29th January 2005

M.F.R. MANAGEMENT RESOURCES

No. 16A, Jalan USJ 11/3J,
Subang Jaya,
47610 Selangor DE
(Attention: En. Rosmi bin Abdul)

Dear Sir,

LABOUR SUPPLY CONTRACT FOR CUTTING / SORTING,

PRINTING ETC. OF CELLULOSE FIBER CEMENT PRODUCTS
We refer to your participation in the above tender and are pleased to inform you
that you have been awarded the contract based on approved Contract Rates as
per Appendix B attached.

The terms and conditions of your appointment shall be as follows:

1. Scope of Contract

(a) The Contractor shall source for supply and contract workers to the
Company at its Kanthan factory for cutting / sorting / recovery /
cleaning and blowing / transfer WIP from steel pallets etc. of cellulose
fibre cement sheets on piece meal payment for such quantities of
products as the Company may require from time to time.

2. Supply of Workers

(a) The Contractor shall supply on a daily basis save for the closure days
whom the Contractor will be notified in advance the labour
requirements as specified in Appendix A attached (Manpower,
Working Hours & Target Requirement List) to work at the factory
premise.

(b) The Contractor shall engage and employ the workers supplied in own
name in accordance with the Employment Act and other relevant laws
in Malaysia. The Company shall not bear nor be deemed to be a
principal or employer of the workers and shall not be deemed to have
any legal/contractual obligations or liabilities to the workers.

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 (c) The Contractor shall bear the cost of remunerating its workers
including their salary, overtime, allowances, incentives, statutory
contributions and any other payments due to them while under the
Contractor’s employment.

(d) The Contractor may vary the number of workers below or above the
specified requirement but could only be done with the prior approval
of the Company in writing. The Company shall not be liable for any
costs or compensation whatsoever to the Contractor, the workers or
any other party for such increase or reduction of manpower required.

(e) In the event the Company suffer any losses including loss of output or
sales due to insufficient, incompetence, non-performance of the
workers supplied, the Company reserves the right to terminate this
contract and right to claim against the Contractor.

3. Operating Hours for Day & Shift Workers

(a) The working days and normal operating hours for days and shift
workers will be fixed in accordance with the Company’s requirement.

(b) The Contractor must ensure that a system exists to allow its workers
to be given the necessary rest day and periods of breaks for rest and
meals.

4. Terms of Payment

(a) The Company shall pay to the Contractor on a piece meal basis the
agreed contract rates as per Appendix B (Contract Rates) attached.

(b) The Contractor shall submit his monthly claims supported by

company verified completed quantities of work in an invoice by the 7th
of the following month. On receipt of the invoice, the Company shall
process and pay the Contractor within 30 days from the date of
receipt of invoice.

(c) In substantiating the monthly claims, the Contractor shall also prepare
and provide progressive summary report on all the chargeable cost or
expenses on weekly basis to the Company.

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5. Contract Period

(a) The Contract shall be for a term of twenty-four (24) months

commencing 2nd February 2005 and is continue in force up to 1st
February 2007. During this period, the agreed Contract Rates will
remain unchanged unless the Company by agreement with the
Contractor agrees to vary this in writing.

(b) During the contract period, the Company reserves the right to
withdraw and delete any of the services contracted. No claim for loss
of profit or cost on disruption of works or any other losses shall be
allowed. In the event of such withdrawal, this shall not relieve the
Contractor of any obligation in the Contract.

6. Insurance

(a) The Contractor shall effect, at its own cost, the relevant mandatory
social insurance scheme i.e. SOCSO. If necessary the Contractor
can additionally effect other private insurance policies such as Public
Liability, Contractor’s all Risks and Workmen Compensation to the
value of RM50,000 for each policy to the satisfaction of the Company.

7. Identity of Workers & Work Permits

(a) The Contractor must ensure that all workmen and employees
employed by the Contractor for this Contract are age between 18
years to 55 years and be either Malaysians or if they are non-
Malaysians shall possess a valid work permit issued by the relevant
authorities. The Contractor shall provide a full list of all its workers
with photocopies of their Identity Cards for Malaysians and Passport
and work permits for non-Malaysians. The Contractor shall ensure
that such work permits are maintained at all times.

