees. The disclosure requirements of
FIN 45 are effective for the Companys year ended December
31, 2002. Effective for 2003, FIN 45 also requires the
recognition of a liability by a guarantor at the inception of
certain guarantees entered into or modified after December
31, 2002, based on the fair value of the guarantee. The
Company expects that there will be no significant impact from
the measurement requirements of FIN 45.

52



---



##### 





|17. |  | Reconciliation of Canadian and United States generally accepted accounting principles: (continued)
|--- |  | --------------------------------------------------------------------------------------------------

During the year, the FASB issued a final interpretation on the
consolidation of Variable Interest Entities (VIEs), including
special purpose entities. A Canadian standard on this topic
will likely be finalized later in 2003 and is expected to be
consistent with the United States interpretation. An entity is
considered a VIE that is subject to consolidation under the
interpretations consolidation model if its total equity at
risk is insufficient to permit the entity to finance its
activities without additional subordinated financial support
from others and/or if the equity investors lack any one of
three essential characteristics of a controlling financial
interest. The interpretation provides several scope
exclusions. The interpretation requires the consolidation of
VIEs by the primary beneficiary. The primary beneficiary is
the enterprise that will absorb or receive the majority of the
VIEs expected losses or residual returns, or both. The impact
of these changes on the Company is not expected to be
significant.



|18. |  | Comparative figures:
|--- |  | --------------------

Certain 2001 comparative figures have been reclassified to
conform to the financial statement presentation adopted for
2002.

53



---



##### 



MANAGEMENTS REPORT ON FINANCIAL STATEMENTS

The accompanying consolidated financial statements of Masonite
International Corporation are the responsibility of management and have
been prepared in accordance with Canadian generally accepted accounting
principles. The consolidated financial statements and information in the
MD&A include amounts based on informed judgments and estimates of the
expected effects of current events and transactions with appropriate
consideration of materiality. Other financial information in the annual
report is consistent with that in the consolidated financial statements.

Management maintains appropriate systems of internal control.
Policies and procedures have been designed to provide reasonable
assurance that transactions are appropriately authorized, assets are
safeguarded and financial records are properly maintained to ensure that
financial information is relevant and reliable. The Companys independent
auditors, KPMG LLP have audited and reported on the Companys
consolidated financial statements. Their report outlines the scope of
their examination and opinion on the consolidated financial statements.

The Audit Committee of the Board of Directors is composed of
unrelated directors and meets periodically with the independent auditors
and management representatives to review the consolidated quarterly and
annual financial statements, discuss internal accounting control, the
nature, extent and results of KPMG LLPs audits and other financial
reporting matters. The independent auditors have unrestricted access to
the Audit Committee. The Audit Committee reports its findings and makes
recommendations to the Board of Directors and is responsible for
re-appointing the independent auditors. The Board of Directors has
approved these financial statements

|                                                       |  |                                                               
|------------------------------------------------------ |  | --------------------------------------------------------------
|/s/ Philip S. Orsino                                   |  | /s/ Robert V. Tubbesing                                       
|                                                       |  |                                                               
|Philip S. Orsino
President and Chief Executive Officer |  | Robert V. Tubbesing
Vice President and Chief Financial Officer

February 13, 2003

54



---



##### 



AUDITORS REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Masonite
International Corporation as at December 31, 2002 and 2001 and the
consolidated statements of income, retained earnings and cash flows for
the years then ended. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally
accepted auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.

In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the Company
as at December 31, 2002 and 2001 and the results of its operations and
its cash flows for the years then ended in accordance with Canadian
generally accepted accounting principles.

/s/ KPMG LLP
KPMG LLP
Chartered Accountants

Toronto, Canada
February 13, 2003

55



---



##### 



DOCUMENT 3





---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION HAS BEEN PREPARED BY MANAGEMENT AND IS A REVIEW OF THE
COMPANYS FINANCIAL CONDITION AND RESULTS OF OPERATIONS BASED UPON CANADIAN
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. ALL AMOUNTS ARE IN UNITED STATES
DOLLARS UNLESS SPECIFIED OTHERWISE.

THIS DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONSOLIDATED FINANCIAL
STATEMENTS AND ACCOMPANYING NOTES. NOTE 17 TO THOSE STATEMENTS DESCRIBES
DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.

