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<SEC-DOCUMENT>0000950144-02-003099.txt : 20020415
<SEC-HEADER>0000950144-02-003099.hdr.sgml : 20020415
ACCESSION NUMBER:		0000950144-02-003099
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		13
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020329

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSOLIDATED WATER CO LTD
		CENTRAL INDEX KEY:			0000928340
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		STATE OF INCORPORATION:			E6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25248
		FILM NUMBER:		02594032

	BUSINESS ADDRESS:	
		STREET 1:		TRAFALGAR PL
		STREET 2:		WEST BAY RD
		CITY:			GRAND CAYMAN BWI CAY
		STATE:			E9
		BUSINESS PHONE:		8099474277

	MAIL ADDRESS:	
		STREET 1:		TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX
		STREET 2:		GRAND CAYMAN, CAYMAN ISLANDS, BWI

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CAYMAN WATER CO LTD
		DATE OF NAME CHANGE:	19941212
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>g75127e10-k.txt
<DESCRIPTION>CONSOLIDATED WATER CO., LTD 10-K 12/31/01
<TEXT>
<PAGE>
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-K

(MARK ONE)

   [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934


          For the fiscal year ended DECEMBER 31, 2001

                                    OR

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

         For the transaction period from _____________ to _____________

                         Commission File Number: 0-25248

                           CONSOLIDATED WATER CO. LTD.
     ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)
<TABLE>

<S>                                                              <C>
                    CAYMAN ISLANDS                                              N/A
- --------------------------------------------------------        ------------------------------------
   (State or other jurisdiction of incorporation or             (I.R.S. Employer Identification No.)
                    organization)

   TRAFALGAR PLACE, WEST BAY ROAD, P.O. BOX 1114GT,
                 GRAND CAYMAN, B.W.I.                                           N/A
- --------------------------------------------------------        ------------------------------------
       (Address of principal executive offices)                              (Zip Code)
</TABLE>

       Registrant's Telephone number, including area code: (345) 945-4277

        Securities registered pursuant to Section 12(b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:

                       ORDINARY SHARES, PAR VALUE CI$1.00
         ---------------------------------------------------------------
                                (Title of Class)


<PAGE>



Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

         Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this 10-K or any amendments to this
Form 10-K. [NOT APPLICABLE]

The aggregate market value of common stock held by non-affiliates of the
registrant, based on the closing sales price for the registrant's ordinary
shares, as reported on the Nasdaq National Market on March 19, 2002, was
$56,844,539.

As at March 19, 2002, there were 3,920,313 shares of the registrant's ordinary
shares outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

NONE

EXCHANGE RATES

Unless otherwise indicated, all dollar amounts are in United States Dollars and
references to "$", "U.S.", or "U.S.$" are to United States Dollars.

The official fixed exchange rate for conversion of CI$ into U.S.$, as determined
by the Cayman Islands Monetary Authority, has been fixed since April 1974 at
U.S. $1.20 per CI$1.00.

The official fixed exchange rate for conversion of BZE$ into U.S.$, as
determined by the Central Bank of Belize, has been fixed since 1976 at U.S.$
0.50 per BZE$ 1.00.

The official fixed exchange rate for conversion of BAH$ into U.S.$, as
determined by the Central Bank of The Bahamas, has been fixed since 1973 at
U.S.$ 1.00 per BAH$ 1.00.


<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

SECTION     DESCRIPTION                                                               PAGE
- -------     -----------                                                               ----
<S>    <C>                                                                            <C>
PART I
  Item 1.   Business................................................................  1
  Item 2.   Properties.............................................................. 11
  Item 3.   Legal Proceedings....................................................... 14
  Item 4.   Submission of Matters to a Vote of Security Holders..................... 14

PART II
  Item 5.   Market for Registrant's Common Equity and Related Stockholder
               Matters.............................................................. 14
  Item 6.   Selected Financial Data................................................. 20
  Item 7.   Management's Discussions and Analysis of Financial Condition and
               Results of Operations................................................ 21
  Item 7A.  Quantitative and Qualitative Disclosure about Market Risk............... 44
  Item 8.   Financial Statements and Supplementary Data............................. 44
  Item 9.   Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure................................................. 78

PART III
  Item 10.  Directors and Executive Officers of the Registrant...................... 78
  Item 11.  Executive Compensation.................................................. 81
  Item 12.  Security Ownership of Certain Beneficial Owners and Management....       86
  Item 13.  Certain Relationships and Related Transactions.......................... 88

PART IV
  Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.....     89

SIGNATURES ......................................................................... 95

</TABLE>


                                       i
<PAGE>



4                                    PART I

ITEM 1. BUSINESS

INTRODUCTION

         Our company was incorporated in August 1973 in the Cayman Islands and
provides water services in the Cayman Islands, Belize, and the Commonwealth of
the Bahamas. Our principal executive offices are located at Trafalgar Place,
West Bay Road, Grand Cayman, Cayman Islands. We provide water services in areas
where the supply of potable water is scarce. These water services include the
production of potable water from seawater, and the distribution of potable water
through pipelines to our customers. Our customers include residential,
commercial and tourist properties, government facilities, and public utilities.

         Our business activities are reported in three business segments, which
reflect a change in reporting during 2000 due to the acquisition of our wholly
owned subsidiary company, Belize Water Ltd., in Belize, Central America and our
entering into an agreement with South Bimini International Ltd., a Bahamian
company, to provide water to property in South Bimini Island, Commonwealth of
Bahamas. The business group structure is based on defined areas of management
responsibility and the geographical location of our operations. The business
group segments are Cayman Islands operations, Belize operations and Bahamas
operations. In 2001, the Cayman Island operations, Belize operations and Bahamas
operations accounted for 88.8%, 11.0% and 0.2%, respectively, of our total
income. In 2000 these percentages were 95.4%, 4.6% and nil respectively.

FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS

         The information contained in Note 12 Segmented Information of our
consolidated financial statements found on page 65, in ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA for the year ended December 31, 2001, is
incorporated herein by reference.

BUSINESS COMBINATION

         Consolidated financial statements have been presented which include our
wholly-owned subsidiary, Belize Water Ltd. This acquisition was accounted for by
the purchase method. Our other three subsidiaries, Commonwealth Water Limited,
Cayman Water Company Limited and Hurricane Hideaway Ltd. are dormant companies
and have been consolidated.

CAYMAN ISLANDS OPERATIONS

         The Cayman Islands comprise three islands, Grand Cayman, Little Cayman
and Cayman Brac, located approximately 460 miles south of Miami, Florida. The
three islands have a total area of approximately 100 square miles.

         Our Cayman Islands operations produce potable water at our three
reverse osmosis seawater conversion plants in Grand Cayman, namely our
Governor's Harbour plant, West Bay plant, and our newly acquired Britannia
plant. The Britannia plant was acquired and began operations on February 1,
2002, subsequent to entering into an agreement to purchase the facility on
December 10, 2001.



                                       1
<PAGE>



         The current capacity of our Governor's Harbour plant is 1.2 million
U.S. gallons per day, which is in excess of the minimum quantities of water
which Ocean Conversion (Cayman) Ltd., a Cayman Islands company which operates
our Governor's Harbour plant, must supply to us under a water purchase
agreement. The current capacity of our West Bay plant, which we operate, is
710,000 U.S. gallons per day. The current capacity of our Britannia plant, which
we also operate, is 440,000 U.S. gallons per day. Since the plants began
production of water, they have consistently been capable of operating at or near
their rated capacity.

         Feed water for the reverse osmosis units is drawn from deep wells with
associated pumps on the properties. Wastewater is discharged into brine wells on
the properties below the level of the feed water intakes.

         Electricity to our plants is supplied by Caribbean Utilities Co. Ltd.,
a publicly traded utility company. At all three plant sites, we maintain diesel
driven, standby generators with sufficient capacity to operate our distribution
pumps and other essential equipment during any temporary interruptions in the
electricity supply.

         In the event of an emergency, our distribution system is connected to
the George Town distribution system of Water Authority-Cayman. In order to
efficiently maintain our equipment, we have purchased water from them for brief
periods of time in the past. We have also sold potable water to the Water
Authority-Cayman, and have supplied substantial quantities of water almost
continuously over a seven-month period in late 1993 and early 1994.

         Our pipeline system in the Cayman Islands covers the Seven Mile Beach
and West Bay areas of Grand Cayman and consists of approximately 65 miles of PVC
pipeline. We extend our distribution system periodically as property
developments are completed. We have a main pipe loop covering a major part of
the Seven Mile Beach area. We place extensions of smaller diameter pipe off our
main pipe to service new developments in our service area. This system of
building branches from the main pipe keeps our construction costs low and allows
us to provide service to new areas in a timely manner. During 2001 we completed
a number of small pipeline extensions into newly developed properties within our
franchise area, and replaced approximately 0.5 miles of main pipeline with
larger diameter pipe to accommodate future demand growth on our system.

         Developers are responsible for laying the pipeline within the
development at their own cost, but in accordance with our specifications. When
the development is completed, the developer then transfers operation and
maintenance of the pipeline to us.

         We have a comprehensive layout of our pipeline system, which is
maintained in a computer aided design ("CAD") system. This system is integrated
with digital aerial photographs and a computer generated hydraulic model, which
allows us to accurately locate pipes and equipment in need of repair and
maintenance. It also helps us to plan extensions of and upgrades to our existing
pipeline system.



                                       2
<PAGE>



         The following table shows, for each of the five fiscal years ended
December 31, 2001, our total number of customer connections at the end of each
period and metered sales of water for that period:

<TABLE>
<CAPTION>

                                                   2001        2000        1999        1998        1997
                                                  -------     -------     -------     -------     -------
<S>                                                 <C>         <C>         <C>         <C>         <C>
Number of Customers                                 2,999       2,836       2,606       2,347       2,069
Miles of Pipeline                                      65          64          63          62          57
Metered Sales (in thousands of U.S. gallons):
     Commercial                                   358,711     345,940     308,949     315,980     300,350
     Residential                                  104,002      97,759      86,712      80,150      72,393
     Government facilities                         11,425       7,599       5,686       4,420       4,007
                                                  -------     -------     -------     -------     -------
Total                                             474,138     451,298     401,347     400,550     376,750
                                                  =======     =======     =======     =======     =======
</TABLE>


         The table above does not precisely represent the actual number of
customers we service. In hotels and condominiums, we may only have one customer,
which is the operator of the hotel or the condominium, but we actually supply
water to all of the units within that hotel or condominium development. Of the
customers indicated in the table above, as of 2001, 49.1% were residential,
49.2% were hotels, condominiums and other commercial customers and 1.7% were
government facilities.

         During 2001, our prices per 1,000 US gallons ranged from $19.07 to
$23.16. The average sales price for the year ended December 31, 2001 was $20.61
per 1,000 US gallons. During 2000, our prices per 1,000 US gallons ranged from
$18.62 to $22.34. The average sales price for the year ended December 31, 2000
was $20.19 per 1,000 US gallons.

         We have a five-year agreement with a developer to supply on demand a
minimum of 48 million U.S. gallons of non-potable water per year on a take or
pay basis to irrigate an 18-hole golf course.

         Before 1991, any owner of property within our licensed area could
install water making equipment for its own use. Since 1991, that option is only
available to private residences, although water plants then in existence could
be maintained but not replaced or expanded. When the Marriott Hotel was built in
1990 in our licensed area, the developer installed its own reverse osmosis
equipment. The equipment proved unreliable and on February 4, 1994, we entered
into an agreement with the owner of the Marriott Hotel to supply water to the
Marriott Hotel at our standard tariff rates. The Marriott Hotel continues to
operate its own reverse osmosis equipment to produce water for themselves,
although generally in amounts less than their total monthly requirements.

         In 1995, we entered into a 10-year agreement with the owner of the
Westin Hotel. This agreement requires us to supply up to 1.86 million U.S.
gallons on a monthly basis to the hotel at a discount to our standard tariff
rates, and to supply any additional demand on a best efforts basis. The Westin
Hotel maintains storage capacity on-site, assists pressurization with on-site
repumping facilities, and has provided us with a letter of credit which covers
the cost of 45 days of water supply.

         In addition, on December 10, 2001, which took effect February 1, 2002,
we entered into a twenty-five year agreement to supply a minimum of 62 million
U.S. gallons of potable water per year on demand to our customer, Cayman Hotel
and Golf, Inc., ("CHGI") the owners of the Hyatt Grand Cayman Resort and
Britannia Golf course. CHGI has committed to pay for a minimum of 62 million US
gallons of water by year on a take or pay basis. We are required by our
government license to meet any water demand from CHGI above the 62 million US
gallons per year.



                                       3
<PAGE>


         The current market which we service under our license in the Cayman
Islands consists of Seven Mile Beach and West Bay, Grand Cayman Island, two of
the three most populated areas in the Cayman Islands. Our plants and water
distribution system are equipped with efficient, state-of-the-art technology,
and we consistently provide high quality water to our customers. The Cayman
Islands Government, through Water Authority-Cayman, supplies water to parts of
Grand Cayman Island, which are not within our licensed area, as well as, Little
Cayman and Cayman Brac.

         According to the most recent figures published by the Economics and
Statistics Office of the Cayman Islands Government, the population of the Cayman
Islands was approximately 39,410 persons in 1999. Most recent figures published
by the Cayman Islands Government Department of Tourism show that the growth rate
of tourism in the Cayman Islands has increased on average 8.83% annually over
the 10 year period from 1989 through 1999, with total visitor arrivals of 1.25
million persons from January through October 2001, up from 1.12 million arrivals
during the same period of 2000.

         During 2001, construction continued slowly within our franchise area on
the 360-room Ritz Carlton Hotel, Condominiums and Golf Course development. The
developer of this project has announced an anticipated completion date of late
2003.

         GOVERNMENT

         The Cayman Islands are a British Overseas Territory of the United
Kingdom and have had a stable political climate since 1670, when the Cayman
Islands were ceded to England by the Treaty of Madrid. The Queen of England
appoints the Governor of the Cayman Islands to make laws with the advice and
consent of the legislative assembly. There are 15 elected members of the
legislative assembly and three members appointed by the Governor from the Civil
Service. The Executive Council is responsible for day-to-day government
operations. The Executive Council consists of five ministers who are chosen by
the legislative assembly from its 15 popularly elected members, and the three
Civil Service members. The Governor has reserved powers and the United Kingdom
retains full control over foreign affairs and defense. The Cayman Islands are a
common law jurisdiction and have adopted a legal system similar to that of the
United Kingdom.

         CUSTOMS DUTIES AND TAXES

         We are exempt from, or receive concessionary rates of, customs duties
on capital expenditures on plant and major consumable spares and supplies
imported into the Cayman Islands as follows:

         o  there are no taxes on profit, income, capital gains or appreciations
            of our company in the Cayman Islands;

         o  we do not pay any import duty or taxes on permeator membranes,
            electric pumps and motors and chemicals which we purchase; and

         o  we pay duty at the rate of 10% of the cost, including insurance and
            transportation to the Cayman Islands, of other plant and associated
            materials and equipment to manufacture or supply water in Seven Mile
            Beach or West Bay.



                                       4
<PAGE>


BELIZE OPERATIONS

         On July 21, 2000, we acquired Seatec Belize Ltd. and subsequently
changed the name of the company to Belize Water Limited. Belize Water Limited, a
wholly owned subsidiary of Consolidated Water Co. Ltd., provides potable water
from one reverse osmosis seawater conversion plant in Ambergris Caye, Belize,
Central America, capable of producing 420,000 U.S. gallons per day, to Belize
Water Services Limited ("BWSL"), who acquired the operations of the Belize Water
and Sewerage Authority in February 2001. Belize Water Limited provides water to
BWSL, which distributes the water through its own distribution system to
residential, commercial and tourist properties in Ambergris Caye, Belize. During
2001, we supplied BWSL with 93.8 million U.S. gallons of water.

