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2/2016 Significant contract with the Polish National Health Fund (NFZ)

The Management Board of Centrum Medyczne ENEL-MED S.A. informs that on 26 January 2016 the company received an annex to a long-term agreement with the Polish National Health Fund (NFZ) – Mazovian Provincial Branch in Warsaw specifying the terms and conditions for the financing of health care with regard to hospital treatment for the period 01.01.2016-30.06.2016.

The consequence of the said annex is that the value of contracts entered into by and between the company and the Polish National Health Fund (NFZ), entered into during the last twelve (12) months, amounted to PLN 11,686,554.43, and thus exceeded the threshold of 10% of the company’s equity capital.

In the period question, the biggest contract with the Polish National Health Fund (NFZ) was an annex for hospital treatment, which was received by the company on 10 February 2015. The annex entered into with the Mazovian Provincial Branch in Warsaw is an annex to the contract entered into for the 20.02.2012-31.12.2016 period, and covers services in the field of neurosurgery, orthopaedics and locomotor system traumatology, general surgery, otorhinolaryngology, ophthalmology, and vascular surgery. It was entered into in 2015 and amounted to PLN 4,617,964.00.

The contract provides for the following liquidated damages on the part of the company:

1) In the case of a non-performance or improper performance of the contract for reasons attributable to the Service Provider, the Branch of the Fund may impose liquidated damages on the Service Provider.

2) In the case of issuing prescriptions to unauthorised persons or in unjustified cases, the Branch of the Fund may impose on the Service Provider liquidated damages equivalent to the undue refund of the price of medicine made on the basis of the prescriptions together with statutory interest from the date of the refund.

3) In the case of issuing orders for medical devices released to the order referred to in the regulations issued pursuant to Article 38 paragraph 4 of the Act on the reimbursement for medicines, foodstuffs for particular nutritional purposes, and medical devices financed in whole or in part by the Polish National Health Fund (NFZ), to unauthorised persons or in unjustified cases, the Branch of the Fund may impose on the Service Provider liquidated damages equivalent to the amount of undue financing, together with statutory interest from the date of the reimbursement.

4) In the case of a failure to fulfil the obligation with regard to obtaining in the competent Branch of the Fund an authorisation to use the e-WUŚ services in order to ensure the implementation of the rights of the service receivers resulting from Article 50 paragraph 3 of the Act of 27 August 2004 on health care services financed from public funds, the Branch of the Fund may impose on the Service Provider liquidated damages of up to 1% of the amount of the obligation specified in the contract.