Overview of the BusinessMasonite International Corporation (Masonite
International or the Company) is the combination of one of the worlds
largest door manufacturers with one of the worlds largest manufacturers of
door components. This combination occurred on August 31st, 2001 with the
acquisition of Masonite Corporation (Masonite), a leading manufacturer of
door components, by Premdor Inc. (Premdor). On January 1st, 2002 Premdor
changed its name to Masonite International Corporation.

Masonite International Corporation is primarily engaged in the manufacture and
merchandising of doors, door components and door entry systems for sale to the
home improvement and home construction markets. Masonite International operates
over 70 facilities in 12 countries and has over 12,000 employees. The Company
sells its products to distributors, jobbers, home centre chains and wholesale
and retail building supply dealers worldwide.

The market demand for building products is determined by various factors
including general economic conditions, interest rates, levels of unemployment,
consumer confidence and the availability of credit. These factors influence the
demand for building products used in both new residential and commercial
construction and, to a lesser extent, affect building products usage in

(CONSOLIDATED SALES GRAPH)





---



##### 



home renovation, remodeling and repair. The pace of existing home
sales also affects the demand for building products used in home
renovation, remodeling and repair. A significant and growing
portion of the Companys sales of doors, door components and door
entry systems are used for home improvement and repair projects.

Masonite AcquisitionOn August 31st, 2001 Masonite International
completed the largest acquisition in its history with the purchase
of Masonite for $427.3 million. An agreement with the U.S.
Department of Justice that permitted the acquisition required a
post-closing divestiture of Masonites Towanda, Pennsylvania molded
door facing facility. The net assets of this facility were included
as part of Assets held for sale on the balance sheet at December
31, 2001.

The Towanda facility was sold on March 29, 2002.
In accordance with accounting guidelines in effect
at that time, no gain or loss was recorded on the
sale of this facility. The Masonite acquisition
was recorded using the purchase method of
accounting. Consequently, Masonites operating
results were included in the Companys financial
statements from the date of acquisition. Operating
results in 2001 and 2002 exclude any results
relating to the Towanda facility.

Results of OperationsConsolidated sales in 2002 increased 13.9%, or
$197.9 million, to approximately $1.62 billion from sales of $1.42
billion in 2001. This represents the highest level of revenue ever
reported by the Company. Over the last five years the Companys
revenues have doubled through a combination of acquisitions, gains
in market share and new product introductions. The Masonite
acquisition completed on August 31, 2001 accounted for approximately
45% of increased sales in 2002. Increased unit volume at existing
facilities primarily accounted for the balance of the year over year
sales increase. Revenue from customers in Masonite Internationals
two principal geographic markets, North America and Europe, was
approximately 81% and 19%, respectively, in 2002 compared to
approximately 83% and 17% in 2001. The proportion of the Companys
sales in North America decreased slightly from 2001 primarily
because a larger percentage of the incremental sales from the
Masonite acquisition were derived from customers outside North
America. The proportion of revenues from interior and exterior
products was approximately 66% and 34%, respectively, in 2002
compared to 65% and 35% in 2001. The slight increase of interior
product revenues is due to the inclusion of a full year of revenues
from the Masonite acquisition which consist entirely of interior
product sales.

(EBITDA GRAPH)

11



---



##### 



Cost of sales, expressed as a percentage of sales, was 77.4% in
2002, a decrease from 81.2% in 2001. The decrease in cost of sales,
as a percentage of revenues, was primarily attributable to the
following factors:



| |  | Operating results in 2001 included only four months of
operations from the newly acquired Masonite business. The
facilities acquired in the acquisition generally achieve higher
operating margins than the Companys historical operating margins;
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | An improvement in efficiencies in the Companys existing
(pre-acquisition) operations;                                                                                                                                                             
| 
| |  | Realization of benefits from integrating the Companys recently
acquired door facing facilities with its door manufacturing plants.                                                                                                                

Selling, general and administrative expenses
as a percentage of sales increased in 2002 to
9.5% from 8.7% in 2001. The increase in the
percentage is primarily because the majority
of sales of the acquired Masonite operations
are internal to other Company operating units
and therefore are eliminated upon
consolidation, whereas, the related
incremental selling, general and
administrative costs from the acquired
Masonite operations are not eliminated upon
consolidation. In addition, increases in
marketing costs were incurred to promote the
Masonite brand and product awareness in North
America.