         During 2001, our prices per 1,000 US gallons ranged from $13.06 to
$14.75. The average sales price for the year ended December 31, 2001 was $13.12
per 1,000 US gallons. During 2000, our prices per 1,000 US gallons ranged from
$13.06 to $14.67. The average sales price for the six months ended December 31,
2000 was $13.06 per 1,000 US gallons.

         Feed water for the reverse osmosis units is drawn from deep wells with
associated pumps on the property. Wastewater is discharged into brine wells on
the property below the level of the feed water intakes.

         Electricity to our plants is supplied by Belize Electricity Limited. At
the plant site, we maintain a diesel driven, standby generators with sufficient
capacity to operate our essential equipment during any temporary interruptions
in the electricity supply.

         Our market in Ambergris Caye consists of residential, commercial and
tourist properties in the town of San Pedro, which is located on the southern
end of Ambergris Caye. Ambergris Caye is one of about 1,000 islands located east
of the Belize mainland, and off the southeastern tip of the Yucatan Peninsula.
Ambergris Caye is approximately 25 miles long and according to the most recent
data from the Belize Government has a population of about 4,500 residents,
increased approximately 144% over the past ten years. We provide bulk potable
water to BWSL who distribute this water to this market. BWSL currently has no
other source of potable water in Ambergris Caye.

         A 185 mile long barrier reef, which is the largest barrier reef in the
Western Hemisphere, is situated just offshore of Ambergris Caye. This natural
attraction is rapidly becoming a choice destination for SCUBA divers and
tourists. Tourism is Belize's second largest source of foreign income, next to
agriculture.

         CUSTOMS DUTY, TAXES AND THE GOVERNMENT IN BELIZE

         The Government of Belize has exempted Belize Water Ltd. from all duties
and sales taxes until January 2003 and company taxes until January 2004. While
the Government of Belize has confirmed its commitment to support all future
applications for extensions or additional tax exemptions for the life of the
water supply contract, future exemptions must be approved by the Belizean
legislature and we cannot give any assurance that we will be granted any further
tax exemptions after January 2004.

BAHAMAS OPERATIONS

         The Bimini Islands consist of North Bimini and South Bimini, and are
two of 700 islands which comprise the Commonwealth of the Bahamas. The Bimini
Islands are located approximately 48 miles east of Ft. Lauderdale, Florida and
are a premier destination for sport fishing enthusiasts. The population of the
Biminis is approximately 1,600 persons and the islands have about 200 hotel and
guest rooms available for tourists. The total land area of the Biminis is
approximately 9 square miles.



                                       5
<PAGE>


         In 2000, we entered into a water supply agreement with South Bimini
International Ltd., a company incorporated in the Commonwealth of Bahamas, and
on July 11, 2001 we began to provide potable water to the marina and condominium
development, Bimini Sands Resort and Bimini Beach Hotel. The developer of the
Bimini Sands Resort has developed half of a 150-slip marina and constructed 54
condominium units, and plans to construct a further 162 condominium units. We
are not currently aware of any time schedule by the developer for the completion
of the additional 162 condominium units.

         We provide potable water to Bimini Sands Resort and to the Bimini Beach
Hotel, a 40-room hotel also owned by the same developer, from one reverse
osmosis seawater conversion plant in Bimini, Bahamas capable of producing
115,000 U.S. gallons per day. During 2001, we supplied South Bimini
International Ltd. with 1.0 million U.S. gallons of water.

         During 2001, our prices per 1,000 US gallons ranged from $14.66 to
$26.32. The average sales price for the six months ended December 31, 2001 was
$26.32 per 1,000 US gallons.

         Feed water for the reverse osmosis units is drawn from deep wells with
associated pumps on the property. Wastewater is discharged into brine wells on
the property below the level of the feed water intakes.

         Electricity to our plants is supplied by Bahamas Electricity
Corporation. At the plant site, we maintain a diesel driven, standby generator
with sufficient capacity to operate our distribution pumps and other essential
equipment during any temporary interruptions in the electricity supply.

         CUSTOMS DUTY, TAXES AND THE GOVERNMENT IN BAHAMAS

         We have not been granted any tax exemptions for our Bahamian
operations.

         We believe that we may be subject to tax ranging from 1% to 2% of the
gross revenues generated by our Bahamian operations and are currently reviewing
the matter with our Bahamian attorneys. We did not pay any tax to the Bahamian
government during 2001, other than National Insurance Board tax on our employee,
and we calculate our potential tax liability based on our 2001 sales to be less
than US$500.

GOVERNMENT REGULATION

         We are regulated by the Water Authority of the Cayman Islands on behalf
of the Cayman Islands Government and believe that our operations comply with all
local laws and regulations.

         We have been advised by our attorney in Belize that we may require a
license from the Government of Belize under the Water Industry Act 2001 in
relation to our water sales agreement with BWSL. We are currently reviewing our
obligations under this new legislation, which was enacted to facilitate the
privatization of the government Water and Sewerage Authority in February 2001.
Our Belize operations are regulated by the terms and conditions of our water
supply agreement with BWSL. However the new Water Industry Act 2001 requires all
water service providers to obtain a license from the Public Utilities
Commission, which was created under the Act. The Public Utilities Commission has
the power to set the terms and conditions on which all water services in Belize
are provided to the public. The Act also contains certain savings for operations
which were in existence before the new law was enacted, which we believe may
apply to our operations. To date we have not been advised by any Government
entity that we require such a license, and do not foresee any difficulty or
significant additional costs obtaining a license if necessary. We believe that
our operations in Belize comply with all other local laws and regulations.



                                       6
<PAGE>

         We believe that our operations in the Bahamas comply with all local
laws and regulations, and we are currently reviewing our tax status as disclosed
above.

MARKET AND SERVICE AREA

         We believe that our potential market consists of any location where
there is a need for potable water. While water sufficiency problems are not
nearly as severe in the United States as in some other nations, three major
states, California, Texas and Florida, are already facing water supply problems.
These states and most water-deficient nations in the world all have access to
significant amounts of ocean water, yet cannot economically process major
quantities for consumption. The desalination of ocean water, either through
distillation or reverse osmosis, is widely regarded as the most viable
alternative to fresh water in areas with an insufficient natural supply.

         We have historically focused on the English speaking Caribbean basin
and adjacent areas as our primary market because (i) these areas have little or
no naturally occurring fresh water, (ii) limited local regulations allow our
operations to generate higher shareholder returns than could be achieved in more
highly regulated countries, and (iii) these areas contain a high proportion of
tourist properties, which generate higher volume sales than residential users.

GROWTH STRATEGY

         Our growth strategy is as follows:

         WE INTEND TO CONTINUE DEVELOPING OUR PRODUCTION AND DISTRIBUTION
INFRASTRUCTURE AND PROVIDE HIGH QUALITY POTABLE WATER TO OUR LICENSED AREA IN
THE CAYMAN ISLANDS. We intend to increase our customer base and revenues in the
Cayman Islands by providing water service on the most cost-efficient basis to
new residential, commercial and tourist properties that are being developed in
our exclusive licensed area. We intend to increase our service area by exploring
the possibility of acquiring other potable water suppliers within the Cayman
Islands.

         WE INTEND TO EXPAND OUR OPERATIONS IN BELIZE BY MODIFYING OUR AGREEMENT
WITH BWSL. We intend to continue negotiations with BWSL to extend the term of
our current water supply agreement in Ambergris Caye, to increase the guaranteed
minimum quantities supplied under this agreement, and to provide desalinated
water to other areas of Belize, particularly the cayes and coastal areas that
could benefit from desalination technology.

         WE INTEND TO EXPAND OUR OPERATIONS TO OTHER MARKETS WHERE THERE IS A
NEED FOR POTABLE WATER. We are currently in various stages of discussion to
supply potable water to several new markets, including the Bahamas, Mexico and
two other Caribbean countries. We may pursue these opportunities either on our
own or through joint ventures. So far we have focused on various locations
throughout the Caribbean and Central America.

         WE ALSO INTEND TO EXPAND OUR EXISTING AND FUTURE OPERATIONS INTO
COMPLEMENTARY SERVICES, SUCH AS WASTEWATER SERVICES, WHICH WE HAVE PROVIDED IN
THE PAST. Prior to the installation of a central wastewater system by the Cayman
Islands government, we provided wastewater services on Grand Cayman. Since we
have expertise in wastewater services, we may provide these services in the
future.



                                       7
<PAGE>


REVERSE OSMOSIS ("RO") TECHNOLOGY

         The conversion of saltwater to potable water is called desalination.
There are two primary forms of desalination: distillation and RO. Both methods
are used throughout the world and technologies are improving to lower the costs
of production. RO is a separation process in which the water from a pressurized
saline solution is separated from the dissolved material by passing it over a
semi-permeable membrane. An energy source is needed to pressurize the salinated
(or feed) water for pretreatment, which consists of fine filtration and in some
cases the addition of precipitation inhibitors. Pre-treatment removes suspended
solids, prevents salt precipitation and keeps the membranes free of
microorganisms. Next, a high-pressure pump enables the water to pass through the
membrane, while salts are rejected. The feed water is pumped into a closed
vessel where it is pressurized against the membrane. As a portion of the feed
water passes through the membrane, the remaining feed water increases in salt
content. This remaining feed water is discharged without passing through the
membrane. As the discharged feed water leaves the pressure vessel, its energy is
captured by an energy recovery device, which is used to pressurize incoming feed
water. The final step is post-treatment, which consists of stabilizing the
water, removing hydrogen sulfide and adjusting the pH and chlorination to
prepare it for distribution.

         We use RO technology to convert seawater to potable water. We believe
that this technology is the most effective and efficient conversion process for
our market. However, we are always seeking ways to maximize efficiencies in our
current processes and to investigate new and more efficient processes to convert
seawater to potable water. The equipment at our plants is among the most energy
efficient available and we monitor and maintain our equipment in an efficient
manner. As a result of our many years of experience in seawater desalination, we
believe that we have an expertise in the development and operation of
desalination plants, which is easily transferable to locations outside the
Cayman Islands.

RAW MATERIALS AND SOURCES OF SUPPLY

         All materials, parts and supplies essential to our business operations
can normally be obtained from multiple sources, except for the DWEER energy
recovery devices which are exclusively manufactured by DesalCo Ltd., and which
we use at our Governor's Harbour and West Bay RO plants in Grand Cayman. We do
not manufacture any parts or components for equipment essential to our business.
Our access to seawater for processing into potable water is granted through our
licenses and contracts with governments of the various jurisdictions in which we
have our operations.

LICENSES, FRANCHISES AND CONCESSIONS

         With respect to our operations in the Cayman Islands, we rely on our
exclusive franchise granted by the government of the Cayman Islands to produce
and supply potable water within our franchise area in Grand Cayman. This
franchise was granted in July 11, 1990 and is for a term of 20 years. This
franchise agreement grants us the right of first refusal to extend the
franchise.

         TECHNICAL BREACH OF CAYMAN ISLANDS' LICENSE

         Our license requires us to obtain prior government approval for an
issuance or transfer of shares which (i) exceeds 5% of the issued ordinary
shares of our company, or (ii) would, upon registration, result in any
shareholder owning more than 5% of the issued shares. More than 5% of our
ordinary shares are registered in the name of Cede and Co., the nominee for the
Depository Trust Company, which is a clearing agency for shares held by
participating banks and brokers. We do not believe that these shareholdings by
Cede and Co. constitute a breach of the intent of the license. We believe that
the purpose of this clause of the license is to allow the government to approve
significant shareholders of our company. Cede and Co. and Depository Trust
Company, however, act solely as the nominee for banks and brokers, and have no



                                       8
<PAGE>

beneficial ownership in the ordinary shares. Nevertheless, our Cayman Islands'
legal counsel has advised us that these shareholdings by Cede & Co., which were
not approved by the Cayman Islands' government, may be a technical breach of our
license.

         In August and September 1994, we completed an offering of 400,000
ordinary shares under Rule 504 of Regulation D of the Securities Act of 1933. In
September 1995, we completed a private placement of 100,000 ordinary shares plus
warrants to subscribe for an additional 100,000 ordinary shares under Regulation
S of the Securities Act 1933. In April 1996, we completed a public offering of
575,000 ordinary shares, and in June 2000 we completed a public offering of
773,000 ordinary shares. Based upon the advice of our Cayman Islands' legal
counsel, we determined that the license did not require the government's
approval to complete these offerings. However, if a court determined that the
government's approval of these offerings was required under the license, we
would be in breach of the license. Our Cayman Islands' legal counsel has advised
us that to make this determination, a court would have to disagree with our
interpretation of the license and dismiss several defenses, which would be
available to us. These defenses include acquiescence and waiver on the part of
the government with respect to these offerings.

         We have received a letter dated June 1, 2000, from an official of the
Cayman Islands' government, stating that a public offering of our ordinary
shares, which we completed in 1996 without the government's approval, was a
breach of our license. The letter is not clear as to whether the government also
views the completion of our 2000 public offering as a breach of our license. We
have responded to this letter and stated that we do not believe that we are in
breach of our license. We have been advised by our Cayman Islands' legal counsel
that the June 1st letter from the Cayman Islands government does not constitute
a formal "notice of breach of the license" as contemplated in the license. In
June 2000, December 2000, and in 2002 we met with representatives of the
Government to discuss this matter. At our latest meeting on March 18, 2002, the
Government gave us indications that it is considering revisions to our license,
which would clarify the definition of share ownership in order to favorably
resolve the uncertainty regarding the technical breach of our license. Other
than providing us with its June 1, 2000 letter, the Government has not taken any
other action in connection with our license to date.

SEASONAL VARIATIONS IN OUR BUSINESS

         Although, our water sales in the Cayman Islands, Belize and Bahamas are
seasonal, the variations between the periods are not significant. We normally
sell more water during the first and second quarters when greater numbers of
tourists are present. Our sales are also effected to some extent by the weather.
We sell less water during the third and fourth quarters, which normally
experience higher rainfall amounts than other times of the year.

COMPETITION

         With respect to our operations in the Cayman Islands, we do not compete
with other utilities within our licensed area. Although we have been granted an
exclusive franchise for our present service area, our ability to expand our
service area is limited at the discretion of the government. At the present
time, we are the only non-municipal public water utility on Grand Cayman. The
Cayman Islands government, through Water Authority-Cayman, supplies water to
parts of Grand Cayman which are not within our licensed area.

         With respect to our operations in Belize, our water supply contract
with BWSL is non-exclusive, and BWSL may seek contracts with other water
suppliers to meet their future needs in San Pedro, Ambergris Caye, Belize. There
are many companies throughout the world who provide desalination equipment and
turnkey water supply contracts. We are not able to say with any certainty who we
would compete against for future contracts in Belize.



                                       9
<PAGE>

         With respect to our Bimini operation, we supply water to a private
developer and do not have competitors. However if we are invited by the Bahamian
government to provide a proposal to expand our operations to other areas of
Bimini we can expect competition from companies such as Ionics, Inc. and
Vivendi.

         To implement our growth strategy outside our existing operating areas,
we will have to compete with companies such as Ionics Inc. and Vivendi. These
companies, among others, currently operate in areas in which we would like to
expand our operations. These companies already maintain world-wide operations
and have greater financial, managerial and other resources than our company. We
believe that our low overhead costs, knowledge of local markets and conditions,
and our efficient manner of operating desalinated water production and
distribution equipment will provide us competitive advantage on projects,
ranging in size from 5 million US gallons per day or less, in the Caribbean
basin and surrounding areas.

ENVIRONMENTAL MATTERS

         With respect to our Cayman Islands operations, although not required by
local government regulations, we operate our water plants in accordance with
guidelines of the Cayman Islands Department of Environment. Under these
guidelines, our plants may not have emissions of hydrogen sulfide at levels
greater than 20 milligrams per liter at the exit of the air scrubbers. We are
licensed by the government to discharge concentrated seawater, which is a
byproduct of our desalination process, into deep disposal wells. Our potable
water also meets the guidelines of the World Health Organization and the U.S.
Safe Drinking Water Act. In addition, noise levels at our plants cannot exceed
the standards established by the U.S. Occupational Safety and Health Act. To
date, we have not received any complaints from any regulatory authorities
concerning hydrogen sulfide emissions or noise levels at our plants.

