Investor relations

Acting pursuant to section 5.1 point 1 of the Minister of Finance on Current and Periodical Reporting by Issuers of Securities and on Conditions of Accepting as Equivalent of the Information Required by Legal Regulations of a Non-member Country of 19 February 2009 (Journal of Laws No. 33, 2009 item. 259) ("the Ordinance"), J.W. Construction Holding S.A with its seat in Ząbki ("the Company") informs that on 24 May 2011, J.W. Construction S.S with its seat in Ząbki ("The Contractor"), which is a subsidiary of the Company, entered into an agreement with J.W. Wronia Spółka z o.o, with its seat in Ząbki ("Investor") with a value of PLN 80,000,000 net. The subject of the agreement is a complex construction, performed by the Contractor, in the system of a general construction of a multi-family building with services, underground garage and necessary technical infrastructure in the scope of networks, connections, heating substations, roads, parking lots, sidewalks, greenery and landscaping elements with a connection to the infrastructure with obtaining an occupancy permit according to submitted project documentation, on a real estate which is in perpetual usurfuct of the Investor, located in Warsaw, in Wronia 45 Street constituting a plot of land with register number 10 with an area of 6978 m 2, for which the District Court for Warsaw-Mokotów, X Division of Land Registry maintains land and mortgage register No. WA4M/00138852/8 ("Investment").

The term of completion of works by the Contractor was defined in the Agreement and set on 25 March 2013, the date of obtaining the occupancy permit is set for 60 days after completion of works. The remuneration was fixed on a flat rate basis. The Contractor’s remuneration will be paid on the basis of invoices received by the Investor and issued on the basis of hand-over reports of completed works which meet the quality standards specified in the Agreement and which are accepted as they progress.

The Contractor granted to the Company a 36-month statutory warranty for works performed and the period shall commence as of the date of the final acceptance of the Investment. Under each invoice issued by the Contractor, the Investor will withhold 5% of the value of the executed and accepted works net as a guarantee deposit. The guarantee deposit shall be returned to the Contractor in the following way:

2% of the value of invoices within 30 days from the date of final acceptance of the Investment and after removal of possible defects and faults;1.5% of the value of invoices after 1 year from the date of final acceptance of the Investment and after removal of possible defects and faults;1.5% of the value of invoice value after the expiry of a warranty period ie 36 months from the date of final acceptance of the Investment and after removal of any defects which may appear during the commissioned post-warranty acceptance.

The parties have agreed that the Investor will be entitled to a contractual penalty in the amount of 10% of the contractual remuneration , in case of withdrawing from the agreement due to reasons attributable the the Contractor. The Investor is entitled to withdraw from the agreement with prior written notice of the appointment of extra time in case of: (i) no accession by the Contractor for the execution of works by the date specified as the date of commencement of works, (ii) performance of works by the Contractor not in accordance with the project documentation and applicable Standards, and the conditions of a technical execution and acceptance of construction - assembly works, (iii) termination of works and not realising them by the Contractor for more than 7 working days for reasons beyond the Investor, (iv) when the Investor is delayed by the Contractor in the execution of works by 30 or more days in relation to the milestones specified in the Schedule of works and expenditures, for a given element and/or stage (v) a breach of the agreement by the Contractor, upon a written Investor's notice to the Contractor to refrain from violations and appointing the Contractor 14 day period, and when the Contractor shall not cease violations within the appointed period.

The investor may charge liquidated damages to the Contractor: (i) for the delay in the implementation of the stage of the agreement's subject due to reasons attributable to the Contractor, in the amount of 0.1% of the net value of the delayed stage for each day of delay, (ii) for the delay in removal of defects found during a receipt or within the warranty period and statutory warranty for defects in the amount of 0.1% of the net value of the element in which the defect occurred for each day of delay, dating from the day following the day on which the removal of the defect was supposed to occur.

The parties have reserved the right to supplementary compensation which transfers the amount of contractual penalties to the amount of the actual damage incurred.

In other respects the terms and conditions of the Agreement do not vary significantly from those generally used in such agreements.

The basis for recognizing the Agreement as a binding agreement isthe fact that ist value exceeds 10% of the Company’s equity.