Increasingly the investment and banking
industries calculate and analyze the
performance of a company using an EBITDA
measurement. The calculation of EBITDA* as a
percentage of sales for Masonite International
over the last five years is as follows:

|      |  |      |      |      |  |      |     |      |  |  |     |   |  |  |     |   |  |  | 
|----- |  | ---- | ---- | ---- |  | ---- | --- | ---- |  |  | --- | - |  |  | --- | - |  |  | 
|2002  |  | 2001 |      | 2000 |  | 1999 |     | 1998
|      |  |      |      |      |  |      |     |     
|13.0% |  |      | 10.1 | %    |  |      | 8.5 | %    |  |  | 9.6 | % |  |  | 8.1 | %



---

|* |  | Earnings before interest, gain (loss) on
refinancing, income taxes, depreciation and
amortization and non-controlling interest.
|- |  | -------------------------------------------------------------------------------------------------------------------------------

(EARNINGS PER SHARE GRAPH)

With the acquisition of Masonite, management believed that the
benefits to be achieved through vertical integration by combining
Premdor and Masonite were substantial. At the end of 2001,
management set a target of earning a 14% EBITDA margin by the end of
2004. This target represented approximately a 40% improvement over
the previous highest annual EBITDA ratio earned by the Company.
Masonite International earned a 13.0% EBITDA margin in 2002.
Management continues to believe that a 14% margin can be attained by
the end of 2004.

12



---



##### 



Depreciation and amortization expense increased $9.5 million in
2002 to $44.9 million from $35.4 million in 2001. This is slightly
higher than the $43.5 million that was estimated in the 2001
Management Discussion and Analysis. The rise in depreciation and
amortization is principally due to including for a full year in
2002 the additional fixed assets acquired as part of the Masonite
acquisition on August 31, 2001, as well as capital expenditure
programs undertaken during 2002 and 2001.

Interest expense increased approximately $11.3 million in 2002. The increase in
financing costs is largely due to additional bank debt incurred to finance both
the Masonite acquisition and growth in the Companys operations.

Debt extinguishment costs of $17.4 million were
incurred in 2001. This charge was principally the
result of the early repayment of $150 million of
senior unsecured notes. Repayment of the notes was
a requirement of the new bank financing agreement
undertaken to complete the Masonite acquisition.

The Company realized a net gain of $3.0 million in the third quarter of 2002 on
a further refinancing of its debt. This net gain was comprised of two
components, a $20.6 million gain on early extinguishment of Masonite
Internationals $125.6 million subordinated long-term debt that was settled for
$105.0 million, less a $17.6 million write off of financing fees associated
with amending the Companys senior secured credit facility. The agreement
amending the Companys senior secured credit facility that permitted the early
retirement of the subordinated debt also reduced interest rates on the facility
beginning August 1, 2002. The weighted average effective interest rates at
December 31, 2002 and 2001 on the Companys outstanding interest-bearing
indebtedness were approximately 6.2% and 7.4%, respectively. Assuming no
significant rise in short-term interest rates nor completion of any significant
acquisitions in 2003, Masonite Internationals interest costs are estimated to
decline to approximately $34.0 million from the $43.8 million incurred in 2002.

(NET INCOME GRAPH)



---

|(1) |  | Net income excluding the after-tax effect of gain (loss) on refinancing.
|--- |  | ------------------------------------------------------------------------
|   
|(2) |  | Net income excluding $9.5 million writedown.                            

Masonite Internationals effective income tax rate is primarily the
weighted average of federal, state and provincial rates in various
countries in which the Company has operations including the United
States, Canada, France, the United Kingdom and Ireland. The
combined effective rate of 22.3% in 2002 was relatively unchanged
from the effective rate in 2001. However, excluding the income tax
effect from refinancing charges in 2002, the Companys combined
effective income

13



---



##### 



tax rate was 24.3%. The slightly higher income tax rate in 2002 is
due to more taxable income being earned in higher rate
jurisdictions than in 2001. Management expects the Companys
combined effective income tax rate in 2003 to be approximately 24%
to 26%.

The Companys 2002 net income increased approximately $50.0 million
to $89.5 million ($1.70 per share) from $39.5 million in 2001 ($0.84
per share). Masonite Internationals 2002 net income is a record
level of profitability for the Company and is approximately double
the next highest level of net income reported in 1999. Basic
earnings per share of $1.70 in 2002 and $0.84 in 2001 are calculated
using the weighted average number of shares outstanding for the year
of 52.6 million and 46.8 million, respectively. Calculations of
diluted earnings per share of $1.65 in 2002 and $0.84 in 2001
reflect the dilution effect from the assumed exercise of options
where the exercise price was lower than the average market price of
the common shares for the reporting period. Approximately 3.7
million share options with an exercise price lower than the average
market price were outstanding at December 31, 2002 at prices ranging
from $5.26 to $14.11 per share. There were approximately 1.7 million
share options with an exercise price below the average market price
outstanding at December 31, 2001 at prices ranging from $5.04 to
$6.90. Additional information on the Companys stock option plan is
contained in Note 8 of the Consolidated Financial Statements.

