Investor relations

Topic: Conclusion of a significant agreement between subsidiaries.

Legal basis: Article 17(1) of MAR – confidential information

The Management Board of J.W. Construction Holding S.A. with its registered office in Ząbki (‘Company’) reports that on 28 February 2017 a contract was concluded between the Company’s subsidiaries: Hanza Invest S.A. with its registered office in Ząbki as Investor (‘Investor’) and J.W. Construction Spółka z o.o. with its registered office in Ząbki as General Contractor (‘Contractor’) the subject-matter of which was the conclusion by the Contractor of construction of the housing and service building in Szczecin at al. Wyzwolenia at Odzieżow street called ‘Hanza Tower’.

The date for obtaining the occupancy permit was set for 30 April 2019.

The remuneration of the Contractor was set as lum-sum remuneration based on the scope of work in the amount of PLN 150,000,000 increased by VAT at the rate applicable at the date of the relevant invoice.

The Contractor provided the Investor a 60-month guarantee for the works performed, and the term of that guarantee starts running on the date on which the occupancy permit is obtained.

To secure the Investor’s claims for proper performance of the contract, a security deposit will be retained from each invoice (5 % on the net value of such invoice), and such security deposit will be returned to the Contract: 50 % upon completion of works and obtaining the occupancy permit, and the other 50 % after the expirty of the guarantee period.

In addition, the Contractor is to provide a bank guarantee or insurance guarantee for proper performance of the contract at the rate of 5 % of the contract value which is to remain in force until the date of completion of works and obtaining the occupancy permit.

The parties agreed that the Investor with be entitled to liqidated damages of 10 % on contractual remuneration in the case the Contract is terminated for reasons attributable to the Contractor. The Contractor with be entitled to liqidated damages of 10 % of contractual remuneration in the case the Contract is terminated for reasons attributable to the Investor. Each of the parties may pursue supplemental damages, transfering the amount of restricted liquidated damages to the amount of actual damage.

The Investor is entitled to liquidated damages from the Contractor for each day of delay in the completion of works at the rate of 0.05 % on the net value of the remuneration for the delayed stage, and the liquidated damages for each day of delay in the removal of defects and flaws during the term of the guarantee and implied guarantee for defects at the rate of 0.05 % of the value of the element in which the defect occurred.

To any other extent, the terms of the Contract do not differ materially from the terms generally applied in similar contracts.

The basis for submission of this report is the relevance of the concluded contract to the operations of the Company’s Group due to the value and subject-matter of that contract.