         With respect to our Belize and Bahamas operations, we are required by
our water supply contracts to take all reasonable measures to prevent pollution
of the environment. We are licensed by the Belize and Bahamian governments to
discharge concentrated seawater, which is a byproduct of our desalination
process, into deep disposal wells. We operate our plants in a manner so as to
minimize the emission of hydrogen sulfide gas into the environment. We are not
aware of any existing or pending environmental legislation which may effect our
operations in Belize and the Bahamas. To date we have not received any
complaints from any regulatory authorities regarding hydrogen sulfide gas
emission, nor any other matter relating to operations.

EMPLOYEES

         We presently employ 37 persons in the Cayman Islands, four of whom are
executive and management personnel who have an average of 16 years experience
with our company or in a directly related position. Nine employees are engaged
in administrative and clerical positions. The remaining staff are engaged in
engineering, plant maintenance and operations, pipe laying and repair, leak
detection, new customer connections, meter reading and laboratory analysis of
water quality. Our staff has significant experience and on average have worked
with us for 8 years with three of the employees having worked over 20 years with
us. We presently employ six persons in Belize to manage and operate our plant.
We presently employ one person in the Bahamas to manage and operate our water
plant and distribution system on South Bimini. Our employees are not parties to
a collective bargaining agreement. We consider our relationship with our
employees to be good.



                                       10
<PAGE>



ITEM 2.       PROPERTIES

         We own our Governor's Harbour facility in Grand Cayman, which consists
of a 3.2 acre site, including 485 feet of waterfront, and an 8,745 square foot
building which contains the water treatment facility. We own two storage
reservoirs with a total capacity of 2.0 million U.S. gallons of water at our
Governor's Harbour site. The property surrounding the facility has yet to be
fully developed, although these areas are beginning to be developed for
residential and tourist accommodations. The current production capacity of the
Governor's Harbour plant is 1.2 million U.S. gallons per day.

         This RO plant is operated and maintained by OCL under a separate water
purchase agreement.

         The primary components of the Governor's Harbour plant are:

         o  five feedwater supply wells that average a depth of 140 feet. The
            combined pumping capability is approximately 3,750 U.S. gallons per
            minute;

         o  two brine disposal wells drilled to an approximate depth of 200
            feet;

         o  two positive displacement pumps with a pumping capacity of 410 U.S.
            gallons per minute each;

         o  two "back up" centrifugal pumps with a pumping capacity of 300 U.S.
            gallons per minute each;

         o  77 vessels (measuring approximately 265" in length and 8" in
            diameter) each housing six spiral wound seawater membranes
            (measuring approximately 40" in length and 8" in diameter);

         o  a work exchanger energy recovery system;

         o  an air scrubber to remove the hydrogen sulfide from the product
            water, which is capable of scrubbing approximately 800 U.S. gallons
            of water per minute; and

         o  Paragon TNT v5.0 control software on Gateway Hardware with I/O
            System Opto 22 and Optomux interface controller to control the
            operations of the plant.

         We own our West Bay facility in Grand Cayman, which consists of a 6.1
acre site in West Bay. The plant began operating on June 1, 1995 and was
expanded in February 1998 and February 2000. On this site, we have a 2,600
square foot building which houses our water production facilities, a 2,400
square foot building which houses the potable water distribution pumps, a water
quality testing laboratory, office space and water storage capacity consisting
of three 1.0 million U.S. gallon potable water tanks. The current production
capacity of the West Bay plant is 710,000 U.S. gallons per day.

         The primary components of this plant are:

         o  three feedwater supply wells that average a depth of 140 feet. The
            combined pumping capability is approximately 2,250 U.S. gallons per
            minute;

         o  one brine disposal well drilled to an approximate depth of 200 feet;

         o  two positive displacement pumps with a pumping capacity of 386 U.S.
            gallons per minute each;

         o  43 vessels (measuring approximately 280" in length and 8" in
            diameter) each housing seven spiral wound seawater membranes
            (measuring approximately 40" in length and 8" in diameter);

         o  one hydraulic turbo energy recovery system;



                                       11
<PAGE>

         o  one work exchanger energy recovery system;

         o  an air scrubber to remove the hydrogen sulfide from the product
            water, which is capable of scrubbing 1,000 U.S. gallons of water per
            minute; and

         o  an Allen Bradley SLC500 Programmable Logic Controller (PLC) linked
            to a Compaq PC computer running Windows NT 4.0 and Wintelligent View
            interfaced with the PLC to control the operation of the plant.

         On February 1, 2002, we purchased the Britannia water production and
distribution facility in Grand Cayman, which consists of four seawater RO plants
with a combined nominal production capacity of 440,000 US gallons of water per
day, an 840,000 US gallon bolted steel water tank, potable water high service
pumps, and various ancillary equipment to support the operation. We have entered
into a lease of the 0.73 acre site and steel frame building which houses the
plant, from Cayman Hotel and Golf Inc., for a term of 25 years at an annual rent
of US$1.00.

         The primary components of this plant are:

         o  six feed water supply wells drilled to a depth of approximately 100
            feet;

         o  one brine disposal well drilled to a depth of approximately 150
            feet;

         o  four skid-mounted seawater RO plants with desalinated water
            production capacities of 110,000 US gallons per day each, and
            utilizing electric powered high pressure pumps and Calder energy
            recovery devices;

         o  one potable water ozonation system used to neutralize hydrogen
            sulphide and disinfect the product water;

         o  one 840,000 US gallon bolted steel tank used to store potable water;

         o  one high service pump station used to pump water from the bolted
            steel tank to our distribution pipeline.

         We own our Seven Mile Beach and West Bay potable water distribution
systems in Grand Cayman. The combined systems consist of approximately 65 miles
of polyvinyl chloride and polyethylene water pipes, valves, curb stops, meter
boxes, and water meters installed in accordance to accepted engineering
standards in the United States of America.

         We own our San Pedro water production facility in Ambergris Caye,
Belize. The plant consists of a one story concrete block building, which
contains a seawater RO water production plant with a production capacity of
420,000 US gallons per day. We lease from the Government of Belize at a annual
rent of BZ$1.00, the parcel of land on which our plant is located. The lease
commenced on April 27, 1993 and the term is for 18 years.

         The primary components of this plant are:

         o  two feed water supply wells drilled to an approximate depth of 100
            feet;

         o  one brine disposal well drilled to a depth of approximately 150
            feet;

         o  two multi-stage vertical turbine high pressure pumps with pumping
            capacities of 400 U.S. gallons per minute each;

         o  two Caterpillar 3406 diesel engines which are the primary power
            sources for the high pressure pumps;

         o  two 250 horse power electric motors which act as backup power
            sources for the high pressure pumps;


                                       12
<PAGE>


         o  18 pressure vessels each housing six spiral wound seawater RO
            membranes;

         o  two hydraulic turbo energy recovery systems;

         o  one air scrubber to remove the hydrogen sulfide from the product
            water;

         o  one calcite bed and ancillary pumps to increase the alkalinity of
            the product water; and

         o  an Allen Bradley PLC5 Programmable Logic Controller (PLC) linked to
            a Compaq PC computer running Windows NT 4.0 and Citect MMI software
            and interfaced with the PLC to control the operation of the plant.

         We own our Bahamas water production facility in South Bimini, Bahamas.
The plant consists of two 40 foot long standard refrigerated shipping
containers, which contain a seawater RO water production plant with a rated
capacity of 115,000 US gallons per day, a 250,000 US gallon bolted steel potable
water tank, and a high service pump skid. The facility is located on a parcel of
land owned by South Bimini International Ltd., and we are allowed, under the
terms of our water supply agreement, to utilize the land for the term of the
agreement, without charge.

         The primary components of this plant are:

         o  two feed water supply wells drilled to a depth of approximately 100
            feet;

         o  one brine disposal well drilled to a depth of approximately 150
            feet;

         o  one containerized seawater RO plant with desalinated water
            production capacity of 115,000 US gallons per day each, and
            utilizing electric powered high pressure pumps and hydraulic
            turbocharger energy recovery devices;

         o  one potable water ozonation system used to neutralize hydrogen
            sulphide and disinfect the product water;

         o  one 250,000 US gallon bolted steel tank used to store potable water;
            and

         o  one high service pump station used to pump water from the bolted
            steel tank to our customer's pipeline.

         In addition to the properties where our water plants are located, we
lease approximately 3,200 square feet of space for our executive offices at
Trafalgar Place, West Bay Road, Grand Cayman Island. We have an annual lease
expiring on January 31, 2003, with a yearly extension provision until January
31, 2005, on this property.

         Our Governor's Harbour site includes a waterfront portion. This
waterfront portion is not essential to our operations. We initially bought this
property to enhance the value of the entire Governor's Harbour site if we
decided to sell the site or develop it for other purposes. We purchased this
water frontage in 1992 from Hurricane Hideaway Ltd. At the same time, we
purchased Hurricane Hideaway Ltd., which owns certain development rights and
which is now a wholly owned subsidiary of our company. We believe that our
properties are suitable for the conduct of our current operations for the
foreseeable future.



                                       13
<PAGE>



ITEM 3. LEGAL PROCEEDINGS

         We are not currently a party to any ongoing or pending legal
proceeding.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         Our ordinary shares of common stock ("ordinary shares") are listed on
the Nasdaq National Market and trade under the symbol "CWCO". Our ordinary
shares are not traded on any market other than the Nasdaq National Market.
Listed below, for each quarter of the last two fiscal years, are the high and
low bid prices for the ordinary shares on the Nasdaq National Market.

                                            HIGH       LOW
                                            ----       ---

         First Quarter 2000               $ 7.13     $ 6.00
         Second Quarter 2000                8.25       6.00
         Third Quarter 2000                 8.00       6.13
         Fourth Quarter 2000                9.13       6.19

         First Quarter 2001                 9.88       6.88
         Second Quarter 2001                9.85       7.78
         Third Quarter 2001                12.00       8.90
         Fourth Quarter 2001               12.00       9.95


         The high and low bid prices in the table reflect interdealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

         There is no trading market for our redeemable preferred shares, which
are only issued to, or purchased by, long-term employees of our company and
which must be held by these employees for a period of four years before they
vest.



                                       14
<PAGE>


         On December 10, 2001, we issued options to purchase 30,000 ordinary
shares having an exercise price of $11.17 to a director. These options are
exercisable until December 9, 2004. On December 31, 2001, we issued options to
purchase an additional 105,486 ordinary shares having an exercise price of
$10.84 to three other directors and one executive officer. These options are
exercisable until March 10, 2005. The options issued on December 10, 2001, were
exempt from registration under Section 4(2) of the Securities Act of 1933
because the director is a sophisticated investor who has knowledge of all
material information about us. The options issued on December 31, 2001 were
exempt from registration under Regulation S promulgated under the Securities Act
of 1933 because the options were offered and sold outside of the United States
to non-U.S. persons, as defined in Regulation S. All of the options were issued
as consideration for services that the directors and executive officer provided
to us during fiscal year 2001.

HOLDERS

         On March 19, 2002, we had 573 holders of record of the ordinary shares.
Management believes that of the ordinary shares held of record, approximately
15% are registered to residents of the Cayman Islands and 85% are registered to
residents of other countries, primarily the United States. All of the redeemable
preferred shares are owned by residents of the Cayman Islands.

         Other than for the terms of our license described in "ITEM 1.
BUSINESS," our company is not directly or indirectly owned or controlled by
another corporation or by any government.

DIVIDENDS

         We have paid cash dividends on our ordinary shares since 1985. The
board of directors' policy is to pay cash dividends out of accumulated profits
on a quarterly basis, if funds are available. As of February 29, 2000, our board
of directors have established a policy, although not a binding obligation, that,
subject to annual review by the board of directors, our company will maintain a
dividend pay-out ratio in the range of 50% to 60% of net income. However, our
payment of any future cash dividends will still depend upon our earnings,
financial condition, capital demand and other factors. The board of directors
declares and approves all interim dividends. The final dividend in each year, if
any, is recommended by the board of directors and must be, and has always been,
approved by our shareholders before distribution.

         Listed below, for each quarter of the last two fiscal years, is the
amount of interim dividends, in U.S. dollars, declared on our issued and
outstanding ordinary shares and redeemable preferred shares. No final dividend
was declared during the last two fiscal years.

         First Quarter 2000              $ 0.08    Per Share
         Second Quarter 2000               0.08    Per Share
         Third Quarter 2000                0.08    Per Share
         Fourth Quarter 2000               0.10    Per Share

         First Quarter 2001                0.10    Per Share
         Second Quarter 2001               0.10    Per Share
         Third Quarter 2001                0.10    Per Share
         Fourth Quarter 2001               0.10    Per Share



                                       15
<PAGE>


EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

         Our company is not subject to any governmental laws, decrees or
regulations in the Cayman Islands which restrict the export or import of
capital, or that affect the remittance of dividends, interest or other payments
to non-resident holders of our securities. The Cayman Islands does not impose
any limitations on the right of non-resident owners to hold or vote our ordinary
shares other than stated below. There are no exchange control restrictions in
the Cayman Islands.

        In accordance with the terms of our license, the Cayman Islands'
government has the right to approve, in advance, any transfer of the ordinary
shares which increases the holdings of any shareholder who already owns more
than 5% of the issued share capital of the company or any transfer which would
increase the ownership of any existing or new shareholder above 5%. In
accordance with our Articles of Association, all share transfers are subject to
the approval of the board of directors at their sole discretion. To date, the
board of directors has never exercised the right to decline to register a
transfer. This provision has been incorporated into the our Articles of
Association in order to ensure that the board of directors is not put into a
position where it is legally obligated to register a transfer which would cause
our company to be in breach of the license. Although not intended as such, this
provision may discourage or prevent a change in control of our company by merger
or otherwise.

         Belize has foreign currency exchange control laws and any purchase of
United States dollars must be made through the Central Bank of Belize. Under our
contract with BWSL, we are paid for our water in Belize dollars. Our Belizean
subsidiary has been provided with a guarantee from the Government of Belize to
repatriate any and all of the Belize Water Ltd. earnings in United States
dollars to any foreign destination.

         The Commonwealth of the Bahamas has foreign currency exchange control
laws and any purchase of United States dollars must be made through the Central
Bank of the Bahamas. We are paid by our customer for water sold by our Bahamian
operation in United States dollars, and expenses are also incurred in United
States dollars, and therefore do not have any requirement to exchange currency
in the Bahamas.

TAXATION

         The Cayman Islands presently impose no taxes on profit, income, capital
gains, or appreciations of our company and no taxes are currently imposed in the
Cayman Islands on profit, income, capital gains, or appreciations of the holders
of our securities or in the nature of estate duty, inheritance, or capital
transfer tax.

         A major source of revenue to the Cayman Islands government is a 7.5% or
9% stamp tax, depending on location, on the transfer of ownership of land in the
Cayman Islands. During the period of November 14, 2001 to November 13, 2002 the
stamp tax rate was temporarily set at 5%. To prevent stamp tax avoidance by
transfer of the ownership of the shares of a company, which owns land in the
Cayman Islands (as opposed to transfer of the land itself), The Land Holding
Companies (Share Transfer Tax) Law was passed in 1976. The effect of this law is
to charge a company, which owns land or an interest in land in the Cayman
Islands a tax based on the value of its land or interest in land attributable to
each share transferred. The stamp tax calculation does not take into account the
proportion which the value of a company's Cayman land or interest bears to its
total assets and whether the intention of the transfer is to transfer ownership
of a part of a company's entire business or a part of its Cayman land or
interest. We requested the Cayman Islands government exempt us from the
landholding company's tax, which our company is required to pay on the transfer



                                       16
<PAGE>
of our shares. Prior to becoming quoted on Nasdaq, paid this tax on private
share transfers. We have never paid tax on transfers of our publicly traded
shares. Other local companies whose businesses are not primarily related to the
ownership of land, and whose shares are publicly traded have either received an
exemption from the tax, or have not been pursued by government for payment of
the tax. We believe that the likelihood that government will seek to collect
this tax on transfers of our publicly traded shares is remote and we are
currently engaged in discussions with the Cayman Islands government to obtain an
exemption.