The cumulative unrealized foreign currency translation loss of $0.7
million as at December 31, 2002, which is a component of
shareholders equity, almost completely reversed during 2002 from a
$37.4 million accumulated unrealized loss in the account at the
previous year end. The reduction in this balance during 2002 was
primarily the result of the strengthening of the euro and the U.K.
pound sterling compared to the Companys reporting currency, the
U.S. dollar. There was a corresponding net increase of
approximately $36.7 million of the translated value of the
Companys net investment in the assets and liabilities of
self-sustaining European operations.

Liquidity and Capital Resources

CAPITAL STRUCTURE COMPOSITION (%) As at December 31

|                            |  |      |       |      |  |      |       |   |  |  |       |  
|--------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                            |  | 2002 |       | 2001 |  | 2000
|                            |  |      |       |      |  |     
|Shareholders equity        |  |      | 45.4  | %    |  |      | 33.1  | % |  |  | 47.0  | %
|Non-controlling interest    |  |      | 2.3   |      |  |      | 2.3   |   |  |  | 3.3   |  
|Short-term debt             |  |      | 0.3   |      |  |      | 8.6   |   |  |  | 2.3   |  
|Long-term debt*             |  |      | 43.9  |      |  |      | 40.0  |   |  |  | 44.9  |  
|Subordinated long-term debt |  |      |      |      |  |      | 9.6   |   |  |  |      |  
|Future income taxes         |  |      | 8.1   |      |  |      | 6.4   |   |  |  | 2.5   |  
|                            |  |      |       |      |  |      |       |   |  |  |       |  
|                            |  |      | 100.0 | %    |  |      | 100.0 | % |  |  | 100.0 | %
|                            |  |      |       |      |  |      |       |   |  |  |       |  



---

|* |  | Includes current portion of long-term debt
|- |  | ------------------------------------------

15



---



##### 





| |  | Historically, the Company has funded its growth through a
combination of cash generated from operations, long-term bank debt
and other borrowings, and by the periodic issuance of common
shares.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During 2001 the Company raised additional common share equity and negotiated
new debt agreements to complete the acquisition of Masonite.

In August 2001, 7.15 million common shares were issued for net cash proceeds of
$63.2 million. A $685 million banking facility, consisting of a $100 million
long-term revolving bank loan of credit and three term loans that total $585
million, was finalized on August 31, 2001. As part of the acquisition of
Masonite, $113.5 million of unsecured subordinated notes were issued to the vendor that carried an interest rate of 11.25%.

As previously noted, the Company amended its
senior credit facility in the third quarter of
2002. The amended senior credit facility now
consists of a $100 million long-term revolving
bank loan and two term loans that total $550
million. Approximately $504 million of the two
term loans is outstanding at December 31, 2002.
The terms of the banking facility are contained in
Note 7 of the Consolidated Financial Statements.

Maintaining significant levels of liquidity and cash flow are important
components of the Companys financial strategy. During 2002, Masonite
International used $152.3 million of cash generated from operations, the cash
proceeds from asset sales of $103.1 (primarily the Towanda facility sale) and
the issuance of common shares for $10.1 million to fund net additions to
property, plant and equipment of $43.5 million, repay $188.0 million of debt,
fund acquisitions of $16.0 million and undertake additional other investing
activities of $21.9 million.

(TOTAL ASSETS GRAPH)

The Companys working capital ratio increased to 2.04:1.0 at
December 31, 2002 from 1.85:1.0 at December 31, 2001. The increase
in the ratio is primarily attributable to the reduction of $100
million of bank term debt that was repaid from the proceeds of
asset sales. This bank term debt had been classified as bank
indebtedness and formed part of current liabilities at December 31,
2001.

17



---



##### 



Revolving bank credit lines are maintained to ensure short-term
availability of funds. Masonite International and its subsidiaries
had approximately $121 million of revolving bank credit facilities
established at December 31, 2002. Approximately $3.8 million of the
Companys $21 million of current revolving bank lines was utilized
at the end of 2002 and was classified as current bank indebtedness.
Nothing was drawn at December 31, 2002 on the Companys $100 million
long-term revolving bank loan. The Company also had cash on hand of
$47.6 million as at December 31, 2002.

