Conclusion of a subcontracting agreement with Instal-Rem S.A. for work at the Eemshaven power station in Holland

With reference to current reports No. 31/2011 of 25 March 2011 and No. 56/2010 of 7 December 2010, the Management Board of Energomontaż-Południe S.A. (the Issuer, the Company) announces that, on 9 May 2011, the Company concluded an agreement with the company Instal-Rem S.A. (the Subcontractor) for subcontracting work to be performed at the Eemshaven power station in Holland, the work having been commissioned from the Issuer by Alstom Power Nederland B.V. in accordance with an assignment of rights as described in the above-mentioned current report No. 31/2011. The value of the subcontracting agreement is EUR 5.38 million, which is approximately PLN 21.1 million according to the average exchange rate of the National Bank of Poland as of the date of this report.

The subject of the subconracting agreement is the assembly of exhaust and air flues for units A+B in Eemshaven in Holland. The period for performing the agreement is from the first quarter of 2011 to the end of July 2013. Because the commencement of work under the main contract was delayed for reasons not attributable to the Issuer, the deadline for completion of the main agreement has been extended accordingly.

The subcontracting agreement contains provisions on the contractual penalties which may be imposed by the Issuer if the Subcontractor is in delay with or withdraws from the agreement for reasons attributable to it. The total amount of contractual penalties for delays or a withdrawal from the agreement cannot exceed 25 per cent of the gross remuneration.
In the case of a withdrawal from the agreement by either party for reasons attributable to the Issuer, the Issuer will pay the Subcontractor a contractual penalty in the amount of 10 per cent of the remuneration.
The parties may seek additional compensation under general rules if the contractual penalty does not cover the harm suffered.

Detailed legal basis: Clause 5 par. 1 pt. 3 of the Regulation of the Minister of Finance on current and periodic information published by issuers of securities (...) of 19 February 2009.

Radosław Kamiński - President of the Management Board
Jacek Fydrych - Vice-president of the Management Board

Legal grounds: Article 56 par. 1 pt. 2 of the Act on Offerings - current and periodic information