Concluding a significant agreement with Ferrum S.A.

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

CONTENT OF THE REPORT:
The Management Board of Izostal S.A. (Company) informs that on January 26, 2016 it concluded subsequent contracts with Ferrum S.A. seated in Katowice. As a result of the transactions, total value of sales and purchase contracts concluded by the Company with Ferrum S.A. since July 29, 2015 (current report no. 18/2015) exceeded 10% of equity of the Company and equaled PLN 39.629 thousand (net).
Within the covered period the highest value contract was the transaction concluded on January 26, 2016 of purchasing by Izostal S.A. (Orderer) from Ferrum S.A. (Seller) of spiral-welded steel pipes, with a total value of EUR 2.934 (net), which after conversion by applying an average exchange rate of the National Bank of Poland as at the date of signing of the contract amounts to PLN 13.121 thousand (net).

According to contractual stipulations the Seller will provide with the entire batch of pipes no later than June 15, 2016. The Seller will provide a warranty on delivered products for a period of 36 months.
The concluded agreement contains the following provisions concerning penalties:
The contract provides for the possibility of calculation of the contractual penalties with the title of daily delays in its implementation as well as in the event of termination of the contract, for reasons attributable to the Seller.
Total amount of contractual penalties shall not exceed 10% of net contractual remuneration defined in the agreement.
The Orderer has the right to keep appropriate part of the Seller's due remuneration to secure contractual penalties owed to the Orderer. The Orderer may return this part of the remuneration after provision by the Seller of insurance guarantee or bank payment of the penalties with the content accepted earlier by the Orderer.
The Orderer has also the right to deduct the contractual penalties from the remuneration owed to the Seller.
If the contractual penalty does not cover the damage incurred, or if the cause for damage is not included in the provision on contractual penalties, the parties may claim compensation according to the Civil Code.

The other conditions of the contract do not differ from the conditions applied commonly for such contracts.
 
The transactions concluded with the company Ferrum S.A. in the above-mentioned period meet the criteria of a significant agreement due to the fact that their total value exceeds 10% of the value of the Company’s equity capital.

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 2016-01-26
Management Board Vice President, Michał Pietrek 2016-01-26
 
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: 47-113 Kolonowskie Opolska 29
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