(b) The Contractor shall provide a latest full list of all its workers with
photocopies of their Identity Cards and to be submitted to the
Company for verification.

(c) Under no circumstances shall any illegal immigrants or foreign

workers without valid work permits be allowed on the Company’s
premises at any time. The Contractor shall indemnify the Company
against any loss, damages, fines, penalties incurred or suffered by the
Company in the event of any proceedings claims or demand against
them in contravention of any applicable laws and regulations.

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8. Indemnity and Set-off / Withholding of Payment

(a) The Contractor shall be liable for any loss direct or indirect and
consequential loss and damages (including loss of profits, damage to
Company’s property and liability to third parties) as a result of any
default or negligence of the Contractor and/or any act omission and
negligence of its workers.

(b) The Company shall be entitled to set-off and deduct such costs,
expenses, losses and damages suffered from any payments due to
the Contractor.

9. Discipline & Industrial Harmony

(a) The Contractor must ensure regular and punctual attendance of its
workers. The use of time recording cards (punchcards) at the
expense of the Contractor shall be in place to monitor attendance of
its workers. Any absenteeism due to whatsoever reasons must be
replaced immediately.

(b) The Contractor must preserve and maintain harmonious relations of

its workers and with the Company’s employees. The Company
reserves the right to request the Contractor to change any of its
workers in the event they have committed any misconduct and in
breach of any of the Company’s rules and regulations.

10. Supervision of Workers

(a) The Contractor must appoint a supervisor or supervisors to act as the

Contractor’s representative(s) who shall among others be present
daily and be responsible in organizing and allocating, controlling
quality, maintaining discipline of the workers, recording and daily
submitting to the Company’s representative a list of all works
completed and cost incurred by the workers.

11. Productivity & Rejects

(a) The Contractor shall ensure that the workers are provided the
necessary training and carry out their duties in accordance with the
Standard Operating Procedures and Work Instructions issued to them
by the Company.

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 (b) The Contractor shall ensure that its workers are competent and
diligent in carrying out their duties to ensure maximum production
output and minimum rejects at all times.

(c) In the event goods handled by the Contractor’s workers are returned
and rejected by the Company’s customers and found to be due to the
negligence or carelessness of the Contractor’s workers, the Company
shall be entitled to set-off and deduct such claims, costs and
expenses suffered by the Company from any payments due to the
Contractor.

(d) The Contractor shall ensure that cleanliness and good housekeeping
is maintained at all times while working in the Company premises.

12. Safety and Security

(a) The Contractor shall ensure that his workers observe the Company’s
safety regulations and perform their tasks in a manner as to ensure
their safety at all times.

(b) The Contractor shall at his own expense provide and maintain
uniform, personal protective equipment and safety apparels to be
worn by the workers in the conduct of their duties. The safety
standards must conform to the prevailing Occupational Safety and
Health Act.

(c) The Contractor and its workers shall ensure the security and
safekeeping of materials, equipment, machinery, tools etc. provided
by the Company to the workers.

(d) The Contractor and its workers shall ensure that their place of work is
properly maintained including the clearing of any remnant materials
for disposal by the Company.

(e) While handling industrial vehicles such as forklifts, the Contractor

must observe all rules in terms of routine inspection, refuelling etc as
well as providing sufficient number of workers to drive the forklift.

(f) In the event of forklift shortage, priority is to be given to the

operational requirements of the Company in carrying out its day-to-
day operations.

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13. Duty of Company

(a) To supply the products to the Contractor for all processes as specified
in clause 1(a).

(b) To provide the facilities including the cutting machines, pallet,

strapping, packing materials, painting equipment and any other
equipment or tools deemed necessary by the Company for the
workers to carry out their duties;

(c) To maintain the machinery and to carry out any repair works with the
aim of resuming production as swiftly as possible.

(d) To permit the Contractor and his workers to enter the Company’s
premises for the purpose of carrying out their duties.

(e) To provide the Contractor and his workers with work instructions, work
schedules, product standard or any other document as may be
necessary for them to carry out their duties.

14. Confidentiality

(a) The Contractor shall undertake and ensure that its workers do not
divulge any technical or confidential information of the Company and
be responsible for any loss and damage to the Company due to
breach of confidentiality.