Information on the Companys debt maturities is
disclosed in Note 7 of the Consolidated Financial
Statements. The aggregate amount of long-term debt
repayment required over the next five years is
approximately $225 million as at December 31, 2002
compared to $153 million at December 31, 2001. The
increase in the required debt repayment of $72
million is from the inclusion for the first time
of $106 million of bank term loan debt that is due
December 31, 2007. Scheduled repayments of the
Companys senior secured bank term facility over
the next five years are approximately $196
million. Additional repayment of bank term loans
may be required depending upon the generation of
excess cash flow as defined in the credit
agreement.

One of the Companys principal objectives during
2002 was to repay a significant amount of the debt
outstanding at December 31, 2001. It was Masonite
Internationals intention to reach an interest
bearing debt to equity ratio of 1.0:1.0 by or
before December 31, 2004. We are pleased to report
that debt reduction primarily from the application
of cash generated from operations and from asset
sales during 2002 was sufficient to achieve an
interest bearing debt to equity ratio of 0.89:1.0
at December 31, 2002 from 1.66:1.0 at December 31,
2001. The Company has set a new goal of reaching a
debt to equity ratio of 0.6:1.0 by or before
December 31, 2004. Management anticipates that
cash flow from operations will provide the funds
to repay the remaining bank term loans at their
respective maturity dates.

(INTEREST GRAPH)



---

|* |  | Interest bearing debt, net of cash, divided by shareholders equity.
|- |  | --------------------------------------------------------------------

Masonite Internationals debt has been rated below investment grade
by Moodys and S&P as Ba2 and BB, respectively, with a stable
outlook. It is the Companys intention to obtain investment grade
status from both rating agencies at the earliest opportunity.
Achievement of investment grade status should permit Masonite
International to continue to improve borrowing terms.

19



---



##### 



(ROBERT V. TUBBESING PHOTO)

Robert V. TubbesingVice President and Chief Financial Officer

Management believes that its current cash balance
plus cash flows from operations are sufficient to
fund its near-term working capital and other
investment needs.

Capital InvestmentAdditions to property, plant and equipment in
2002 were $43.5 million compared to $30.5 million in 2001. This is
slightly higher than the range of $35 million to $40 million that
was estimated in the 2001 Management Discussion and Analysis. The
increase of $13.0 million is primarily from including the acquired
Masonite facilities for the full year in 2002. Capital expenditures
in 2002 consisted primarily of purchases of manufacturing machinery
and equipment. The Company continues to invest in its manufacturing
operations to increase productivity, improve customer service and
introduce new products.

Capital expenditures in 2003 are expected to range from $40 million
to $45 million. Depreciation expense on plant and equipment
increased to $42.4 million in 2002 from $29.6 million in 2001 due
to the Masonite acquisition and the capital expenditure programs in
2002 and 2001. Depreciation for 2003 is estimated to be in a range
of $47 million to $48 million.

Business Risks and UncertaintiesMasonite Internationals strategic
focus is to expand and strengthen its core business of the
manufacture and sale of doors and door components. A market
strategy that specializes in a relatively narrow product line in
the building products industry may amplify the risks inherent in
the general effect of economic cycles on residential construction
and remodeling. The Company has addressed this risk by broadening
its customer base within various markets and by expanding market
coverage through geographic diversification. During the 1990s, the
Company acquired numerous facilities in France and the United
Kingdom. The completion of the Masonite acquisition has added
operations in Ireland, South Africa and South Korea. The Companys
2002 annual sales outside North America exceeded $250 million.

The Masonite International group of companies obtains labor and
certain raw materials locally, denominated primarily in their
respective domestic currencies. Other raw materials are imported and
prices are often quoted in U.S. dollars or in the domestic currency
in the country where the facility operates. The Company and most of
its subsidiaries sell a significant portion of their products within
their respective domestic markets at domestic market selling prices.
In situations where import or export commitments are undertaken, the
Company or its subsidiaries may periodically enter into foreign
exchange contracts to manage and reduce the risk associated with
foreign currency fluctuations. Gains and losses on such contracts
offset losses and gains on transactions being hedged. The amount of
foreign exchange contracts matches estimated foreign

21



---



##### 



currency risks over a specified period of time. The amount of
foreign exchange contracts outstanding at December 31, 2002 are
described in Note 1(m) of the Consolidated Financial Statements.
Also described in Note 1(p) of the Consolidated Financial Statements
is an accounting guideline issued by the Canadian Institute of
Chartered Accountants in November 2001 which established new
criteria for hedge accounting that will apply to all hedging
relationships in effect for fiscal years commencing on or after July
1, 2003. The Companys policy is not to utilize financial
instruments for trading or speculative purposes. Masonite
International intends to ensure that all current hedging
relationships will be documented in order to meet the new hedge
accounting criteria prior to January 1, 2004.