         As disclosed in Part I, Item 1 under the discussion of our Belize
Operations, the Government of Belize has exempted our subsidiary, Belize Water
Ltd., from all duties and sales taxes until January 2003 and company taxes until
January 2004. The Government of Belize has confirmed its commitment to support
all future applications for extensions or additional tax exemptions for the life
of the water supply contract.

         As disclosed in Part I, Item 1 under the discussion of our Bahamian
Operations, we have not been granted any tax exemptions for our Bahamian
operations. We believe that we may be subject to a tax ranging from 1% to 2% on
the gross revenues generated by our Bahamian operations and are currently
reviewing the matter with our Bahamian attorneys. Our potential tax liability
for our 2001 sales in the Bahamas is immaterial.

DESCRIPTION OF SECURITIES

ORDINARY SHARES

         We are authorized to issue 9,900,000 ordinary shares, par value CI$1.00
per share. At March 19, 2002, 3,920,313 ordinary shares were issued and
outstanding. Holders of ordinary shares may cast one vote for each share held of
record at all shareholder meetings. All voting is non-cumulative. Holders of
more than 50% of the outstanding shares present and voting at an annual meeting
at which a quorum is present are able to elect all of our directors. Holders of
ordinary shares do not have preemptive rights or rights to convert their
ordinary shares into any other securities. All of the outstanding ordinary
shares are fully paid and non-assessable.

         Holders of ordinary shares are entitled to ratably receive dividends,
if any, distributed out of our accumulated profits. Subject to the preferential
rights of holders of the redeemable preferred shares, upon liquidation, all
holders of ordinary shares are entitled to participate pro rata in our assets,
which are available for distribution.

         Other than 3,172 ordinary shares, for a member of senior management in
Belize, no ordinary shares have been set aside for any employee share plans.

REDEEMABLE PREFERRED SHARES

         We are authorized to issue 100,000 redeemable preferred shares, par
value CI$1.00 per share. At March 19, 2002, 25,195 redeemable preferred shares
were issued and outstanding.

         Holders of redeemable preferred shares may cast one vote for each share
held of record at all shareholder meetings and are entitled to receive ratably
dividends, if any, distributed out of our accumulated profits. All voting is on
a non-cumulative basis. In the event of a liquidation of our company, the
redeemable preferred shares rank in preference to the ordinary shares with
respect to the repayment of the par value of redeemable preferred shares plus
any premium paid or credited on the purchase of the shares. Under our employee
share plan, we may redeem any redeemable preferred shares issued to an employee.
The ordinary shares and the redeemable preferred shares rank equally in all
other respects.

         Currently, no shares have been set aside for our employee share
incentive plan.



                                       17
<PAGE>


CLASS B ORDINARY SHARES

         In 1997, we adopted an option deed under which option holders may
exercise rights to purchase our class B ordinary shares, par value CI$1.00 per
share. As of the date of this Annual Report, there are no class B ordinary
shares issued and outstanding.

         Holders of class B ordinary shares are entitled to the same voting
rights and dividends paid on ordinary shares and redeemable preferred shares,
and we cannot pay a dividend on the ordinary shares without paying the same
dividend on the class B ordinary shares, and vice versa. We cannot redeem the
class B ordinary shares, and the holders of the class B ordinary shares are not
entitled to any repayments of capital upon the dissolution of our company.

         If we enter into a transaction in which ordinary shares are exchanged
for securities or other consideration of another company, then the class B
ordinary shares will be also be exchanged pursuant to a formula. The class B
ordinary shares and the ordinary shares rank equally in all other respects.

OUTSTANDING WARRANTS

         On April 9, 1996, we issued warrants to purchase up to 50,000 ordinary
shares at $6.30 per share to the underwriter of our initial public offering. All
of these warrants expired on April 3, 2001.

OPTION DEED

         In 1997, in response to an attempt by Argyle/Cay Water, Ltd. to acquire
up to 50% of our company, our board of directors approved an option deed, which
is similar to a "poison pill." The option deed may delay or prevent a change in
control of our company.

         The option deed grants to each holder of an ordinary and redeemable
preferred share an option to purchase one one-hundredth of a class B ordinary
share at an exercise price of $37.50, subject to adjustment. If a takeover
attempt occurs, each shareholder would be able to exercise the option and
receive class B ordinary shares with a value equal to twice the exercise price
of the option. Under circumstances described in the option deed, instead of
receiving ordinary shares, we may issue to each shareholder cash or other equity
or debt securities of our company, or the equity securities of the acquiring
company, as the case may be, with a value equal to twice the exercise price of
the option.

         Takeover events that would trigger the options include a person or
group becoming the owner of 20% or more of our outstanding ordinary shares or
the commencement of, or announcement of an intention to make, a tender offer or
exchange offer, which upon completion would result in the beneficial ownership
by a person or group of 20% or more of the outstanding ordinary shares.
Accordingly, exercise of the options may cause substantial dilution to a person
who attempts to acquire our company.

         The options are attached to each ordinary share and redeemable
preferred share and presently have no monetary value. The options will not trade
separately from our shares unless and until they become exercisable. The
options, which expire on July 31, 2007, may be redeemed, at the option of our
board of directors, at a price of CI$.01 per option at any time until ten
business days following the date that a group or person acquires ownership of
20% or more of the outstanding ordinary shares. Any amendment to the option deed
is subject to the terms and conditions of our agreement with Argyle/Cay-Water,
Ltd. described in the section of this Annual Report entitled "ITEM 10. DIRECTORS
AND EXECUTIVE OFFICERS OF THE REGISTRANT"



                                       18
<PAGE>


         The option deed may have certain anti-takeover effects, although it is
not intended to prevent any acquisition or business combination that is at a
fair price and otherwise in the best interests of our company and our
shareholders as determined by our board of directors. However, a shareholder
could potentially disagree with the board's determination of what constitutes a
fair price or the best interests of our company and our shareholders.

         The full terms and conditions of the options are contained in an option
deed between us and our option agent, American Stock Transfer & Trust Company.
The above description of the options is a summary only and does not purport to
be complete. You should read the entire option deed to understand the terms of
the options.

REPURCHASED SHARES

         During 2001, we repurchased 25,000 shares at an average cost of $10.86.
Under Cayman Islands law, shares that we repurchase out of capital are treated
as cancelled upon repurchase, and our issued share capital is reduced by the par
value of those shares, with the difference being adjusted to additional paid up
capital. Also during 2001, we treated the purchase of our treasury shares of
8,000, 102,752 and 79,100 in 1998, 1999 and 2000, respectively, in the
Consolidated Balance Sheet and the Consolidated Statement of Shareholders'
Equity as cancelled on repurchase.

TRANSFER AGENT

         The transfer agent for the ordinary shares is American Stock Transfer &
Trust Company, New York, New York.



                                       19
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA

       As a result of a management decision we have voluntarily adopted
accounting principles generally accepted in the United States of America
("US-GAAP") effective January 1, 2000. Previously, annual financial statements
were prepared in accordance with International Accounting Standards ("IAS"). As
a result all prior periods' financial information presented in the selected
financial data have been prepared in accordance with "US-GAAP".

       The consolidated financial statements include the accounts of our
wholly-owned subsidiaries Belize Water Ltd, Commonwealth Water Limited, Cayman
Water Company Limited and Hurricane Hideaway Ltd. The operating results of
Belize Water Ltd. have been included in the financial statements since the date
of the acquisition (July 21, 2000). All inter-company balances and transactions
have been eliminated.

       Set forth below is selected financial data based upon our consolidated
financial statements. The table contains information (expressed in US dollars)
derived from our audited consolidated financial statements for the five-year
period ended December 31, 2001. This selected financial data should be read in
conjunction with the more detailed financial statements and related notes
thereto contained elsewhere in this Annual Report. The audited consolidated
financial statements for the years ended December 31, 1998 and 1997 and
accountant's reports thereon are not included in this Annual Report.

<TABLE>
<CAPTION>

                                                               YEAR ENDED DECEMBER 31,
                                       ---------------------------------------------------------------------------
                                           2001            2000            1999            1998            1997
                                       -----------     -----------     -----------     -----------     -----------
<S>                                    <C>             <C>             <C>             <C>             <C>
STATEMENT OF INCOME DATA:
  Water Sales                          $11,026,923     $ 9,576,959     $ 7,936,118     $ 7,925,232     $ 7,214,557
  Net Income (1)                         2,764,573       2,404,820       1,569,717       1,451,933       1,112,402

BALANCE SHEET DATA:
  Total Assets                          22,721,178      21,845,672      16,431,321      15,594,021      14,814,817
  Long Term Debt Obligation              1,213,804       1,131,986       1,926,786       2,470,112       1,769,746
  Long Term Purchase Obligation                 --              --              --         320,141       1,265,275
  Redeemable preferred stock                30,234          40,361          49,270          52,686          40,906

DIVIDENDS DECLARED PER SHARE                  0.40            0.34            0.20            0.19            0.13
BASIC EARNINGS PER SHARE                      0.71            0.68            0.51            0.47            0.37
BASED ON NUMBER OF SHARES                3,897,969       3,532,501       3,044,293       3,055,845       2,986,216

DILUTED EARNINGS PER SHARE                    0.69            0.67            0.49            0.45            0.35
BASED ON WEIGHTED NUMBER OF SHARES       3,999,691       3,616,271       3,188,048       3,191,583       3,136,574
</TABLE>


(1)      Net Income represents income after a cumulative change in accounting
         principle in 1999 of $117,576 (see ITEM 7. MANAGEMENT'S DISCUSSION AND
         ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Change in
         Accounting Principle), and an exceptional item of $97,886 in 1997
         representing the remaining book value of the vapor compression
         equipment previously used by our company that was written down to zero.



                                       20
<PAGE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

OVERVIEW

         Our objective is to provide water services in areas where the supply of
potable water is scarce and where the use of RO technology to produce potable
water is economically feasible. By focusing on this market, we believe that we
can provide a superior financial return to our investors. To increase share
value and maintain dividend payouts in accordance with current company policy,
we need to expand our revenues by developing new business opportunities both
within our current service areas, and in new areas. We need to maintain our high
operating efficiencies by adhering to our strict equipment maintenance and water
loss mitigation programs in order to achieve gross profit margins between 40%
and 45%. We further believe that many Caribbean basin and adjacent countries,
while being water scarce, also present opportunities for operation of our plants
in limited regulatory settings which are less restrictive than the highly
regulated markets of North America, which promotes cost effective operation of
our equipment.

         We have been operating our business on Grand Cayman Island since 1973
and have been using RO technology to convert seawater to potable water since
1989. There is no natural supply of fresh water on the Cayman Islands. We
currently have an exclusive license from the Cayman Islands government to
process potable water from seawater and then sell and distribute that water by
pipeline to Seven Mile Beach and West Bay, Grand Cayman Island. We obtain water
from our three RO plants on Grand Cayman (Governor's Harbour plant, West Bay
plant and our newly acquired Britannia plant), which together are capable of
producing 2.02 million U.S. gallons per day on a reliable basis, or
approximately 755 million U.S. gallons per year. We own our RO plants and
substantially all of the 65 miles of our underground distribution
infrastructure. For the year ended December 31, 2001, we supplied 474.1 million
U.S. gallons of water to hotels, residential customers, condominiums, other
commercial customers and government facilities on Grand Cayman.

         On July 21, 2000, we acquired Seatec Belize Ltd., a company organized
under the laws of Belize. Seatec Belize Ltd., now renamed Belize Water Ltd.,
owns and operates a RO plant in Ambergris Caye, Belize and provides potable
water to BWSL under contract. BWSL provides water and sewage services to the
mainland Belize, and contracts us to produce potable water on Ambergris Caye,
which has no natural source of fresh water. Our RO seawater conversion plant, is
capable of producing 420,000 U.S. gallons per day or approximately 153 million
U.S. gallons per year, for BWSL, who distributes the water to residential,
commercial, and tourist properties in Ambergris Caye, Belize. During the year
ended December 31, 2001, we supplied approximately 93.8 million U.S. gallons to
BWSL.

         Since July 11, 2001, we have been supplying desalinated water to South
Bimini International Ltd. under a ten-year water supply agreement. This Bahamian
company owns and operates resort properties on South Bimini Island, Bahamas and
we provide potable water to these properties. The island of South Bimini has no
natural source of fresh water. Our Bahamas operations provides water from one RO
seawater conversion plant, capable of producing 115,000 U.S. gallons per day or
approximately 42 million U.S. gallons per year, to South Bimini International
Ltd. This water is distributed to the condominiums, marina and hotel property in
South Bimini, Bahamas. For the year ended December 31, 2001, we supplied
approximately 1 million U.S. gallons to South Bimini International Ltd. Sales in
2001 were low because we only supplied water from July 2001, and the condominium
development is in its initial stages. We expect the demand for water from our
plant to increase as additional phases are completed at the Bimini Sands
development.



                                       21
<PAGE>

         Although at a slower pace than in previous years, development is taking
place on Grand Cayman Island, and particularly in our licensed area to
accommodate both the growing local population and the tourism market. Because
our license requires us to supply water to developments in our licensed area,
the planning department of the Cayman Islands government routinely advises us of
proposed developments in our licensed area. This advance notice allows us to
manage our production capacity to meet anticipated demand. We believe that we
have, or have contracted for, a sufficient supply of water to meet the
foreseeable future demand.

         We installed our first RO plant in December 1989 at Governor's Harbour,
located in the Seven Mile Beach area, through a water purchase agreement with
OCL. Under the agreement, OCL operates the plant, and we must purchase a minimum
volume of water from them. In addition, OCL has to provide us additional volumes
of water upon demand up to a fixed level, and any excess on a best efforts
basis. The agreement requires a plant capacity of 1.1 million U.S. gallons per
day, which is the maximum capacity of the plant. The agreement was amended in
December 2000 to increase the production capacity of the plant to 1.2 million US
gallons per day. The agreement expires on December 31, 2004, at which time we
will have fulfilled our obligations under the agreement and we will be the sole
operator of the plant. Upon expiration of our agreement with OCL, we expect that
our operating costs at Governor's Harbour will decrease significantly.

         In 1995, we installed our second RO seawater conversion plant, at our
West Bay site. We own and are responsible for operation and maintenance of the
West Bay plant. This plant is capable of producing 710,000 U.S. gallons per day
of potable water.

         In February 2002, we purchased our third RO seawater conversion plant,
which was previously owned and operated by Cayman Hotel & Golf Inc., a company
which owns and operates the Hyatt Hotel and Britannia Golf Course, and developed
the Britannia condominiums and villas. This plant is capable of producing
440,000 US gallons of desalinated water per day.

OUR OPERATIONS UNDER THE LICENSE IN THE CAYMAN ISLANDS

         Our exclusive operational license was issued to us by the Cayman
Islands government under The Water (Production and Supply) Law of 1979. The
license terminates, unless further renewed, on July 11, 2010.

         Two years prior to the expiration of the license, we have the right to
negotiate with the government to extend the license for an additional term.
Unless we are in default under the license, the government may not grant a
license to any other party without first offering the license to us on terms
that are no less favorable than those which the government offers to a third
party.

         We must provide, within our licensed area, any requested piped water
service which, in the opinion of the Executive Council of the Cayman Islands
government, is commercially feasible. Where supply is not considered
commercially feasible, we may require the potential customer to contribute
toward the capital costs of pipe laying (Advances in Aid of Construction). We
then repay these advances to the customer, without interest, by way of a
discount of 10% on future billings for water sales until this indebtedness has
been repaid. We have been installing additional pipeline when we consider it to
be commercially feasible, and the Cayman Islands government has never objected
to our determination regarding commercial feasibility.



