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

Legal basis: Art. 17 Clause 1 MAR - confidential information.
 
CONTENT OF THE REPORT:
In reference to the current report No. 20/2021 of July 22, 2021, the Management Board of Izostal S.A. (the Company) informs that the Consortium of companies (the Contractor) composed of: Izostal S.A. (the Consortium Leader), Ferrum S.A. (the Consortium Partner) and Stalprofil S.A. (the Consortium Partner) on November 23, 2021 concluded with the Gas Transmission Operator Gaz-System S.A. (the Ordering Party), a Contract for the performance of the task entitled: "Delivery of insulated steel pipes for the needs of the Gustorzyn - Wronów and Dolna Odra gas pipelines, order no. 2", procedure number: ZP/2021/04/0046/PZ, Part No. 2.

The subject of the Contract covers the supply of externally insulated and internally painted steel pipes with a diameter of DN700 with a total length of approximately 37 km. The order will be executed from April 1, 2022 to August 31, 2022.

The contract value is PLN 51.1 million net, which is PLN 62.8 million gross.

The difference in the value of the offer submitted by the Consortium to the value of the concluded Contract results from the provisions of the Contract regarding the valorization and variability of purchase and production costs.

The participation of the Consortium parties in the performance of the Contract will result from the actual involvement of Izostal S.A., Ferrum S.A. and Stalprofil S.A., respectively into individual stages of preparation and implementation of deliveries. As at the date of conclusion of the Contract, the majority contribution of the Consortium Leader in the performance of the Contract is estimated, however, taking into account the time perspective of the delivery, as well as the logistic requirements related to it, the involvement of the Consortium parties in the performance of the Contract is not permanent and may be subject to change.

The Contract provides for contractual penalties for O.G.P. Gaz-System S.A.:
- for a delay in the implementation of the Task not exceeding 30 days - in the amount of 0.2% of the net remuneration for the performance of a specific part of the contract (the Task), for each day of delay;
- for a delay in the implementation of the Task exceeding 30 days - in the amount of 0.3% of the net remuneration for the performance of a specific part of the contract (the Task), for each day of delay exceeding 30 days;
- for a delay in removing identified defects 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 the defect occurred in the above-mentioned period) for each day of delay;
- for the Ordering Party or the Contractor withdrawing from the Contract for reasons attributable to the Contractor - in the amount of 20% of the total net contractual remuneration;

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

If the agreed contractual penalties do not fully cover the damage suffered by the Ordering Party or if the cause of the damage is not included in the provisions on contractual penalties, the Ordering Party has the right to claim damages exceeding the amount of contractual penalties under the general principles of the Civil Code.

The subject of the Contract is covered by a 36-month quality guarantee and a warranty for defects on the delivered goods. To ensure the proper performance of the Contract, the Consortium will provide a performance bond in the amount of 5% of the Remuneration specified in the Contract.

The remaining conditions of the Contract do not differ from the standard terms and conditions applied in this type of contract.

The Management Board of the Company considers the described contract to be significant due to its value. The implementation of the aforementioned Contract will have an impact on the increase of the Company's revenues.

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President, Marek Mazurek  2021-11-23
Management Board Vice President, Michał Pietrek  2021-11-23

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