The Companys Consolidated Financial Statements are reported in
U.S. dollars. However, Masonite International derives approximately
31% of its sales from customers outside the United States. The
sales and operating results from non-U.S. Masonite International
entities are transacted and reported in various local currencies,
principally Canadian dollars, U.K. pound sterling and euros. The
Companys consolidated operating results may be affected by a
significant movement in the exchange rates of these various
currencies compared to the U.S. dollar.

Management believes that the Company presently does not face a material foreign
currency risk.

Almost 100% of the Companys interest-bearing debt outstanding at
December 31, 2002 carried a floating interest rate. In the normal
course of business Masonite International is exposed to changes in
short-term interest rates that create uncertainty and variability in
its cash flows. To mitigate this exposure, in September 2001 the
Company entered into a five-year interest rate swap agreement
converting a notional $250 million of floating rate debt into fixed
rate debt that currently bears interest at 7.96%. In August 2002,
another five-year interest rate swap agreement was executed
converting an additional $75 million of amortizing floating rate
debt into a fixed rate debt at 5.72%. After giving effect to these
interest rate swaps, approximately 40% of the Companys outstanding
interest bearing debt carries a floating interest rate and the other
60% is effectively at fixed rates. Management believes that these
interest rate swaps are highly effective in achieving their economic
purpose. However, under U.S. GAAP such instruments are required to
be marked-to-market regardless of the economic effectiveness of the
hedging relationship and can result in reconciling differences
between Canadian and U.S. GAAP.

(PIE CHARTS)

23



---



##### 



Certain commodity components used in the manufacture of doors and
door components periodically experience significant changes in price
or availability. If material cost increases are persistent, there is
no assurance that Masonite International will be able to
sufficiently increase its selling prices. In recent years, the
Company has responded to fluctuating prices and decreasing
availability of certain materials by seeking sources for similar
components from other geographic regions, developing or purchasing
substitute alternative materials and raising selling prices on
various products in certain markets.

The geographic breadth of the Companys facilities
subjects it to environmental laws, regulations and
guidelines in a number of countries. Such laws,
regulations and guidelines relate to, among other
things, the discharge of contaminants into water
and air and onto land, the storage and handling of
certain regulated materials used in the
manufacturing process, and the disposal of wastes.

The Companys efforts to ensure environmental
compliance include the review of its existing
operations on an ongoing basis by its own
environmental staff and on a selective basis by
external environmental consultants. In addition,
environmental assessments are conducted as part of
Masonite Internationals due diligence review
prior to completion of acquisitions.

Masonite International has not incurred any
significant costs relating to environmental
matters in prior years. Future expenditures
required to comply with any changes in
environmental requirements are anticipated to be
undertaken as part of the Companys ongoing
capital investment program that is primarily
designed to improve the efficiency of various
manufacturing processes.

Masonite International provides credit to its customers in the
normal course of business. The Company performs credit evaluations
of its customers and maintains reserves for potential credit losses
which, when realized, have been within the range of managements
expectations. Masonite International does not generally require
collateral. The Companys credit risk is minimized by undertaking
transactions with a large number of customers in various countries.
Masonite Internationals credit risk is further minimized through
the use of trade credit insurance.

(SHAREHOLDERS' EQUITY GRAPH)

Accounting PoliciesIn August 2001, The Canadian Institute of
Chartered Accountants (The CICA) issued accounting guidelines on
Goodwill and Other Intangible Assets.

25



---



##### 



Beginning January 1, 2002, Masonite International ceased amortizing
goodwill that was acquired before July 1, 2001. In accordance with
the new guidelines, the Company performed transitional and annual
impairment tests that indicated that there was no impairment of
goodwill or other intangibles. The amount of goodwill amortized in
the Companys 2001 consolidated statement of income was $4.8
million. Further discussion of this accounting guideline is
contained in Note 1(f) of the Consolidated Financial Statements.

In accordance with provisions of the accounting guidelines,
goodwill acquired as part of the Masonite acquisition on August 31,
2001 was not amortized during the four-month period ended December
31, 2001.

