Vetting of photocopies of the executed Security Documents A/C. Lafarge Surma Cement Limited
Our Ref: LJ/PJ/09/2007                                                    Dated: September 30, 2007
Mr. AAssistant Manager

Address____________

 Mr. BSenior Manager

Address____________

Dear Sir,

RE:     Vetting of photocopies of the executed Security Documents A/C. Lafarge Surma Cement Limited

We refer to your letter dated September 19, 2007 in connection to the captioned subject.

We have perused the contents of your letter and other papers/documents attached therewith. Our comments on the same are given below.

The following Documents of Lafarge Surma Cement Limited are required under the Banking Facility Letter dated February 01, 2007 and its subsequent addendums dated February 01, 2007 and March 12, 2007 (“Facility Letters”):

1.                  Demand Promissory Note and Letter of Continuation for BDT 2,300,000,000 from Company 1:

In order.

However, please note that, according to the Banking Facility Letter dated February 01, 2007, Demand Promissory Note and Letter of Continuation for BDT 2,150,000,000 is one of the securities against the facility and according to the addendum dated March 12, 2007, Demand Promissory Note and Letter of Continuation for BDT 2,300,000,000 is supposed to be an additional security to the existing ones. Please check whether the Demand Promissory Note and Letter of Continuation for BDT 2,300,000,000 is an additional security or whether it is supposed to replace the previous ones for BDT 2,150,000,000.

2.  Demand Promissory Note and Letter of Continuation for BDT 500,000,000 from Company 2(dated 27.11.2005):

In order.

3.   Demand Promissory Note and Letter of Continuation for BDT 50,000,000 from Company 3:

The Demand Promissory Note and Letter of Continuation provided to us are for lesser amounts i.e. for BDT 450,000.00. Demand Promissory Note and Letter of Continuation for BDT 50,000,000 has to be obtained from Company 3 in accordance with the Facility Letters.

4.  Registered charge over fixed and floating assets of Company 1. on pari passu basis with other lenders. Standard Chartered Bank’s share being not less than BDT 500,000,000 (dated 12.07.2004):

The provided Deed of Hypothecation (on Fixed and Floating Assets) dated July 12, 2004 covers Tk. 500,000,000 which was taken as loan by Company 1. under the loan agreement dated 05 January 2002. The said deed of Hypothecation, in the absence of any modification, does not cover Tk. 500,000,000 under the new Banking Facility Letter dated February 01, 2007. Please check whether or not the necessary modification has been made to the Deed of Hypothecation.

5. Letter of Commitment from Financere Lafarge for BDT 350,000,000 till the financial completion of the project. (dated 07.07.2004):

In order.

6.   Agreement and indemnity relating to the issuance of documentary credits from Company 1. and Company 2.:

In order.

7. Board Resolution of Company 1. covering the entire facility and to allow inter-avail facilities to Company 2. & Company 3:

Board Resolution of Company 1. dated February 05, 2007 has been provided. In the said Board resolution the terms and conditions of the Banking Facility Letter are approved. However, from the said Board Resolution it is not clear as to which Banking Facility Letter is referred to. We suggest the Bank to obtain a Board Resolution of Company 1., which specifically refers to the Banking Facility Letter by date, approves the entire facility under the Banking Facility Letter dated February 01, 2007 and allows Company 2. and Company 3 to inter-avail facilities.

8.    Board Resolution of Company 2. to avail inter-avail facilities from Company 1:

The provided Board Resolution of Company 2is dated 05 January 2006 and refers to the Facility Letter dated November 23, 2005. A new Board Resolution of Company 2has to be obtained which refers to the Banking Facility Letter dated February 01, 2007 and any modifications thereof.

9.  Board Resolution of Company 3. to avail inter-avail facilities from Company 1:

The provided Board Resolution of Company 3 is dated 26 October 2000 and does not refer to any specific Facility Letter. A new Board Resolution of Company 3 has to be obtained which refers to the Banking Facility Letter dated February 01, 2007 and any modifications thereof.

10. Certified copy of Insurance policy and money receipt.

In order.

Insurance policy agreement dated 1 July 2007 has been provided which covers the risks contained therein for the period of 1st July 2007 to 30th June 2008.

11.   Corporate guarantee from Financere Lafarge S.A. for USD 14,000,000 along with supported Board Resolution.

Please ensure that Financere Lafarge S.A. has the power under its constitutional document to give the said Corporate Guarantee. Corporate guarantee from Financere Lafarge S.A. for USD 14,000,000 has been provided. However, the corporate guarantee is in a different language as such the contents of same cannot be verified by us. Also note that, although the Guarantee has been signed, the company seal of Financere Lafarge S.A. is missing. Please note that, the Guarantee will remain valid up till January 30th, 2010.

A Board Resolution of Financere Lafarge S.A. has also been provided. However, as it is in a different language, the contents of same cannot be verified by us.

Apart from the above, the following additional documents were also provided to us:

Memorandum of Deposit of Title Deed dated 12.07.2004: The provided Memorandum of Deposit of Title Deed dated 12.07.2004 covers Tk. 500,000,000 which was taken as loan by Company 1. under the loan agreement dated 05 January 2002. The said Memorandum of Deposit of Title Deed, does not cover Tk. 500,000,000 under the new Banking Facility Letter dated February 01, 2007.

If you have any further query, please do not hesitate to contact the undersigned.

All papers/documents referred to us are returned herewith.

Thanking you.

Yours faithfully,

______________________________

“The Lawyers & Jurists”
M.L.Hotel Tower Ltd,208,Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.
E-mail: www.lawyersnjurists.com

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