Investment Teaser. Company production for Power Generation Sector, Metal Processing

Agenda

MARKET OVERVIEW 2

KEY INVESTMENT CONSIDERATIONS 3

COMPANY PROFILE 4

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KEY FINANCIALS 6

COMPANY PERFORMANCE 7

TRANSACTION STRUCTURE 8

PRINCIPLES OF TRANSACTION 9

Market overview

The market offers high growth for suppliers of components for the energy sector because there is constant growth in consumption of electricity and Polish power plants are old.

All energy companies in Poland are interested in investing in refurbishment of existing capacity, together with creation of new plants.The current slowdown eases urgency but not the long-term need for the Polish energy sector.A huge injection of capital expenditures is needed (estimated at 3 billion annually between 2009 and 2030)

6%

Age structure of power plants in Poland

5-10 yrs30years

25-30 years

20-25years

15-20yrs

10-15 yrs5-10 yrs

18%39%

71%89%

2000 2010 2020 2030Source: Prof. Krzysztof mijewski

Key Investment Considerations

Dynamic growth and high profitability reflecting mastery in advanced and ultra-precise metal pro-cessing, extremely high levels of technical competence, reliability and project management skills

Investment in new advanced production capacities, own engineering and technology resourcesand a strong basis for further sales growth exceeding PLN 100m in 3-4 years

Well established cooperation with major global players on the relevant markets

High growth potential within the sector

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High growth potential within the sector

Highly skilled, educated and experienced staff

The Company is one of the leading suppliers on the Polish market of precise components for energy and oil and the gas industry

Supply of products for both domestic (80% sales) and international markets (20% sales)

Company Profile

The Company was established by a private individual in 2005. The founder acquired a production facility (machines and equipment) and employed former employees of a divested non-core production department of a global corporation (GC). The goal was to invest in the production facility in order to develop the organization; to provide products and services for GC thatoutsourced the department but simultaneously gained new clients in order to reduce dependency on GC. Over six years of activity, the Company has established itself as a reliable supplier of a wide range of components for steamturbines such as: diaphragms, turbine valves and their components, servomotors, piping (live & reheat steam and oil supply), satellite coated elements, sealing rings, sealing strips, coupling elements. The Company specializes in delivering complete setsfor repairs and overhauling turbines up to 400 MW, including hulls (casted and welded) repairs and revitalization, rotor repairsetc. A minor part of its production consists in specialist steel constructions such as rotor racks, foundation plates or frames for gas compressors.Such production is categorized by the following: single unit production, specialist materials which are difficult to process,highest quality requirements and short delivery times. All works are performed under stringent quality control supervision and all products are non-destructively tested by internal specialists and a certified laboratory.

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Company Profile

The Company has production capacity in machining, heat treatment, manual welding, robotized welding, abrasive water jet cutting, sand blasting, chamber painting, precise assembly, non-destructive testing. The Company has access to production capacities of very wide parameters (machining, heat treatment, metal forming) given its location in a large industrial zone which is also occupied by companies occupied in similar business.The Company has defined its strategic goals: moderate growth in its current business (year to year up to 5%) and specialization in two or three products primarily for export sales which should contribute an additional 10-15% to growth rates as of 2012. In order to secure production capacities for further development the Company has completed an investment project of c.a. PLN 16m in new machines and factory facilities.

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The Company is perfectly suited to supply the power industry sector due to the following: Skilled employees with 20-30 years of experience in production Constant cooperation with the best engineers in metal processing for the power industry Know-how in: engineering, production planning, quality requirements etc. Excellent contacts within the power industry sector and an excellent financial standing

Key financials

2008 2009 2010 2011 2012 2013

Revenue 48.042 38.987 62.009 56.229 79.183 80.927

EBITDA 7.067 5.350 14.411 10.219 11.300 10.423

EBIT 7.185 4.818 13.895 9.382 8.946 8.201

Key historical financials and financial projections (in PLN000)

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Net Profit 5.723 4.047 13.747 9.455 8.344 8.201

Total Assets 15.097 16.117 27.413 41.843 52.782 52.350

Equity 7.973 12.020 19.698 17.434 18.215 20.266

Company performance

48 042

62 00956 229

79 183 80 927

17%

22%

15%

Revenue

EBIT

Margin

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48 042

38 987

7 185 4 818

13 8959 382 8 946 8 201

10%11%12%

2008 2009 2010 2011 2012 2013

The Company has a very solid performance track record with: dynamic growth solid profitability ability to finance important

investment expenditure

Transaction structure

Sale of majority stake of shares with the call option to purchase remaining shares, with operations managed by the current owner within the period of 3 years after conclusion of the first shares sale agreement (optional)

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Principles of the transaction

SSW law firm is advising the Vendor on the sale of the shares. It is also assigned to select potential Purchasers. The brochure provides interested parties with initial information regarding the opportunity. This brochure shall not constitute an offer within the meaning of Art. 66 et seqof the Polish Civil Code. Once should you require further information concerning the investment, please request a draft of Non Disclosure Undertaking document.

For further information please contact:

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Piotr SpaczyskiPartnerAttorney at Law

Law Firm Spaczyski, Szczepaniak i Wsplnicy S.K.A.Rondo ONZ 1, 00-124 Warsawtel. +48 22 544 87 00mobile: +48 602 250 491piotr.spaczynski@ssw.pl

Contact

Warsaw Office

Rondo ONZ 12th floor00-124 Warszawatel. + 48 22 544 87 00fax + 48 22 544 87 01warszawa@ssw.pl

Poznan Office

ul. Mielyskiego 147th floor, Okrglak61-725 Poznatel. + 48 61 625 16 00fax + 48 61 625 16 01poznan@ssw.pl

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