Effective January 1, 2002 the Company adopted new CICA guidelines
regarding stock-based compensation and other stock-based payments.
This guideline established new standards for the recognition,
measurement and disclosure of stock-based compensation. The
guideline requires additional disclosure for options granted to
employees but did not require any change to the Companys existing
accounting policy for the granting of stock options to employees.
Additional details on this new accounting guideline are contained in
Notes 1(n) and 8 to the Consolidated Financial Statements.

In February 2003, the CICA issued Accounting Guideline 14,
Disclosure of Guarantees. This guideline requires that a guarantor
disclose significant information about certain types of guarantees.
The Company does not anticipate that this new guideline will have a
significant effect on its accounting or disclosure.

There were also certain other new pronouncements issued by the CICA
and the Financial Accounting Standards Board in the United States
that are described more fully in Notes 1(p) and 17 to the
Consolidated Financial Statements. The adoption of these other
guidelines is not expected to have a significant effect on the
Companys accounting policies or disclosure practices.

Forward-Looking StatementsThis Annual Report contains a number of
forward-looking statements. All statements, other than statements
of historical fact, included in this Annual Report that address
activities, events or developments that the Company or its
management expects or anticipates will or may occur in the future
are forward-looking statements. They are based on certain
assumptions and analyses made by the Company considering its
experience and perceptions of historical trends, current conditions
and expected future

27



---



##### 



developments, as well as other factors it believes are appropriate
in the circumstances. However, whether actual results or
developments will conform with the expectations and predictions of
the Company and its management is subject to a number of risks and
uncertainties, including: general economic, market and business
conditions; levels of construction and renovation activity;
competition; financing risks; ability to manage expanding
operations; retention of key management personnel; environmental and
other government regulation; and other factors.

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

(U.S. dollars in thousands, except per share data)

|                                                |  |               |         |                |  |      |         |      |  |   |         |  |  |   |         | 
|----------------------------------------------- |  | ------------- | ------- | -------------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                                |  | First Quarter |         | Second Quarter
|                                                |  |               |         |               
|                                                |  | 2002          |         | 2001           |  | 2002 |         | 2001
|                                                |  |               |         |                |  |      |         |     
|Sales                                           |  | $             | 380,571 |                |  | $    | 320,079 |      |  | $ | 415,457 |  |  | $ | 360,585 | 
|Net income
for the period                       |  | $             | 16,112  |                |  | $    | 8,660   |      |  | $ | 22,046  |  |  | $ | 13,098  | 
|Net income per share
for the period, basic(2)   |  | $             | 0.31    |                |  | $    | 0.20    |      |  | $ | 0.42    |  |  | $ | 0.30    | 
|Net income per share
for the period, diluted(2) |  | $             | 0.30    |                |  | $    | 0.20    |      |  | $ | 0.41    |  |  | $ | 0.30    | 
|                                                |  |               |         |                |  |      |         |      |  |   |         |  |  |   |         | 

|                                                |  |                  |         |                |  |      |         |      |  |   |         |  |  |   |         | 
|----------------------------------------------- |  | ---------------- | ------- | -------------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|                                                |  | Third Quarter(1) |         | Fourth Quarter
|                                                |  |                  |         |               
|                                                |  | 2002             |         | 2001           |  | 2002 |         | 2001
|                                                |  |                  |         |                |  |      |         |     
|Sales                                           |  | $                | 427,680 |                |  | $    | 362,933 |      |  | $ | 395,808 |  |  | $ | 378,005 | 
|Net income
for the period                       |  | $                | 29,176  |                |  | $    | 3,849   |      |  | $ | 22,209  |  |  | $ | 13,853  | 
|Net income per share
for the period, basic(2)   |  | $                | 0.55    |                |  | $    | 0.08    |      |  | $ | 0.42    |  |  | $ | 0.27    | 
|Net income per share
for the period, diluted(2) |  | $                | 0.53    |                |  | $    | 0.08    |      |  | $ | 0.40    |  |  | $ | 0.27    | 
|                                                |  |                  |         |                |  |      |         |      |  |   |         |  |  |   |         | 



---

|(1) |  | Net income for 2002 includes a net gain on refinancing
of $2,990 and 2001 includes debt extinguishment costs of
$17,370.                                                                                   
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | The sum of basic and diluted earnings per share for the four
quarters may differ from the basic and diluted earnings per share
for the year due to differences in the average number of shares
outstanding.
|   
|    |  | 2002 financial results exclude goodwill amortizations.                                                                                                                                                     

