Investor relations

Report concerns:
Concluding a significant agreement

Report’s text:
Acting pursuant to section 5.1.(3) of the Ordinance of the Minister of Finance on current and periodical reporting by issuers of securities of 19 October 2005 (Journal of Laws of 2005 No. 209, item 1744) (henceforth the Ordinance), J.W. Construction Holding S.A., with its seat in Ząbki, Poland (thenceforth the Company) hereby reports that since 17 October 2008 (the publication date of the current report No. 80/2008 on the agreements concluded with J.W. Construction S.A., with its seat in Ząbki, for the total value exceeding 10% of the Company’s equity) the Company has concluded agreements for the total value of PLN 60,722,724 net with a subsidiary – J.W. Construction Spółka Akcyjna with its seat in Ząbki (henceforth the Contractor). The agreement with the highest value is the agreement of 6 January 2009 for an investment project consisting in completion of extensive modernisation and expansion of the Czarny Potok Spa Centre, including its technical infrastructure, located in Krynica – Zdrój, ul. Czarny Potok 65 (plot record No. 146, 163/1, 163/2, 164/1, 164/2, 164/3, 164/4, 164/5, 165, 172, 173, 174/1, 174/2, 174/3, 174/4, 174/5, 174/6, 174/7, 227/1, 227/2, 227/3, 227/4, 227/5, 227/6, 227/7, 62 from the Krynica Wieś 002 precinct (henceforth the Agreement). The Company had been the general contractor of this investment project until the day of conclusion of this Agreement.

The works performed by the Contractor have been broken down into two phases and are scheduled for completion, according to the Agreement, on 21 August 2009 (I phase) and on 23 December 2009 (II phase). The contractual fee is PLN 59,700,504 net and constitutes the total of all items in the scope of works and expenditures. The Contractor’s fee shall be payable based on invoices received by the Company and issued based on acceptance protocols of complete contractual works of appropriate quality, accepted in line with their progress.
The Contractor granted a 36-month statutory warranty for the facility for the benefit of the Company, valid from the date of the final acceptance of the object of the Agreement. Under each invoice issued by the Contractor, the Company will withhold 2% of the value of the executed and accepted works net as a guarantee deposit. The guarantee deposit will be reimbursed to the Contractor in two equal portions – the first within 21 days from the final acceptance and removal of any potential defects and faults, and the second following the term of the statutory warranty.
The Parties agreed that the Contractor shall be entitled to a contractual penalty in the amount of 10% of the contractual fee in case the Contractor withdraws from the Agreement for reasons on the part of the Company.
The Parties agreed that the Company shall be entitled to a contractual penalty in the amount of 10% of the contractual fee in case it withdraws from the Agreement for reasons on the part of the Contractor.
The Company is entitled to a contractual penalty from the Contractor for each day of the delay in the performance of works compared to the schedule, in the amount of 0.01% of the fee for the delayed phase per each day of the delay. The Company is entitled to a contractual penalty from the Contractor for each day of the delay in removing defects and faults during the term of the statutory warranty, in the amount of 0.01% of the value of the deficient item.
The parties reserve the right to additional indemnification, transferring the values of contractual penalties into the amounts of actual losses.
The remaining contractual terms do not differ considerably from the terms generally used in this type of agreements.
The Agreement has been considered significant pursuant to section 2.1.(51a) of the Ordinance, as the value of the concluded Agreement exceeds 10% of the Company's equity.