                                       22
<PAGE>


         Under the license, we pay a royalty to the government of 7.5% of our
gross US gallon potable water sales revenue. The base selling price of water
under the license presently varies between $18.96 and $22.74 per 1,000 U.S.
gallons, depending upon the type and location of the customer and the monthly
volume of water purchased. The license provides for an automatic adjustment for
inflation/deflation on an annual basis, subject to temporary limited exceptions,
and an automatic adjustment for the cost of electricity on a monthly basis. The
Water Authority (Cayman), on behalf of government, reviews and approves the
calculations of the price adjustments for inflation and electricity costs.

         If we want to increase our prices for any reason other than inflation,
we have to request prior approval of the Executive Council of the Cayman Islands
government. If the parties fail to agree, the matter is referred to arbitration.
The last price increase that we requested, other than automatic inflation
adjustments since 1990, was granted in full in June 1985.

RESIDENTIAL AND COMMERCIAL OPERATIONS IN THE CAYMAN ISLANDS

         We enter into standard contracts with hotels, condominiums and other
properties located in our licensed area to provide potable water to such
properties. We currently have agreements on differing terms and rates to supply
potable water to the 309-room Marriott Hotel and the 343-room Westin Hotel, the
Hyatt Hotel and Britannia Golf Course, and to supply non-potable water to the
SafeHaven Golf Course. We bill on a monthly basis based on metered consumption.
Receivables are typically collected within 30 to 35 days after the billing date
and receivables not collected within 45 days subject the customer to
disconnection from our water service. In 2001, bad debts represented less than
1% of our total sales for the year. Customers who have had their service
disconnected must pay re-connection charges.

         In the Seven Mile Beach area, our primary customers are the hotels and
condominium complexes which serve the tourists. In the West Bay area, our
primary customers are residential homes. Occasionally, we also supply to, or buy
from, on an as-needed basis, the Water Authority-Cayman, which serves the
business district of George Town and other parts of Grand Cayman Island.

WASTEWATER SERVICES IN THE CAYMAN ISLANDS

         We began providing sewerage services on Grand Cayman in 1973. In 1987
the Cayman Islands government, through Water Authority-Cayman, constructed a
public sewerage system in part of the Seven Mile Beach area where Governor's
Harbour is located. On September 1, 1988, Water Authority-Cayman began
processing sewage delivered by the pipelines and lift stations in that area. We
stopped our processing of sewage on that date. Water Authority-Cayman currently
directly bills our former sewerage customers for its services. In October 2001,
we reached an agreement with the Water Authority-Cayman that they will take over
the ownership and operation of two remaining sewage lift stations, which we
presently operate. Our present obligation under this agreement is to replace
certain minor pieces of equipment in these stations prior to take over by the
Water Authority-Cayman. We expect the take over to occur in May 2002. No revenue
was earned for wastewater services during 2001.



                                       23
<PAGE>


DEMAND FOR WATER IN THE CAYMAN ISLANDS

         In the past, demand on our pipeline distribution has varied throughout
the year. However, an increase in year-round tourism in recent years has created
more uniform demand for water throughout the year. Demand depends upon the
number of tourists visiting the Cayman Islands and the amount of rainfall during
any particular time of the year. In general, 75% of tourists come from the
United States. Our operating results in any particular quarter are not
indicative of the results to be expected for the full fiscal year. The table
below lists the total volume of water we supplied on a quarterly basis for the
years ended December 31, 2001, 2000, 1999, 1998 and 1997 to all our customers:


                    2001        2000        1999        1998        1997
                   -------     -------     -------     -------     -------
                            (in thousands of U.S. gallons)
First Quarter      119,115     125,869     107,031     109,255     100,853
Second Quarter     129,305     117,766     113,007     108,334      98,473
Third Quarter      118,733     100,259      90,888      90,950      87,483
Fourth Quarter     106,985     107,404      90,421      92,011      89,941
                   -------     -------     -------     -------     -------
Total              474,138     451,298     401,347     400,550     376,750
                   =======     =======     =======     =======     =======

OUR OPERATIONS UNDER THE CONTRACT IN BELIZE

         We have entered into a contract with BWSL to supply a minimum of
135,000 US gallons of water per day to BWSL expiring in 2011. At the expiry of
the contract, BWSL may at its option extend the term of the agreement or
purchase the plant outright.

         The base price of water supplied, and adjustments thereto, are
determined by the terms of the contract, which provides for adjustments based
upon the movement in the government price indices specified in the contract, as
well as, monthly adjustments for changes in the cost of diesel fuel and
electricity.

         We bill on a monthly basis based on metered consumption. Receivables
are due within 21 days after the billing date. Interest of 1.5% per year is
charged on any delayed payments. We have had collection problems with BWSL in
the past, however, we are working on a solution that will ensure payment will be
made when required. As at the date of this Annual Report, BWSL is current on its
outstanding balance, with exception of interest, which has accrued on their
account. In 2001, we had no bad debts for our Belize sales for the year.

         BWSL has submitted claims for compensation for damages, which it
believes resulted from our equipment failures during August and September 2001.
They have further claimed for the rectification of a minor mistake in the water
rate inflation adjustment formula in our agreement, a mistake which dates back
to November 1995. We have fully settled one claim for compensation which
resulted from an equipment failure during the first week of August 2001 by
crediting their account $14,864, but have rejected their other claim for
compensation relating to the temporary reduction of our production capacity on
another occasion. While we were not able to meet BWSL's demand for water during
certain periods when our equipment malfunctioned, we were able to provide
quantities of water well in excess of the minimum amount required in our
agreement.



                                       24
<PAGE>

         We are currently engaged in discussions regarding BWSL's claim for
rectification of the inflation adjustment formula, and to collect unpaid
interest, which has accrued on their account because of their late payment of
invoices. At the date of this Annual Report, we have offered $38,790 to settle
all of their outstanding claims, and have agreed to correct the inflation
adjustment formula in the agreement. We believe that correcting this minor
mistake in the agreement will not have a significant impact on the profitability
of our Belize operations going forward, and that we will collect the outstanding
interest charges from BWSL.

         BWSL distributes our water primarily to residential properties, small
hotels, and businesses which serve the tourist market.

DEMAND FOR WATER IN BELIZE

         We have only operated our plant in Belize for about 21 months. However,
we believe that water sales in Belize are cyclical, and on a similar cycle to
sales in the Cayman Islands, since both operations cater to similar tourist
markets. We also believe that water sales will be higher in the future since
sales were limited before March 2000 because the production capacity of the
water plant was lower than demand. While 2001 sales indicate an increasing
trend, it may not be indicative of similarly high percentage increases in the
future because of production limitations in the first quarter of 2000.

         Our sales in Belize were restricted in August, September and October
2001 because of several major component failures at our San Pedro plant. We
believe that we could have sold more water during these months if our plant had
been able to operate at full capacity. We have taken action to ensure this does
not occur again by increasing our inventory of critical spare parts.

         The total volume of water we supplied (in thousands of U.S. gallons) to
BWSL on a quarterly basis for the years ended December 31, 2001 and 2000:

                                          2001                      2000
                                         ------                    ------
                                          (in thousands of U.S. gallons)
First Quarter                            24,589                    17,455*
Second Quarter                           26,519                    20,928*
Third Quarter                            21,404                    19,507
Fourth Quarter                           21,266                    19,624
                                         ------                    ------
Total                                    93,778                    77,514
                                         ======                    ======

* Sales made pre-acquisition by Seatec Belize Ltd. Used only for comparison
  purposes.

OUR OPERATIONS UNDER CONTRACT IN BAHAMAS

         In 2000, we entered into a water supply agreement with South Bimini
International Ltd. and began supplying water under this contract on July 11,
2001. Under our agreement South Bimini International Ltd. is committed to pay
for a minimum of 3,000 US Gallons of water per customer per month (36,000 US
Gallons per year) on a take or pay basis in relation to the Bimini Sands Resort
property in South Bimini Island, Bahamas. The price of water supplied is
adjusted for inflation annually based on Bahamas government indices, and
adjusted monthly for changes in the cost of electricity.



                                       25
<PAGE>

DEMAND FOR WATER IN BAHAMAS

         We have only been supplying water in Bimini for approximately eight
months, to a resort property, which is only partially completed and a small
40-room hotel. Currently the resort is comprised of 54 condominiums, and a
developing 150-slip marina. By the end of 2002, we anticipate that we will be
providing water to an additional 30 condominiums. The resort property is
ultimately expected to include over 300 condominium units, a large hotel casino,
and a marina that can accommodate twice as many boats as the existing facility.
We believe that water sales in Bimini will be cyclical. We expect that our sales
will be higher during the summer months when tourists and fisherman arrive from
the United States by boat, and when several large angling tournaments are
traditionally held in Bimini. We expect that our sales will be lower during
winter months when the weather is not conducive to pleasure boat travel from the
United States.

         The total volume of water we supplied (in thousands of U.S. gallons) to
South Bimini International Ltd. during each of the third and fourth quarters for
the year ended December 31, 2001 was 449 and 551 respectively.

WATER SALES AND OTHER INCOME ("TOTAL INCOME")

         Our total income includes water sales income, other income and interest
income from all of our business segments. Water sales income is comprised of
water sales to our individual Cayman Islands customers, to BWSL and to South
Bimini International Ltd. Other income consists of monthly meter rental charges,
sales to companies that deliver water by truck to customers not connected to our
pipeline in the Cayman Islands, connection charges for new customers and
re-connection charges for delinquent accounts. In April 1999, we settled a
dispute with the owner of the Hyatt Hotel and the developer of the Britannia
development, who supplied water to the Hyatt Hotel, a hotel located within our
Seven Mile Beach license area. Accordingly, other income also consists of
settlement fee payments for the supply of water to the Britannia development by
the Hyatt Hotel, which has its own water production facility. During 2001, we
negotiated the purchase of this water production facility and a separate water
supply agreement with the Hyatt Hotel and Britannia Golf Course. On February 1,
2002 we took possession of this facility and began supplying water under the new
agreement. At this time the settlement agreement ceased and no further revenue
will be collected under this settlement. Additionally, included in other income
is interest income relating to interest derived from excess cash balances placed
on term deposit and interest payable by BWSL due to late payment of invoices.

EXPENSES

         Expenses include cost of water sales ("direct production expenses") and
our indirect, or general and administrative expenses. Direct production expenses
include royalty payments to the Cayman Islands government; electricity and
chemical expenses; payments to OCL relating to operation of the Governor's
Harbour plant; production equipment and facility depreciation costs; equipment
maintenance and expenses and operational staff costs. Indirect, or general and
administrative expenses, consist primarily of salaries and employee benefits for
administrative personnel, office lease payments, legal and professional expenses
and financing costs. There are no income taxes in the Cayman Islands and we are
currently exempt from taxes in Belize. We may be liable for gross revenue tax in
the Bahamas as disclosed in Part I, Item 1, under our discussion of our Bahamas
Operations.



                                       26
<PAGE>


RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

WATER SALES AND OTHER INCOME ("TOTAL INCOME")

         Total Income increased by 14.4% from $10,025,686 to $11,473,706 for the
year ended December 31, 2000 and 2001, respectively. Total Income is comprised
of water sales and other income.

         The Cayman operations increased Total Income by $626,843 for the year
ended December 31, 2001, representing 43.3% of the increase.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased Total Income by $794,401 for the year ended December 31, 2001,
representing 54.9% of the increase.

         Finally, the addition of the Bahamas operations as of July 11, 2001
increased Total Income by $26,776 for the year ended December 31, 2001
representing 1.8% of the increase.

         Sales in Cayman are made within our license area to approximately 3,000
customers. All sales in Belize are to one customer, Belize Water Services Ltd.,
a private company that recently acquired the assets of Belize Water and Sewerage
Authority, which was previously a government statutory corporation. The terms of
our contract have not changed as a result of the privatization of Belize Water
and Sewerage Authority. Currently in the Bahamas, all sales are to one customer,
South Bimini International Ltd. known as Bimini Sands Resort and Marina, which
uses water at their hotel, condominiums and full service marina.

         Total water sales increased by 15.1% from $9,576,959 to $11,026,923 for
the years ended December 31, 2000 and 2001, respectively. The total water sales
increase of $1,449,964 was a result of several factors detailed below.

         Our Cayman operation added $657,784 to water sales for the year ended
December 31, 2001, which is 45.4% of the total increase. Of this increase 70.1%
was due to a 5.1% increase in the number of US gallons sold over the same period
in the prior year. This increase was due to both an increase in our customer
base, as well as, increased usage of 3.5% from commercial, 6.4% increase from
residential, and a 50% increase from government facilities which was due to bulk
sales of $112,409 made to assist the Water-Authority (Cayman) to make up
temporary shortfalls in their production capacity. The automatic inflation
adjustment increased our Cayman Islands water rates in January 2001 for most of
our customers by an average of 2.5%, which makes up the remaining 29.9% of the
increase.

         Our Belize operation added $765,847 to water sales for the year ended
December 31, 2001, which is 52.8% of the total increase. Of this increase 99.3%
was due to a full year of water sales in 2001 compared to six months in 2000.
The quantities of water produced by our Belize operations in 2001 were
approximately 21% higher than in 2000 (pre-acquisition as reported by the
previous owners of the Belize operations). These higher sales during the year
have resulted because in the prior year we had only six months of production and
sales. However, our water sales in Belize were lower than expected because of an
equipment malfunction in late August and September 2001, which temporarily
reduced the production capacity of our water plant by 50% for 3 days. This
malfunction has now been corrected and our plant is operating at full production
capacity. The automatic inflation adjustment increased our Belize water rates in
June 2001 by 0.53%, which makes up the remaining 0.7% of the increase.



                                       27
<PAGE>


         Finally, the addition of the Bahamas operations as of July 11, 2001
increased water sales by $26,333 for the year ended December 31, 2001,
representing 1.8% of the increase.

         In late 2000, the Cayman Islands Government changed the base year of
the Cayman Islands Consumer Price Index ("CI-CPI"), which is used in our license
to calculate our annual automatic inflation adjustment, rendering the then
license formula inoperable. As provided for in our license, our Cayman Islands
rates during the first nine months of 2001 were adjusted by substituting in the
formula the movement of the United States Producers Price Index ("US-PPI") for
Industrial Commodities for the CI-CPI. Our rates during the first nine months of
2001 were inflated by 3.7%. In September 2001 the Government agreed with us a
new automatic inflation adjustment formula, which uses the re-based CI-CPI. This
new formula took effect in October 2001 and reduced our Cayman Islands water
rates by 1.2% for the last three months of the year. The next automatic
inflation adjustment occurred in January 2002 and decreased our Cayman Island
water rates by 0.39%.

         Other income decreased by 0.4% from $448,727 to $446,783 for the year
ended December 31, 2000 and 2001, respectively. This decrease was a result of a
reduction in interest earned from 2000 to 2001, which amounted to $32,314 and
$28,584, respectively. In 2001, interest was earned on our outstanding balance
in our Belize operations, due to the temporary delay in payment by BWSL. In 2000
interest was earned on our significant investment of unutilized cash from the
sale of shares until we purchased our Belize subsidiary.

EXPENSES

         Cost of water sales increased by 12.6% from $5,423,297 to $6,109,117
for the years ended December 31, 2000 and 2001, respectively.

         Our Cayman operations increased cost of water sales by $171,425 for the
year ended December 31, 2001, representing 25.0% of the increase. Although cost
of water sales increased, it increased at a lower rate than our water sales
since we benefit from efficiency savings in our water production operation when
we produce more water.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased cost of water sales by $467,769 for the year ended December 31, 2001
representing 68.2% of the increase. This increase was due to increased water
production to meet increased sales, and machinery repairs related to the August
and September 2001 equipment malfunctions.

         Finally, the addition of the Bahamas operations as of July 11, 2001
increased cost of water sales by $46,626 for the year ended December 21, 2001
representing 6.8% of the increase.

         Gross profit margins increased from 43.4% to 44.6% for the years ended
December 31, 2000 and 2001, respectively.