28



---



##### 



DOCUMENT 4





---



##### 



|     |  |                                                                                                         |  |                                                          
|---- |  | ------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------
|kpmg |  |                                                                                                         |  |                                                          
|     |  | KPMGLLPChartered Accountants
Yonge Corporate Centre
4100 Yonge Street, Suite 200
North York, ON M2P 2H3 |  | Telephone (416)228-7000
Telefax (416)228-7123
www.kpmg.ca

COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA  U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition of
an explanatory paragraph (following the opinion paragraph) when there is a
change in accounting principles that has a material effect on the comparability
of the companys financial statements, such as the changes described in Note
1(e)(impairment of long-lived assets), and Note 1(f) (amortization of
goodwill), to the consolidated financial statements as at December 31, 2002 and
2001 and for the years then ended. Our report to the shareholders dated
February 13, 2003 is expressed in accordance with Canadian reporting standards,
which does not require a reference to such changes in accounting principles in
the auditors report when the change is properly accounted for and adequately
disclosed in the financial statements.

/s/ KPMG LLP

Toronto, Canada
February 13, 2003





---



##### 



UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking

The Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when required to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.

B. Consent to Service of Process

The Registrant has previously filed with the Commission a Form F-X.

EXHIBITS

The following exhibits are filed as part of this report:

|        |  |                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                
|Number  |  | Title                                                                                                                                                          
|        |  |                                                                                                                                                                
|1.      |  | Consent of KPMG LLP                                                                                                                                            
|       
|2.      |  | Certification pursuant to Title 18, United States Code,
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Philip S. Orsino)   
|       
|3.      |  | Certification pursuant to Title 18, United States Code,
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Robert V. Tubbesing)





---



##### 



SIGNATURE

Pursuant to the requirements of the Exchange Act, the Registrant certifies
that it meets all of the requirements for filing on Form 40-F and has duly
caused this annual report to be signed on its behalf by the undersigned,
thereto duly authorized.

|            |  |                                    |  |                                                                                
|----------- |  | ---------------------------------- |  | -------------------------------------------------------------------------------
|            |  | MASONITE INTERNATIONAL CORPORATION
|            |  |                                    |  |                                                                                
|May 7, 2003 |  | By:                                |  | /s/ Harley Ulster                                                              
|            |  |                                    |  |                                                                                
|            |  |                                    |  | Harley Ulster
Executive Vice President, General Counsel
and Corporate Secretary





---



##### 



CERTIFICATION

I, Philip S. Orsino, certify that:



|1. |  | I have reviewed this annual report on Form 40-F of Masonite
International Corporation;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this annual report;                   
|  
|4. |  | The Registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
have:                                                                                                   



| | a) |  | designed such disclosure controls and procedures
to ensure that material information relating to the
Registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly
during the period in which this annual report is being
prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the Registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the
Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The Registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrants auditors and the
audit committee of Registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or
operation of internal controls which could adversely affect
the Registrants ability to record, process, summarize and
report financial data and have identified for the Registrants
auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in
the Registrants internal controls; and                                                                                                                                        



|6. |  | The Registrants other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated: May 7, 2003.

/s/ Philip S. Orsino

Philip S. Orsino
President and Chief Executive Officer





---



##### 



CERTIFICATION

I, Robert V. Tubbesing, certify that:



|1. |  | I have reviewed this annual report on Form 40-F of Masonite
International Corporation;                                                                                                                                                                                                                                  
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this annual report;                   
|  
|4. |  | The Registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
have:                                                                                                   



| | a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the Registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this annual report is being prepared;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the Registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                                  
|
| | c) |  | presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The Registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrants auditors and the
audit committee of Registrants board of directors (or persons
performing the equivalent function):
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the
Registrants ability to record, process, summarize and report
financial data and have identified for the Registrants auditors
any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Registrants internal controls; and                                                                                                                                        



|6. |  | The Registrants other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated: May 7, 2003.

/s/ Robert V. Tubbesing

Robert V. Tubbesing
Vice President and Chief Financial Officer





---



##### 



EXHIBIT INDEX

|       |  |                                                                                                                                                                
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Document                                                                                                                                                       
|       |  |                                                                                                                                                                
|1.     |  | Consent of KPMG LLP                                                                                                                                            
|      
|2.     |  | Certification pursuant to Title 18, United States Code, Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Philip S. Orsino)   
|      
|3.     |  | Certification pursuant to Title 18, United States Code, Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Robert V. Tubbesing)