Conclusion of a significant agreement with Polskie Górnictwo Naftowe i Gazownictwo S.A.

Date of issue: 2012-01-09

Legal basis:  Art. 56 clause 1 item 2 of the Offering Act - current and periodic information.

SUBJECT: Conclusion of a significant agreement with Polskie Górnictwo Naftowe i Gazownictwo S.A.

CONTENT OF THE REPORT:
With reference to the report no. 54/2011 of November 21, 2011, the Management Board of Izostal S.A. (Company, Seller) hereby informs that on January 9, 2012, the Company acting as the Consortium's Leader concluded the contract for the sale of pipes and fittings to Polskie Górnictwo Naftowe i Gazownictwo S.A. (Buyer) seated in Warsaw for 4 out of 12 specific parts of the public order  "Purchase of pipes and fittings for extraction drillings for 2011 and 2012".

Total value of the contract is PLN 50,232,339.47 net, that is PLN 61,785,777.55 gross and covers the following parts of the order:

• For part 1:  PLN 15,245,347.60 net, that is PLN 18,751,777,55  gross (contract delivery date - within 90 calendar days from the date of contract conslusion) ,
• For part 2:  PLN 14,773,170.73 net, that is PLN 18,751,777,55  gross (contract delivery date - within 120 calendar days from the date of contract conclusion) ,
• For part 6:  PLN 9,800,813.01 net, that is PLN 18,751,777,55  gross (contract delivery date - within 180 calendar days from the date of contract conclusion) ,
• For part 7:  PLN 10,413,008.13 net, that is PLN 18,751,777,55  gross (contract delivery date - within 180 calendar days from the date of contract conclusion) ,

1. The Buyer may impose contractual damages on the Seller:

           a) if the Buyer withdraws from the contract for reasons attributable to the Seller - in the amount of 8% of the total gross value of the contract,
           b) if the object of the contract is handed over with delay - in the amount of 0.1% of the gross value of undelivered batch of pipes for each day of delay, and in case the delay is longer than 20 days, in the amount of 1% of the gross value of undelivered batch of the object of the contract for each day following the lapse of this date,
           c) if  delay in the removal of defects is longer than 7 days the Seller shall pay to the Buyer 0.4% of the gross value of the defective batch of the object of the contract.

2. The Buyer, irrespective of the contractual damages set forth in the contract, may claim compensation from the Seller in excess of contractual damages on general principles provided for in the civil code.

The other conditions of the contract do not differ from the conditions applied commonly for such contracts.

The Company considers this Agreement a significant one as its value exceeds 10% of equity of Izostal S.A.

Total net value of the contracts concluded by Izostal S.A. with PGNiG S.A. and its subsidiaries in recent 12 months has amounted to PLN 56,954,431.78.

Specific legal basis: §5 clause 1 item 3 of the Ordinance of the Minister of Finance of February 19, 2009 on current and periodic information disclosed by the issuers of commercial papers and the conditions for recognizing as equivalent the information required by the laws of a non-member state (Journal of Laws No. 33, item 259 as amended).

SIGNATURES OF PERSONS REPRESENTING THE COMPANY:
Management Board President - Marek Mazurek 2012-01-09
Management Board Vice President - Jacek Podwiński 2012-01-09

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: 47-120 Zawadzkie Polna 3
Telephone: (77) 405 65 00            
Fax: (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