         Gross profit margins for our Cayman operations increased from 43.2% to
45.3% for the years ended December 31, 2000 and 2001, respectively. The reasons
for this 2.1% increase are increased plant efficiencies, as mentioned earlier,
and decreased depreciation expense of approximately $197,000, which resulted
from our reassessment of the useful economic lives of certain assets. These
lower expenses were offset by the increased full year of amortization expense of
our intangible asset, which arose on purchase of BWSL in July 2000, increased
insurance costs during the last two months of 2001, and additional labour costs
incurred for maintenance of our West Bay plant.



                                       28
<PAGE>


         Gross profit margins for our Belize operations decreased from 46.2% to
41.7% for the years ended December 31, 2000 and 2001, respectively. This
decrease resulted from equipment repair costs, which we incurred during August
and September 2001 as a result of a major equipment malfunction, and higher
electricity costs resulting from the utilization of our 250 Horse Power standby
electric motor on one of our production trains. We were unable to utilize our
diesel engine to power that production train for most of 2001 because of a
mechanical failure of that engine in early 2001, which caused us to order a
replacement engine, as well as, the mechanical malfunctions of other equipment,
which occurred in August and September 2001. We have recently received all the
necessary replacements parts and that production train is now operating on the
more efficient diesel engine.

         Gross profit margin for our Bahamas operations for the year ended
December 31, 2001 was a negative 77.1%. This was due to low water sales and a
relatively higher proportion of fixed costs such as depreciation, which we
expected in the early phases of the Bimini Sands Resort development project.
Both of these are temporary factors and are not expected to continue in the
future. We forecast that the Bahamas operation will generate positive cash flows
during May 2002.

         Indirect expenses increased by 18.3% from $2,197,569 to $2,600,016 for
the years ended December 31, 2000 and 2001, respectively.

         Our Cayman operations increased indirect expenses by $240,830 for the
year ended December 31, 2001, representing 59.9% of the increase. Of this
increase, 49.0% is due to a new executive position, Director of Special
Projects, and 5.6% is a result of increased costs incurred in the first quarter
resulting from the replacement of our former Chief Financial Officer who left us
on April 6, 2001. In addition, we had a 4% increase in salaries, and stock
compensation expense increased by $36,279 because ordinary share options granted
to our executive officers under the terms of their employment agreements, had
market values that were higher than the exercise price on the date of grant,
unlike in 2000.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased indirect expenses by $157,491 for the year ended December 31, 2001,
representing 39.1% of the increase. This was due to the reallocation of employee
duties, which increased indirect expenses when compared to the same periods in
the prior year and the fact that the prior year included only six months of
operations after our acquisition of our Belize subsidiary in July 2000.

         Finally, the addition of the Bahamas operations as of July 11, 2001
increased indirect expenses by $4,126 for the year ended December 31, 2001,
representing 1.0% of the increase. These costs relate to the administration of
the Bahamas operations.

         As a percentage of the Total Income, indirect expenses were at 21.9%
and 22.7% for the year ended December 31, 2000 and 2001, respectively.

NET INCOME

         Net income increased by 15.0% from $2,404,820 to $2,764,573 for the
years ended December 31, 2000 and 2001, respectively. This increase was due to
the several reasons detailed above.



                                       29
<PAGE>


DIVIDENDS

         In December 2000 we increased our per share dividend to ordinary
shareholders from $0.32 to $0.40 per year and in December 2001, we increased our
per share dividend from $0.40 to $0.42 per year, payable on a quarterly basis.
We have consistently paid dividends to ordinary shareholders since we began
issuing dividends in 1985. Our board of directors has established a policy that
we will maintain a dividend pay-out ratio in the range of 50% to 60% of net
income. This policy is subject to modification by our board of directors,
however, we expect to continue increasing our dividend as our earnings grow.

REASSESSMENT OF USEFUL ECONOMIC LIVES OF PROPERTY, PLANT AND EQUIPMENT

       During the year ended December 31, 2001 we carried out an extensive
engineering analysis of our potable water production and distribution equipment
in Grand Cayman. The result of which was the reassessment of the useful economic
lives of various assets and a decrease in depreciation expense on an annual
basis in the amount of $197,472, which increased basic and fully diluted
earnings per share by $0.05 for the year ended December 31, 2001.

       This analysis included the revision of our computerized hydraulic model
of the pipeline system, and updating our water meter replacement schedule. Our
long-term strategic engineering analysis concluded that certain assets,
including portions of the Seven Mile Beach distribution system, the Governor's
Harbour VC Building, and water meters would not need to be replaced or relocated
as early as previously planned.

       As a result of the circumstances detailed below, we considered it
appropriate to reassess the estimated useful economic life of the Seven Mile
Beach distribution system from 20 years to 40 years of which 13 years has
already elapsed, the Governor's Harbour VC building from 20 to 40 years of which
21 years had already elapsed, and water meters from 5 years to 10 years of which
3 years had already elapsed. Also as a result of these circumstances, it was
determined that the projected future utilization of a key piece of equipment
(the Vermeer Trencher), which we use to install or replace pipelines, would be
reduced. It was considered appropriate to reassess the useful economic life of
this piece of equipment from 10 years to 20 years, of which 3 years had already
elapsed.

       Also during the year ended December 31, 2001 we carried out a review of
the condition and technology of our West Bay RO plant and concluded that the
plant was now meeting performance and operational requirements consistent with
those of the Governor's Harbour RO plant. A similar review had been carried out
on the Governor's Harbour RO plant in 1994. As a result of these circumstances,
it was considered appropriate to reassess the estimated useful economic life of
the West Bay RO plant from 10 years to 15 years, of which 3 years had already
elapsed, which is now consistent with depreciation parameters used for the
Governor's Harbour RO plant.

       SEVEN MILE BEACH DISTRIBUTION SYSTEM

         When the Seven Mile Beach ("SMB") distribution pipeline was initially
installed, the West Bay road was at an early stage of development. At the time
of installation, 20 years was considered to be an appropriate best estimate for
the useful life of the system, given the circumstances and relatively early
stage of development in the Cayman Islands. Fundamental changes regarding the
West Bay road that were being considered by Government had not been rejected. We
planned for several years to relocate our Governor's Harbour RO plant to enable
alternate use or sale of the waterfront land, and if undertaken, this relocation
would have involved the removal and relaying of pipeline.



                                       30
<PAGE>


         During 2001, we revised our master distribution plan, which includes
the SMB distribution system, in order to evaluate the possible addition of the
Britannia plant to the system, to determine whether contemplated upgrades to the
Governor's Harbour reservoirs were warranted, and to consider future capital
expenditure for pipeline replacements or new pipelines. It was determined that
certain pipeline replacements, which had been scheduled subsequent to the 1996
master distribution plan were no longer necessary, and that existing SMB
distribution system assets could be utilized for a much longer period than
previously anticipated. The Government also revised their schedule and layout
for significant road improvements within our service areas, which alleviated the
need for any major changes to our SMB distribution system. The West Bay road is
at a mature stage of development, and the level of construction, which has now
peaked, would inhibit any changes to the road layout and our distribution
system. We decided not to relocate our Governor's Harbour reservoirs,
distribution pumps, and RO plant.

         As a result of these events and circumstances, in early 2001, we
considered it appropriate to reassess the remaining useful economic life of the
SMB distribution system and the Governor's Harbour pipeline. Based on our
experience and industry standards, it was concluded that the pipeline, being of
the same material and construction as the remainder of our pipeline, had a
useful economic life of 40 years, of which 13 had already elapsed.

         GOVERNOR'S HARBOUR VAPOR COMPRESSION ("VC") BUILDING

         The VC Building was initially constructed in 1976 to accommodate diesel
engine powered seawater desalination equipment, which we operated. In 1994 the
building was remodeled to house two large high pressure pumps, which are part of
the Ocean Conversion (Cayman) Ltd. ("OCL") seawater RO plant. The building is
comprised of a reinforced concrete foundation, and painted steel prefabricated
wall and roof structures. The foundation included a number of unusual features,
which were necessary because of the specialized equipment and piping in the
plant. We planned for several years to relocate our Governor's Harbour plant to
enable alternate use or sale of the waterfront land, and if undertaken, this
relocation would have involved removing the VC building. We did not believe that
the VC building would continue to be a useful asset after the Governor's Harbour
site was re-located. In 1998, we phased out the last seawater desalination unit,
which was housed in the VC Building. The large high pressure pumps for the OCL
RO plant remained. It was decided at that time that the VC building would be
remodeled to accommodate materials storage, and to improve the appearance of the
structure, and would continue to house the large pumps, which are part of the RO
plant. In 2000 we contracted with a local building contractor to completely
replace the painted steel wall and roof panels of the VC building with more
durable and rust-resistant material called Galv-Alum. The reinforced concrete
foundation was determined to be sound and only required filling of various holes
and trenches left over from the phased-out desalination equipment.

         During 2001, we revised our master distribution plan, which includes
the VC building, in order to evaluate the possible addition of the Britannia
plant to the system, to determine whether contemplated upgrades to the
Governor's Harbour reservoirs were warranted, and to consider future capital
expenditure for pipeline replacements or new pipelines. We had decided not to
relocate our Governor's Harbour reservoirs, distribution pumps, VC building and
RO plant.

         As a result of these events and circumstances, in 2001, we considered
it appropriate to reassess the remaining useful economic life of the VC
building. Based on our experience and industry standards, it was concluded that
the building had a remaining useful economic life of 20 years, of which 1 year
had already elapsed.



                                       31
<PAGE>


         DISTRIBUTION SYSTEM METERS

         Our established policy is to replace customer water meters when they
have been in service for a specified number of years, or have registered a
certain volume of water, in accordance to published manufacturer
recommendations. This policy was implemented in 1988 in order to minimize
un-billed water, which could otherwise pass through a water meter, which was not
functioning properly because of age or fatigue.

         We have for more than 10 years purchased water meters from ABB Kent,
who had guaranteed the proper functionality of their water meters for a period
of five years, or a specified registered volume, depending on the model. We were
advised in writing by ABB Kent that they now guarantee their new and existing
C700 water meters under new parameters, which include an extended functional
life of 6 to 15 years, and extended registered volumes.

         It was deemed appropriate by us, at that time, to reassess the useful
economic life of all C700 water meters, which were presently in service, and to
change the useful economic life of these assets to 10 years, which is at the
midpoint of the manufacturer's guarantee period.

         VERMEER TRENCHER

         We use our Vermeer trencher to construct water distribution pipelines
within our franchise area. For reasons detailed in the section above entitled
"Seven Mile Beach Distribution System", we have over the past two years
significantly reduced the utilization of the Vermeer trencher. In early 2000 we
completed a large extension to our distribution system, the Harquail Bypass, but
have since only carried out minor extensions of our pipelines, within new
developments in the West Bay service area.

         During 2001, the Government revised their schedule and layout for
significant road improvements within our service areas, which alleviated the
need for any major changes to our distribution system. Our franchise area is at
a mature stage of development, and it is not anticipated that any further
significant pipeline construction projects are eminent. We revised our master
distribution plan, which alleviated the need for any significant pipeline
upgrades or new pipelines for the foreseeable future.

         As a result of these events and circumstances, in early 2001, we
considered it appropriate to reassess the remaining useful economic life of the
Vermeer trencher. Based on our experience and projected future utilization of
the asset, it was determined that the asset had a useful economic life of 20
years, of which 3 had already elapsed.



                                       32
<PAGE>


         WEST BAY RO PLANT

         Our first sea water RO plant was manufactured and installed by OCL at
the Governor's Harbour location in 1990. At the time that this plant was
acquired, the technology was state-of-the-art and little operational experience
existed industry wide. This was one of the primary reasons that we
lease-purchased the technology instead of purchasing it outright. We furthermore
had concerns regarding potential accelerated obsolescence of the equipment,
resulting from continued research and development in the RO field. After three
years of operational experience on this OCL plant, we established that the
technology was meeting operational requirements of capacity, quality and
reliability. Other similar RO units had been installed in other locations and
evidence indicated that the technology was reliable. OCL had, in accordance to
the lease-purchase agreement, been maintaining the asset in like-new condition.
Individual components were replaced on schedule or as needed in accordance to
our conservative maintenance program, and these items were expensed as incurred.
Following an expansion in 1994 we considered it appropriate to reconsider the
useful life of the asset at that time, and based on experience, it was
considered that the asset had a 12 year remaining life at that time.

         The second seawater RO plant (the West Bay RO plant) was manufactured
and installed by a different supplier, US Filter Corporation, in 1998. Again at
the time it was a state-of-the-art new technology (from a different supplier)
and we had concerns about potential accelerated obsolescence of the equipment
because of continuing research and development in the RO field. Given that
conditions were similar to those prevalent when the company purchased its first
RO plant from OCL, management contracted to lease-purchase the West Bay RO plant
and have the manufacturer operate the plant on a day-to-day basis. Consistent
with the treatment of the Governor's Harbour plant, we considered it appropriate
to initially depreciate the asset over ten years. The manufacturer, in
accordance with the lease-purchase agreement, maintained the West Bay RO plant
in a like-new condition. Individual components were replaced on schedule or as
needed in accordance to our conservative maintenance program, and these items
were expensed as incurred.

         By 2001, we have had ten years experience operating seawater RO plants.
There has been no change in the technology used in the RO plant, and it has
become evident from operational experience that the plant is reliable and meets
the requirements of its purpose. Mr. Wil Pergande of Osmonics, Inc., is an
expert in the RO field and member of our board of directors, and is well placed
to reach such a conclusion on the current mature state of RO technology. There
are currently no alternatives and no research or development underway which
would indicate any upcoming significant changes in the underlying technology.
There has been progress in membrane technology, however we replace membranes in
both of our RO plants on a regular basis in accordance to set maintenance
schedules.

         As a result of these developments, at the beginning of 2001, we
considered it appropriate to reassess the remaining useful life of the West Bay
RO plant based on our experience. It was considered that the situation and
circumstances of the two RO plants were now consistent and that the asset had a
remaining useful economic life of 12 years.



                                       33
<PAGE>


YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999.

WATER SALES AND OTHER INCOME ("TOTAL INCOME")

         Total Income increased by 22% from $8,249,988 to $10,025,686 for the
years ended December 31, 1999 and 2000, respectively. Total Income is comprised
of water sales and other income.

         The Cayman operations increased Total Income by $1,310,770 for the year
ended December 31, 2000, representing 73.8% of the increase.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased Total Income by $464,928 for the year ended December 31, 2000,
representing 26.2% of the increase.

         Total water sales increased by 20.7% from $7,936,118 to $9,576,959 for
the years ended December 31, 1999 and 2000, respectively.

         Our Cayman operation added $1,175,913 to water sales for the year ended
December 31, 2000, which is 71.7% of the total increase. This increase was due
to an inflationary increase in base rates, as well as, generic growth in our
customer base, due to increased housing and new hotel properties, which came on
line in our Cayman Islands franchise area.

         Our Belize operation added $464,928 to water sales for the year ended
December 31, 2000, which is 28.3% of the total increase.

         Other income increased by 43.0% from $313,870 to $448,727 for the years
ended December 31, 1999 and 2000, respectively. This increase was a result of a
full twelve months of revenue being recorded from the Hyatt Settlement versus
six months in 1999, as well as, more interest being earned during 2000 than in
1999 being $32,314 and $594, respectively. In 2000, interest was earned on our
significant investment of unutilized cash from the sale of shares until we
purchased our Belize subsidiary.

EXPENSES

         Cost of water sales increased by 14% from $4,770,179 to $5,423,297 for
the years ended December 31, 1999 and 2000, respectively.

         Our Cayman operations increased cost of water sales by $402,766 for the
year ended December 31, 2000, representing 61.7% of the increase. This increase
is due to costs of producing additional water to provide for the increased
sales, the additional six months of amortization expense from the purchase of
our Belize subsidiary and an increase in depreciation due to the significant
number of projects that were completed in 2000.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased cost of water sales by $250,352 for the year ended December 31, 2000
representing 38.3% of the increase.

