Conclusion by the Consortium composed of: Izostal S.A. (Consortium Leader), Ferrum S.A. (Consortium Partner) and Stalprofil S.A. (Consortium Partner) of the Contract for the supply of DN700 coated steel pipes to O.G.P. Gaz-System S.A.

Legal basis: Art. 17 Clause 1 MAR - confidential information.
 
CONTENT OF THE REPORT:
With reference to current report No. 16/2022 dated 11 May 2022, the Management Board of Izostal S.A. (Company) informs that the Consortium of companies (Contractor) consisting of: Izostal S.A. (Consortium Leader), Ferrum S.A. (Consortium Partner) and Stalprofil S.A. (Consortium Partner) on 13 June 2022 entered into a Contract with Operator Gazociągów Przesyłowych Gaz-System S.A. (Principal) as a result of the conducted tender procedure in the form of an open tender for the supply of pipes for the implementation of the task: Skoczów-Komorowice-Oświęcim-Tworzeń (procedure number: ZP/2022/01/0009/SWI).

The subject of the Contract covers the supply of externally coated and internally painted (optionally laminated) steel pipes with a diameter of DN700 with a total length of approximately 40 km. The Contract will be executed between 1 January 2023 and 30 June 2023.

The maximum value of the Contract shall not exceed the amount of PLN 94.3 million net, which is PLN 116.0 million gross. The indicated remuneration includes the remuneration for the delivery of the pipes and an estimated remuneration related to the delivery tolerance of 0/+1% of the quantity of the ordered assortment as well as a remuneration to cover the additional costs of possible transport to alternative pipe delivery locations.

Participation of the Consortium parties in the performance of the Contract shall result from actual involvement of Izostal S.A., Ferrum S.A. and Stalprofil S.A., respectively, in individual stages of preparation and implementation of deliveries. As at the date of conclusion of the Contract, it is estimated that the Consortium Leader will have a majority share in the performance of the Contract, but given the time horizon for delivery as well as the logistical requirements involved, the involvement of the Consortium parties in the performance of the Contract is not permanent and may change.

The Contract provides for contractual penalties in favour of O.G.P. Gaz-System S.A:
- for a delay not exceeding 30 days in the completion of a Task (part of the contract subject) - in the amount of 0.2% of the net remuneration for the completion of a given Task, for each day of delay;
- for a delay exceeding 30 days in the completion of a Task - in the amount of 0.3% of the net remuneration for the completion of a given Task, for each day of delay exceeding 30 days;
- for a delay in removal of defects identified during the period of quality guarantee or warranty for defects - in the amount of 0.05% of the net remuneration for the Task (in the subject of which a defect occurred during the above-mentioned period) for each day of delay;
- for withdrawal by the Principal or the Contractor from the Contract for reasons attributable to the Contractor - at the rate of 20% of the total net contractual remuneration;

The parties agree that the total amount of contractual penalties calculated for the Contractor is limited to 20% of the net remuneration under the Contract.

If the stipulated contractual penalties do not fully cover the damage incurred by the Principal or if the cause of the damage is not included in the provisions on contractual penalties, the Principal shall have the right to seek damages in excess of the amount of contractual penalties on general terms set out in the Civil Code.

The subject of the Contract is covered by a 36-month quality warranty and statutory guarantee for defects in supplied goods. To ensure proper performance of the Contract, the Consortium shall lodge a performance bond in an amount equal to 5% of the gross remuneration for the supply of the pipes specified in the Contract.

The other terms of the Contract do not differ from the standard terms used for this type of contracts.

The Company's Management Board considers the described contract to be material due to its value. The implementation of the aforementioned contract will have an impact on the Company's revenue growth.

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek 2022-06-13
Management Board Vice President, Michał Pietrek 2022-06-13

INFORMATION ON THE ENTITY:
Full name of the issuer: IZOSTAL SPÓŁKA AKCYJNA
Abbreviated name of the issuer:  IZOSTAL S.A.
Sector based on the classification of Warsaw Stock Exchange:  Other industry
Address: 47-113 Kolonowskie, Opolska 29
Telephone: +48 77 405 65 00
Fax: +48 77 405 65 01
e-mail: info@izostal.com.pl
www.izostal.com.pl
VAT No. [NIP]:756-00-10-641
Statistical No. [REGON]: 530884678