15. Extension of Contract

(a) If the Contractor is desirous of extending this Contract at its expiry for
a further term, he shall give notice to the Company at least three (3)
months before expiry of Contract on such terms as may be mutually
agreed upon.

16. Contract Document

(a) The document incorporated in this Contract shall comprise:-

i) Tender Document relating to this Contract;
ii) All correspondence with the Company;
iii) All related layout plan, drawings/photos & specifications.

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 (b) In the absence of a formal contract, this letter and the documents
referred above shall constitute the Contract Documents.

Please confirm your agreement to the above by signing and returning to us

duplicate hereof.

Thank You

Yours sincerely,
HUME CEMBOARD INDUSTRIES SDN BHD

We hereby agree to the above

STEVE YAP PENG LEONG appointment
MANAGING DIRECTOR

cc. GM, HCI SBD

FM-SBD ………………………………………………...
Plant Manager HCI-PB ( )

Director, __________________________

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 APPENDIX A

MANPOWER, WORKING HOURS & TARGET REQUIREMENT LIST

Working Total Daily Targeted

Machines/Area Manpower Shifts
Hours Manpower Output
Planks machine 6 1 12 6 2000pcs
Cross table 4 1 12 4 2500pcs
Plank Sorting 4 1 12 4 2400pcs
Reworks 4 1 12 4 18 pallets
Recovery 4 1 12 4 15 tons
6.0mm board sorting 6 1 12 6 1280pcs
Forklift drivers 1 1 12 1
Total 29

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 APPENDIX B
CONTRACT RATES

Pieces Tons per

Area Sub-Process / Product Type RM
Per Stack Stack
BY PIECE RATE
A Cutting WIP

1 Plank - Woodgrain/Smooth (WG/S)

230 x 4200 x 7.5 mm 120 1.26 0.300
230 x 4200 x 7.5 mm 60 0.63 0.300
300 x 4200 x 7.5mm 120 1.64 0.300

2 Cedar Plank
209 x 3660 x 7.5mm 250 2.00 0.300

B Sorting Plank (WJ)

1 Plank - Woodgrain/Smooth (WG/S)
230 x 4200 x 7.5mm 120 1.26 0.190
60 0.63 0.190
300 x 4200 x 7.5mm 120 1.64 0.190

2 Cedar Plank
209 x 3660 x 7.5mm 250 2.00 0.190

C Off Cut from FGS Product

1 6' to 10' length 60 1.40 0.660
2 > 10' length 60 2.30 0.830

D Recovery
Finished size
1 IPF 150 x 1200 x 3.2mm 1000 0.77 0.060
2 IPF 150 x 1200 x 4.5mm 600 0.68 0.060
3 IPF 150 x 2400 x 4.5mm 600 1.36 0.060
4 IPF 450 x 2400 x 4.5mm 120 0.81 0.500
5 IPF 600 x 2400 x 4.5mm 120 1.09 0.500
6 IPF 603 x 1213 x 3.2mm 500 1.56 0.120
7 IPF 603 x 1213 x 4.5mm 300 1.40 0.120
8 IPF 603 x 1213 x 6.0mm 150 0.92 0.120
9 IPF 610 x 1220 x 4.5mm 300 1.40 0.120
10 IPF 610 x 1220 x 6.0mm 150 0.94 0.120

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 Pieces Tons per
Area Sub-Process / Product Type RM
Per Stack Stack
D Recovery
Finished size
11 IPF 600 x 1200 x 9.0mm 120 1.09 0.120
12 IPF 1220 x 2440 x 6.0mm 100 2.51 0.500
13 WG/S 230 x 3660 x 7.5mm 120 1.10 0.500
14 WG/S 300 x 3660 x 7.5mm 120 1.43 0.500
15 Cedar 209 x 3050 x 7.5mm 250 1.66 0.500
16 IPF 1200 x 1800 - 2700 x 4.5mm 60 1.20 0.500
17 IPF 1200 x 1800 - 2700 x 6.0mm 60 1.45 0.500
18 IPQ 1200 x 1800 - 2700 x 6.0mm 60 1.50 0.500
19 IPF 900 x 1800 - 2700 x 4.5mm 60 1.00 0.500

