AAA

Current report:

The signing of a significant contract by a dependent company

Report number: 50/2006 day: 2006-08-31

Legal basis

Art. 56 par. 1 pt 2 of the Bidding (current and periodic information) Act

Contents of the report:

The management of Barlinek S.A. hereby announces publicly that on August 30th 2006 "BARLINEK CYPRUS LIMITED", based in Nicosia, Cyprus (a 100% dependent company of Barlinek S.A.) signed a contract with "Robert Bürkle GmbH” based in Freudenstadt, for the supply and assembly of a complete production and packaging line for three-layer floorboards as part of the investment in construction of the floorboard factory in Ukraine.

The net value of the contract is 8,350,000 EUR, equivalent on August 30th 2006 to 32,993,355.00 PLN according to the NBP’s average rate on that day (1 EUR = 3.9513 PLN).

The contract contains resolutions allowing Barlinek Cyprus Limited to extract 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 failure to achieve the qualitative and quantitative production parameters. Payment of the contractual penalties stipulated in this contract do not disqualify the right to seek compensation according to general principles, and in such a situation the contractual penalties are not included in the total of compensation due.

The contract comes into effect the moment a 25% prepayment is received by Robert Burkle GmbH 25%. In the event of delays in the transfer of this prepayment by Barlinek Cyprus Limited, all the deadlines mentioned in the contract may be moved back.

The value of Barlinek S.A.’s ownership capital form the criteria for considering this contract significant.