AAA

Current report:

Confidential information

Report number: 47/2006 day: 2006-08-17

Legal basis

Art. 56 par. 1 pt 1 of the Bidding Act - confidential information

Content of the report:

The management of Barlinek S.A. hereby announces that on August 9th 2006 Barlinek Invest ltd, based in Vinnitsa in Ukraine, (a 100% dependent company of Barlinek S.A.) signed a contract with "Energoremservis" ltd, based in Vinnitsa in Ukraine to fulfil the function of General Contractor (including for carrying out the work on behalf of Barlinek Invest ltd stipulated in the contract) for the investment – construction of the floorboard factory in Ukraine.

The completion date for all the work stipulated in the contract has been named by the parties as August 31st 2007.

The contract contains resolutions concerning contractual penalties in the event of situations arising provided for in the contract, these penalties may exceed 10% of the value of the contract. The contractual penalties have been reserved for any delays which may occur during the completion of the work contracted, and for payments not being settled in time. Barlinek Invest ltd is also entitled to receive a contractual penalty payment amounting to 30% of the whole cost of all the work in the contract in the event of withdrawal from the contract, and in the event that the amount of damages borne exceeding the amount of the contractual penalty, and also to compensation payment in full, regardless of the amount of the contractual penalty paid.

Both parties have the right, in general principles, to seek compensation greater than the amount of contractual penalties stipulated in the contract. The contract concludes the negotiating process regarding the realisation of the investment in constructing the floorboard factory in Ukraine. The management of Barlinek S.A. also announces that the realisation of the investment in Ukraine is proceeding according to the timetable set by the company.