E Sorting Rework Stack

1 1200 x1800 x 4.5mm 60 0.82 0.330
2 1200 x 2100 x 4.5mm 60 0.95 0.330
3 1200 x 2400 x 4.5mm 60 1.09 0.330
4 1220 x 2440 x 4.5mm 120 2.25 0.330
5 1200 x 2700 x 4.5mm 60 1.22 0.330
6 1200 x 3000 x 4.5mm 60 1.36 0.330
7 1200 x 1800 x 6.0mm 60 1.09 0.330
8 1200 x 2100 x 6.0mm 60 1.27 0.330
9 1200 x 2400 x 6.0mm 60 1.46 0.330
10 1220 x 2440 x 6.0mm 100 2.51 0.330
11 1200 x 2700 x 6.0mm 60 1.64 0.330
12 1200 x 3000 x 6.0mm 60 1.82 0.330
13 1200 x 3600 x 6.0mm 60 2.27 0.330
14 1200 x 4200 x 6.0mm 60 2.65 0.330
15 1200 x 2440 x 7.5mm 50 1.59 0.330
16 1200 x 2725 x 7.5mm 50 1.77 0.330
17 1200 x 3000 x 7.5mm 50 1.95 0.330
18 1200 x 2400 x 9.0mm 43 1.56 0.330
19 1220 x 2440 x 9.0mm 50 1.87 0.330
20 1200 x 3000 x 9.0mm 50 2.26 0.330
21 1200 x 2400 x 12.0mm 30 1.46 0.330
22 1220 x 2440 x 12.0mm 30 1.51 0.330
23 1220 x 3050 x 12.0mm 30 1.88 0.330
24 600 x 2400 x 4.5mm 120 1.09 0.330
25 450 x 2400 x 4.5mm 120 0.82 0.330

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 Pieces Tons per
Area Sub-Process / Product Type RM
Per Stack Stack
E Sorting Rework Stack
26 750 x 2400 x 4.5mm 60 0.68 0.330
27 900 x 1800 x 4.5mm 60 0.61 0.330
28 900 x 2100 x 4.5mm 60 0.71 0.330
29 900 x 2400 x 4.5mm 60 0.82 0.330
30 900 x 2700 x 4.5mm 60 0.92 0.330
31 900 x 3000 x 4.5mm 60 1.02 0.330
32 900 x 1800 x 6.0mm 60 0.82 0.330
33 900 x 2100 x 6.0mm 60 0.96 0.330
34 900 x 2400 x 6.0mm 60 1.09 0.330
35 900 x 2700 x 6.0mm 60 1.23 0.330
36 900 x 3000 x 6.0mm 60 1.37 0.330
37 900 x 3600 x 6.0mm 60 1.70 0.330
38 900 x 4200 x 6.0mm 60 1.99 0.330
39 900 x 2440 x 7.5mm 50 1.19 0.330
40 900 x 2725 x 7.5mm 50 1.33 0.330
41 900 x 3000 x 7.5mm 50 1.46 0.330
42 900 x 1800 x 3.2mm 150 1.04 0.330
43 900 x 2400 x 3.2mm 150 1.39 0.330
44 900 x 2700 x 3.2mm 150 1.56 0.330
45 900 x 3000 x 3.2mm 150 1.73 0.330
46 610 x 1220 x 3.2mm 500 1.59 0.180
47 1220 x 1220 x 3.2mm 250 1.59 0.180
48 603 x 1213 x 3.2mm 500 1.57 0.120
49 610 x 1220 x 4.5mm 300 1.40 0.120
50 1220 x 1220 x 4.5mm 150 1.40 0.180

F Clean/Blowing Plank
1 209 x 3660 x 7.5mm 250 2.00 0.018
2 230 x 4200 x 7.5mm 120 1.26 0.030
3 230 x 4200 x 7.5mm 60 0.63 0.060
4 300 x 4200 x 7.5mm 120 1.64 0.030

G Transfer WIP from Steel Pallet

Woodgrain/Smooth (WG/S)
1 230 x 4200 x 7.5mm 300 3.14 0.048
2 300 x 4200 x 7.5mm 240 3.28 0.048
3 Cedar Plank 209 x 3660 x 7.5mm 300 2.40 0.048

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