         Gross profit margins increased from 39.9% to 43.4% for the years ended
December 31, 1999 and 2000, respectively.

         Gross profit margins for our Cayman operations increased from 39.9% to
43.2% for the years ended December 31, 1999 and 2000, respectively. These
increases were due to the increased plant efficiencies, as well as, much lower
electricity costs due to the installation of a new energy recovery system in our
West Bay RO plant, which allows us to produce the same water at a much lower
cost.



                                       34
<PAGE>

         Gross profit margins for our Belize operations were 46.2% for the year
ended December 31, 2000.

         Indirect expenses increased by 23% from $1,792,516 to $2,197,569 for
the years ended December 31, 1999 and 2000, respectively.

         Our Cayman operations increased indirect expenses by $371,631 for the
year ended December 31, 2000, representing 91.7% of the increase. This increase
is due to increase employment costs, increased professional fees due to the
change in accounting policy and the voluntary increase of SEC disclosure,
increased financial and investor public relations and increased expenditures
looking for new business.

         The addition of the operations of Belize Water Ltd. as of July 21, 2000
increased indirect expenses by $33,422 for the year ended December 31, 2000,
representing 8.3% of the increase.

         As a percentage of Total Income, indirect expenses remained unchanged
at 22% of total income for the years ended December 31, 1999 and 2000,
respectively.

NET INCOME

         Net income increased by 53.2% from $1,569,717 to $2,404,820 for the
years ended December 31, 1999 and 2000, respectively. This increase was due to
the reasons stated above, in addition to, a 14.1% increase due to a cumulative
effect of a change in account principle noted below.

DIVIDENDS

         In October 1999, we doubled our per share dividend to ordinary
shareholders from $0.16 to $0.32 per year and in December 2000, we increased it
from $0.32 to $0.40 per year, payable on a quarterly basis. We have consistently
increased our dividend to ordinary shareholders since we began issuing dividends
in 1985. As of February 29, 2000, our board of directors has established a
policy that we will maintain a dividend pay-out ratio in the range of 50% to 60%
of net income. This policy is subject to modification by our board of directors,
however, we expect to continue increasing our dividend as our earnings grow.

CHANGE IN ACCOUNTING PRINCIPLE

         Statement of Position 98-5 "Reporting on the Costs of Start-Up
Activities" requires start up costs to be expensed as incurred rather than
deferred. As a result, the cumulative effect of this change was $117,576, and
this item was recorded as a change in accounting principle in the 1999
Consolidated Statements of Income.



                                       35
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

         We generate cash primarily from our operations in the Cayman Islands,
Belize and Bahamas, and at a lesser frequency from the sale of our shares, and
through our loans and facilities obtained from two banks. Cash flow is impacted
by operating and maintenance expenses, the timeliness and adequacy of rate
increases (excluding automatic adjustments to our rates for inflation and
electricity costs), and various factors affecting tourism in the Cayman Islands,
Belize and Bahamas, such as weather conditions and the economy. We use cash to
fund our operations in the Cayman Islands, Belize and Bahamas, fund capital
projects, to make payments under our operating agreement with Ocean Conversion
(Cayman) Ltd., a Cayman Islands company which operates our Governor's Harbour
plant, to expand our infrastructure, to pay dividends, to repay principal on our
loans, to repurchase our shares when appropriate and to take advantage of new
investment opportunities which expand our operations.

OPERATING ACTIVITIES

         Cash from operating activities for the years ended December 31, 2000
and 2001 was $3,922,712 and $4,193,921, respectively. We generated cash by
increasing our net income through greater utilization of our existing plants,
equipment and resources in all three segments of the business, minimization of
water losses and efficiencies created by a strong management team. The loss in
the Bahamas operation for the year ended December 31, 2001 was $23,976. This
investment is long-term and we do not expect to produce a positive cash flow
until the second quarter 2002. Currently we provide water to 54 condominiums,
half of a developing marina and a small existing hotel. By the end of 2002 we
anticipate that we will be providing water to 30 additional condominiums, and
the marina is projected to be doubled in size. The change between 2000 and 1999
was due to increased cash generated from operations due to the acquisition of
our Belize operations.

WORKING CAPITAL

         At December 31, 2001, we had a working capital surplus of $325,996.
This surplus relates to the increase of cash we received from our operating
activities which allowed us to payback our bank overdraft and continue to build
our cash balances. Currently 72.2% of our cash is denominated in Belize dollars.
Through our Belize government guarantees we are in the process of repatriating
United States dollars to the Cayman Islands.

INVESTING ACTIVITIES

         Cash used in investing activities during the years ended December 31,
2000 and 2001 was $6,268,738 and $1,904,237, respectively. Cash was used in
investing activities for expenditures for new property, plant and equipment with
the majority associated with the construction of our new water production and
distribution system in Bimini, Bahamas. The investment in the Bahamas operation
totals $1,085,759 of which $307,395 relates to costs associated with the prior
year. We also continued to expand our water distribution system in the Cayman
Islands by constructing pipelines to service several new developments within our
franchise area. In addition, we purchased 16,600 shares of Belize Water Services
Ltd. for $12,450. This investment has been recorded at cost and represents less
than 1% of the total issued and outstanding share capital of Belize Water
Services Ltd. As these shares are not publicly traded, there is a risk that a
market for resale may not be available. During the similar period in 2000,



                                       36
<PAGE>

investing activities consisted of the purchase of our Belize subsidiary on July
21, 2000, the installation of a new energy recovery system and the expansion of
our water production plant in West Bay, Cayman Islands, and the completion of a
major pipeline extension within our franchise area in the Cayman Islands. In
1999, investing activities consisted primary of purchase of property, plant and
equipment.

FINANCING ACTIVITIES

         Cash generated from financing activities for the year ended December
31, 2000 was $2,574,717, compared to cash used of $2,024,075 for the year ended
December 31, 2001. During 2001, the primary financing activity was the payment
of four interim quarterly dividends totaling $0.40 per share. This was offset by
proceeds from an issuance of ordinary shares of common stock due to a director
exercising certain options and a net increase in our long-term bank debt due to
the draw down of a new credit facility in order to assist with the financing of
the investment in the Bahamas. During the same period during 2000, we had
substantial proceeds from an issuance of common stock due to our share offering,
which was primarily used for the purchase of the Belize subsidiary. These cash
amounts were offset by the payment of four interim quarterly dividends in 2000
totaling $0.34 per share and the repayment of both short-term and long-term debt
including the plant purchase portion of our water supply agreement with OCL. In
1999, a term loan of $1,000,000 was drawn down of which $200,000 was repaid
using excess operating cash flow and we also paid four interim quarterly
dividends totaling $0.20 per share.

         On September 21, 2001, the Company reactivated its stock repurchase
program, which was originally approved by the Board of Directors in October
1998, and may repurchase up to 10% of the outstanding ordinary shares of common
stock in the open market and in private negotiated transactions. Depending upon
market conditions and other factors, purchases under this program may be
commenced or suspended at any time. During the year ended December 31, 2001,
25,000 ordinary shares of common stock were repurchased at an average price of
$10.86. These shares were cancelled in accordance with Cayman Island's law.
During the same period in 2000, we repurchased 79,100 ordinary shares of common
stock at $6.25 per share from a shareholder whose assets were being liquidated.
These shares were also cancelled in accordance with Cayman Island's law. During
the same period in 1999, we repurchased 110,752 at an average price of $7.44 per
share. These shares were also cancelled in accordance with Cayman Island's law.

MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURES

         As at December 31, 2001, we had approximately $1,620,000 committed for
capital expenditures for the purchase of the Hyatt hotel water production
facilities and construction of pipeline to connect the facility to our
distribution network. On February 1, 2002 we used our existing credit facilities
to finance the purchase of the Hyatt RO plant and equipment for $1.5 million. We
also intend to finance our pipeline construction project using existing credit
facilities.

IMPACT OF INFLATION

         Under the terms of our Cayman Islands license, Belize water sales
agreement and Bimini water sales agreement, there is an automatic price
adjustment for inflation on an annual basis, subject to temporary exceptions. We
therefore believe that the impact of inflation on our net income will not be
material.



                                       37
<PAGE>


EXCHANGE RATES

         The official exchange rate for conversion of United States Dollars into
Cayman Islands Dollars, as determined by the Cayman Islands Monetary Authority,
has been fixed since 1974 at U.S. $1.20 per CI$1.00.

         The official exchange rate for conversion of United States Dollars into
Belizean Dollars, as determined by the Central Bank of Belize, has been fixed
since 1976 at U.S.$0.50 per BZE$1.00.

         The official fixed exchange rate for conversion of BAH$ into U.S.$, as
determined by the Central Bank of The Bahamas, has been fixed since 1973 at
U.S.$ 1.00 per BAH$ 1.00.

FORWARD-LOOKING STATEMENTS

         We discuss in this Annual Report and in documents which we have
incorporated into this Annual Report by reference matters which are not
historical facts, but which are "forward-looking statements." We intend these
forward looking statements to qualify for safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, our future plans, objectives,
expectations and events, assumptions and estimates about our company and our
industry in general.

         The forward-looking statements in this Annual Report reflect what we
currently anticipate will happen. What actually happens could differ materially
from what we currently anticipate will happen. We are not promising to make any
public announcement when we think forward looking statements in this Annual
Report are no longer accurate whether as a result of new information, what
actually happens in the future or for any other reason.

         Important matters that may affect what will actually happen include,
but are not limited to, tourism in the Cayman Islands, Belize and Bahamas,
scheduled new construction within our operating areas, the U.S., Cayman Islands,
Belize and Bahamas economies, regulatory matters, weather conditions in the
Cayman Islands, Belize and Bahamas, availability of capital for expansion of our
operations, and other factors described in the "Risk Factors" section below as
well as elsewhere in this Annual Report.

RISK FACTORS

         We have described for you below some risks which may materially and
adversely affect our business, financial condition or results of operations.

         WE RELY ON AN EXCLUSIVE LICENSE IN THE CAYMAN ISLANDS WHICH MAY NOT BE
RENEWED IN THE FUTURE AND UNDER WHICH WE MUST OBTAIN PRIOR APPROVAL FOR AN
INCREASE IN OUR RATES FOR ANY REASON OTHER THAN INFLATION. We presently operate
as a public water utility under an exclusive license originally issued to us in
December 1979 by the government of the Cayman Islands. We own our production
infrastructure and substantially all of our distribution infrastructure.

          Our license expires on July 11, 2010. If we are not in default of any
terms of the license, we have a right of first refusal to renew the license on
terms that are no less favorable than those which the government offers to a
third party. Nevertheless, we cannot assure you that the government will renew
our license or that we will be able to negotiate a new license on satisfactory
terms.



                                       38
<PAGE>


          Under our license, we must obtain prior approval from the Cayman
Islands government to increase our rates for any reason other than inflation.
Our ability to raise our rates is limited by this requirement, including
potential delays and costs involved in obtaining government approval for a rate
increase.

         WE RELY ON WATER SUPPLY AGREEMENTS WITH OUR CUSTOMERS IN BELIZE AND THE
BAHAMAS WHICH MAY OR MAY NOT, UPON THEIR EXPIRATION, BE RENEWED OR RENEGOTIATED.
We presently operate as bulk water suppliers in Belize and the Bahamas under
water sales agreements with our customers BWSL and South Bimini International
Ltd. respectively. We own our production plant in Belize and BWSL has the option
to purchase the plant at the expiration of our agreement, at a price to be
agreed by BWSL and ourselves 6 months prior to expiration of the agreement. We
own our production and distribution plant in the Bahamas which, in the absence
of any new agreement, must be removed from the property of South Bimini
International Ltd. at the expiration of our water supply agreement.

         OUR BUSINESS IS AFFECTED BY TOURISM, WEATHER CONDITIONS, THE ECONOMIES
OF CAYMAN, BELIZE, BAHAMAS AND THE U.S. Tourist arrivals and weather conditions
within our operating areas impact the demand for our water. Normally, the
highest demand is in the first two quarters of each calendar year, which
corresponds with the high tourist season. Lowest demand for water arises in the
third quarter of each calendar year, which corresponds with the period with the
most rainfall and the least tourist arrivals. Approximately 75% of tourists to
the Cayman Islands come from the U.S. In addition, development activity in the
Cayman Islands often decreases during downturns in the U.S. economy, which is
tracked by the Cayman Islands economy. Accordingly, a significant downturn in
tourist arrivals to the Cayman Islands or in the U.S. economy for any reason
would be detrimental to our revenues and operating results. After the events of
September 11, 2001, tourism undoubtedly suffered, but management has observed
that tourist visits has improved dramatically in recent months. We believe that
Cayman Islands long-standing relationships, coupled with the fact it is a close
and safe tourist destination served to lessen the impact.

         WE MAY HAVE DIFFICULTY ACCOMPLISHING OUR GROWTH STRATEGY WITHIN AND
OUTSIDE OF OUR CURRENT OPERATING AREAS. Even though we have an exclusive license
for our present service area in the Cayman Islands, our ability to expand our
service area in the Cayman Islands is limited to the discretion of the Cayman
Islands government.

         Further, part of our long-term growth strategy is to expand our water
supply and distribution operations to locations outside the Cayman Islands, such
as Belize and the Bahamas. Our expansion into new locations depends on our
ability to identify suitable new service territories and to obtain necessary
permits and licenses to operate in these territories.

         Although we believe that we have sufficient capital to satisfy our
capital requirements for expansion in the Cayman Islands, Belize and Bahamas for
the next 12 months, we will need additional financing to further expand our
operations elsewhere. We cannot make any assurances that we will be able to
obtain the additional financing which we may need to expand our operations on
satisfactory terms, if at all.

         Our expansion to territories outside our current operations includes
significant risks, including, but not limited to, the following:

         o  regulatory risks, including government relations difficulties, local
            regulations and currency controls;



                                       39
<PAGE>



         o  risks related to operating in foreign countries, including political
            instability, reliance on local economies, environmental or
            geographical problems, shortages of materials and skilled labor; and

         o  risks related to development of new operations, including assessing
            the demand for water, engineering difficulties and inability to
            begin operations as scheduled.

         If our expansion plans are successful, we may have difficulties in
managing our growth outside our current operations. Expanding our operations to
areas outside the Cayman Islands, Belize and Bahamas will require us to hire and
train new personnel, expand our management information systems and control our
operating expenses. We cannot currently estimate the costs required or give any
assurance that any new operations outside our current operations will attain or
maintain profitability or that the results from these new operations will not
negatively impact our overall profitability.

         OUR OPERATIONS IN THE CARIBBEAN COULD BE HARMED BY HURRICANES. The
Cayman Islands, Belize and Bahamas, like the rest of the Caribbean, are
susceptible to damage from hurricanes. A significant hurricane could cause major
damage to our equipment and properties and the properties of our customers,
including the large tourist properties. This would result in decreased revenues
from water sales until the damaged equipment and properties are repaired and the
tourism industry returned to the status quo.

         WE ARE NOT FULLY INSURED AGAINST HURRICANE DAMAGE. The Cayman Islands
have been directly hit by one hurricane since we began operations in 1973 and
Belize has been directly hit by one hurricane since we began operations on July
21, 2000, and the damage to our properties and equipment was minimal. We do not
insure our underground water distribution system on the Cayman Islands, nor the
Governor's Harbour reservoirs, which are constructed from earthen berms. We are
however, fully insured on all of our other above-ground property that may be
susceptible to loss, including our RO equipment, machinery, other equipment,
buildings and the West Bay and Britannia reservoir tanks. Currently in Belize we
are insured at the estimated replacement value of these assets. In the Cayman
Islands and Bahamas we are insured, by a different provider for the depreciated
value of our above ground assets and we are working to obtain coverage for the
estimated replacement value of these assets as well. We have experienced some
difficulty obtaining full replacement value coverage for our Cayman Islands and
Bahamas assets because of the conditions in the insurance market after the
events of September 11, 2001. We believe that it is highly unlikely, based on
our previous experience with hurricane damage to our operations in Belize, that
our insured equipment would be damaged so severely that it would require full
and complete replacement. We will evaluate our needs and obtain the insurance
coverage that we believe is necessary for any new operations outside our current
operating areas. A severe hurricane which resulted in major damage to our
properties and equipment could have a material adverse affect on our operating
results. Even though we are not fully insured, we have mitigated the risks by
implementing disaster recovery plans and obtaining insurance for loss of revenue
from our Cayman, Belize and Bahamas operations.



                                       40
<PAGE>



         WE COULD BE NEGATIVELY AFFECTED BY POTENTIAL GOVERNMENT ACTIONS AND
REGULATIONS. There is always a possibility that the governments in our service
areas may issue legislation or adopt new regulations:

         o  restricting foreign ownership of our company;

         o  providing for the expropriation of our assets by the government;

         o  providing for nationalization of public utilities by the government;

         o  providing for different water quality standards;

         o  resulting in unilateral changes to or renegotiation of our exclusive
            license or water supply contracts; or

         o  causing currency exchange fluctuations or devaluations or changes in
            tax laws and exchange controls.

         SERVICE OF PROCESS AND ENFORCEMENT OF LEGAL PROCEEDINGS AGAINST US IN
THE UNITED STATES MAY BE DIFFICULT TO OBTAIN. Service of process on our company
and our directors and officers, 9 out of 12 of whom reside outside the United
States, may be difficult to obtain within the United States. Also, since
substantially all of our assets are located outside the United States, any
judgment obtained in the United States against us may not be collectible within
the United States.

         Civil liabilities under the Securities Act of 1933 or the Securities
Exchange Act of 1934 for original actions instituted outside the Cayman Islands
may or may not be enforceable. There is no reciprocal enforcement of foreign
judgments between the United States and the Cayman Islands, so foreign judgments
originating from the United States are not directly enforceable in the Cayman
Islands.

         A prevailing party in a United States proceeding against us or our
officers or directors would have to initiate a new proceeding in the Cayman
Islands using the United States judgment as evidence of the party's claim. Any
action would have to overcome available defenses in the Cayman Islands courts,
including, but not limited to:

         o  lack of competent jurisdiction in the United States courts
            (including competent jurisdiction according to the rules of private
            international law currently in effect in the Cayman Islands);

         o  lack of due service of process in the United States proceeding;

         o  that United States judgments or their enforcement are contrary to
            the law, public policy, natural justice, security or sovereignty of
            the Cayman Islands;

         o  that United States judgments were obtained by fraud or conflict with
            any other valid judgment in the same matter between the same
            parties; and

         o  that proceedings between the same parties in the same matter were
            pending in a Cayman Islands court at the time the lawsuit was
            instituted in the United States court.



                                       41
<PAGE>

         A United States judgment awarding remedies unobtainable in any action
in the courts of the Cayman Islands (for example, treble damages, which would
probably be regarded as penalties), probably would not be enforceable under any
circumstances.

         PROVISIONS IN OUR ARTICLES OF ASSOCIATION, REQUIREMENTS OF GOVERNMENT
APPROVAL AND AN OPTION DEED ADOPTED BY OUR BOARD OF DIRECTORS MAY DISCOURAGE A
CHANGE IN CONTROL OF OUR COMPANY AND MAY MAKE IT MORE DIFFICULT TO SELL OUR
ORDINARY SHARES. An issuance or transfer of a number of shares which (i) exceeds
5% of the issued shares of our company, or (ii) would, upon registration, result
in any shareholder owning more than 5% of the issued shares, requires the prior
approval of the Cayman Islands government.

         It may be difficult for a shareholder to acquire more than 5% of our
shares and be able to influence significantly our board of directors or obtain a
controlling equity interest in our company and change our management and
policies.

         Our articles of association include provisions, which may discourage or
prevent a change in control of our company. For instance, our board of directors
consists of three groups. Each group serves a staggered term of three years
before the directors in the group are scheduled for re-election. Also, the board
of directors may refuse to register any transfer of shares on our books. This
provision of the articles of association ensures that the board of directors is
not legally obligated to register a share transfer which would cause us to be in
breach of the government license in the Cayman Islands as discussed above. Our
board of directors has never refused to approve the registration of the transfer
of shares.

         We have also adopted an option deed, which is similar to a poison pill.
The option deed will discourage a change in control of our company by causing
substantial dilution to a person or group who attempts to acquire our company on
terms not approved by the board of directors.

         As a result of these provisions which discourage or prevent an
unfriendly or unapproved change in control of our company, a shareholder may not
have an opportunity to sell his or her ordinary shares at a higher market price,
which, at least temporarily, typically accompanies attempts to acquire control
of a company through a tender offer, open market purchases or otherwise.

         WE MAY BE IN TECHNICAL BREACH OF THE TERMS OF OUR CAYMAN ISLANDS
LICENSE. As stated above, our Cayman Islands license requires that government
approves in advance any issuance or transfer of ordinary shares which represents
more than 5% of the issued shares, or which would increase the ownership of any
shareholder above 5% of the issued shares of our company.

       More than 5% of our issued and outstanding ordinary shares are and in the
future may be registered in the name of Cede and Co. Cede and Co. is the nominee
for the Depository Trust Company, otherwise know as DTC, which is a clearing
agency for shares held by participating banks and brokers. We do not believe
that these shareholdings by Cede and Co. constitute a breach of the intent of
the license. We believe that the purpose of this clause of the license is to
allow the Government to approve significant shareholders of the company. Cede
and Co. and Depository Trust Company, however, act solely as the nominee for
banks and brokers, and have no beneficial ownership in the ordinary shares of
common stock. Nevertheless, our Cayman Islands' legal counsel has advised us
that these shareholdings by Cede & Co., which were not approved by the
government, may be a technical breach of its license.



                                       42
<PAGE>


         On June 1, 2000, we received a letter from an official of the Cayman
Islands' government stating that a public offering which we completed in 1996
without government approval was a breach of our license. We have responded to
this letter and stated that we do not believe that we are in breach of our
license. A meeting with officials of the Cayman Islands' government, to discuss
this matter, was held on June 16, 2000 in accordance with the Government's
suggestion in the June 1st letter. We have been advised by our Cayman Islands'
counsel that this letter does not constitute a formal "notice of breach" as
contemplated in the license. However, if a court determined that the
Government's approval of these offerings was required under the license, we
would be in breach of the license. Legal Counsel has advised us that in order to
make this determination, a court would have to disagree with our interpretation
of the license and dismiss several defenses that would be available to us. These
defenses include acquiescence and waiver on the part of the Government with
respect to these offerings. In December 2000, and in 2002, we had additional
meetings with Government representatives. At our latest meeting on March 18,
2002, the Government gave us indications that it is considering revisions to our
license, which would clarify the definition of share ownership in order to
favorably resolve the uncertainty regarding the technical breach of our license.
Nevertheless, there can be no assurance that Government will revise our license
in a manner favorable to us.

         THERE MAY BE A RISK OF VARIATION IN CURRENCY EXCHANGE RATES. Although
we report our results in United States dollars, the majority of our revenue is
earned in both Cayman Islands dollars and Belizean dollars. Our Bahamas revenue
is earned in United States dollars. The Cayman Islands dollar is presently fixed
at U.S.$1.20 per CI$1.00, the Belizean dollar is presently fixed at U.S.$0.50
per BZE$1.00 and the Bahamian dollar is presently fixed at U.S. $1.00 per
BAH$1.00. These rates of exchange have been fixed since 1974, 1976 and 1973
respectively. As a result, we do not hedge against any exchange rate risk
associated with our reporting in United States dollars. However, if any of the
fixed exchange rates becomes a floating exchange rate, our results of operations
could be affected.

         SHARES ELIGIBLE FOR FUTURE SALE UNDER RULE 144 OF THE SECURITIES ACT
MAY ADVERSELY AFFECT THE MARKET PRICE OF THE ORDINARY SHARES. As of March 19,
2002, there were 3,920,313 ordinary shares issued and outstanding. With the
exception of ordinary shares held by officers, directors and other affiliates of
our company, all or substantially all of the shares may be immediately sold
without registration under the Securities Act of 1933. These shares may be sold
under Rule 144(k) or under the exemption provided by Section 4(1) of the
Securities Act for transactions by any person other than an issuer, underwriter
or dealer. In addition, the estimated 824,124 ordinary shares held by our
affiliates (as this term is defined in the Securities Act of 1933) are eligible
for resale in compliance with Rule 144 of the Securities Act.

         Generally, Rule 144 permits the sale, within any three-month period, of
shares in an amount which does not exceed the greater of one percent of the
then-outstanding ordinary shares or the average weekly trading volume during the
four calendar weeks before a sale. We can not predict the effect sales made
under Rule 144, or otherwise, may have on the then-prevailing market price of
the ordinary shares. Any substantial sale of the ordinary shares under Rule 144,
or otherwise, may have an adverse effect on the market price of the ordinary
shares.



                                       43
<PAGE>


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         Our primary market risk exposure is in the area of currency exchange
rate fluctuations. Although we report our results in United States dollars, the
majority of our revenue is earned in both Cayman Islands dollars and Belizean
dollars. Our Bahamas operations revenue is earned in United States dollars. The
Cayman Islands dollar is presently fixed at U.S.$1.20 per CI$1.00 and the
Belizean dollar is presently fixed at U.S.$0.50 per BZE$1.00. These rates of
exchange have been fixed since 1974 and 1976, respectively. As a result, we do
not hedge against any exchange rate risk associated with our reporting in United
States dollars. However, if either of the fixed exchange rates becomes a
floating exchange rate, our results of operations could be affected.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


<TABLE>
<CAPTION>

                                 CONSOLIDATED WATER CO. LTD.

                          INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                                         PAGE
                                                                                         ----

<S>                                                                                       <C>
         Report of Independent Accountants..............................................  45

         Consolidated Balance Sheets as at December 31, 2001 and 2000...................  46

         Consolidated Statements of Income for each of the years ended December 31,
            2001, 2000 and 1999.........................................................  47

         Consolidated Statements of Stockholders' Equity for each of the years ended
            December 31, 2001, 2000 and 1999............................................  48

         Consolidated Statements of Cash Flows for each of the years ended
            December 31, 2001, 2000, and 1999...........................................  49

         Notes to Consolidated Financial Statements.....................................  51

</TABLE>

                                       44
<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
CONSOLIDATED WATER CO. LTD.:

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, stockholders' equity and cash flows present
fairly, in all material respects, the financial position of Consolidated Water
Co. Ltd. and its subsidiaries (the "Group") at December 31, 2001 and 2000, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Group's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers

PricewaterhouseCoopers
Grand Cayman, Cayman Islands
March 13, 2002




                                       45
<PAGE>





                          CONSOLIDATED WATER CO. LTD.

                          CONSOLIDATED BALANCE SHEETS
                      (Expressed in United States dollars)


<TABLE>
<CAPTION>

                                                              DECEMBER 31,
                                                      ---------------------------
                                                           2001            2000
                                                      -----------     -----------
<S>                                                       <C>             <C>
ASSETS

CURRENT ASSETS
   Cash and cash equivalents (Note 8)                     516,446         250,837
   Accounts receivable (Note 3)                         1,323,156       1,488,729
   Spares inventory                                       271,134         120,014
   Inventory of water                                      48,377          34,219
   Prepaid expenses and other assets                      319,900         299,499
                                                      -----------     -----------

Total current assets                                    2,479,013       2,193,298

PROPERTY, PLANT AND EQUIPMENT (Notes 4 and 15)         18,414,935      17,643,891
INTANGIBLE ASSET (Note 5)                               1,814,780       2,008,483
INVESTMENT (Note 6)                                        12,450              --
                                                      -----------     -----------

Total assets                                          $22,721,178     $21,845,672
                                                      ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Bank overdrafts (Note 8)                                    --         703,331
   Dividends payable (Note 7)                             499,383         401,965
   Accounts payable and other liabilities               1,087,470       1,067,514
   Stock compensation liability (Note 17)                 210,324         380,850
   Current portion of long term debt (Note 8)             355,840         219,580
                                                      -----------     -----------
Total current liabilities                               2,153,017       2,773,240

LONG TERM DEBT (Note 8)                                 1,213,804       1,131,986
SECURITY DEPOSIT (Note 16)                                 52,763          52,763
ADVANCES IN AID OF CONSTRUCTION                            37,494          41,090
                                                      -----------     -----------
Total liabilities                                       3,457,078       3,999,079
                                                      -----------     -----------

STOCKHOLDERS' EQUITY
   Common stock (Note 9)                                4,704,077       4,635,774
   Additional paid-in capital (Note 9)                  6,896,753       6,726,749
   Vested redeemable preferred stock (Note 9)               2,841          11,983
   Non-vested redeemable preferred stock (Note 9)          27,393          28,378
   Retained earnings                                    7,633,036       6,443,709
                                                      -----------     -----------
Total stockholders' equity                             19,264,100      17,846,593
                                                      -----------     -----------
Total liabilities and stockholders' equity            $22,721,178     $21,845,672
                                                      ===========     ===========

</TABLE>


   The accompanying notes are an integral part of these financial statements.





                                       46
<PAGE>


                           CONSOLIDATED WATER CO. LTD.

                        CONSOLIDATED STATEMENTS OF INCOME
                      (Expressed in United States dollars)
<TABLE>
<CAPTION>

                                                                  FOR THE YEAR ENDED DECEMBER 31,
                                                          ------------------------------------------------
                                                                2001              2000              1999
                                                          ------------      ------------      ------------
<S>                                                         <C>                <C>               <C>
Water sales (Note 16)                                       11,026,923         9,576,959         7,936,118
Cost of water sales (Note 10)                               (6,109,117)       (5,423,297)       (4,770,179)
                                                          ------------      ------------      ------------
Gross profit                                                 4,917,806         4,153,662         3,165,939
                                                          ------------      ------------      ------------
Indirect expenses (Note 10)                                 (2,600,016)       (2,197,569)       (1,792,516)
                                                          ------------      ------------      ------------
Income from operations                                       2,317,790         1,956,093         1,373,423
                                                          ------------      ------------      ------------

Other income:
   Interest income                                              28,584            32,314               594
   Other income                                                418,199           416,413           313,276
                                                          ------------      ------------      ------------
                                                               446,783           448,727           313,870
                                                          ------------      ------------      ------------

Income before accounting change                              2,764,573         2,404,820         1,687,293

Cumulative effect of a change in accounting principle               --                --          (117,576)
                                                          ------------      ------------      ------------
Net income                                                $  2,764,573      $  2,404,820      $  1,569,717
                                                          ============      ============      ============

BASIC EARNINGS PER SHARE (Note 11)
Income before accounting change                                   0.71              0.68              0.55
Accounting changes                                                  --                --             (0.04)
                                                          ------------      ------------      ------------
Net income                                                        0.71      $       0.68      $       0.51
                                                          ============      ============      ============

DILUTED EARNINGS PER SHARE (Note 11)
Income before accounting change                                   0.69              0.67              0.53
Accounting changes                                                  --                --             (0.04)
                                                          ------------      ------------      ------------
Net income                                                $       0.69      $       0.67      $       0.49
                                                          ============      ============      ============

Weighted average number of common shares used
   in the determination of:
   Basic earnings per share (Note 11)                        3,897,969         3,532,501         3,044,293
                                                          ============      ============      ============
   Diluted earnings per share (Note 11)                      3,999,691         3,616,271         3,188,048
                                                          ============      ============      ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       47
<PAGE>


                           CONSOLIDATED WATER CO. LTD.

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
        FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2001
                      (Expressed in United States dollars)

<TABLE>
<CAPTION>

                                                                                                    VESTED
                                                                                                 REDEEMABLE
                                                  COMMON        ADDITIONAL         SHARES         PREFERRED
                                                   STOCK      PAID-IN CAPITAL    REPURCHASED        STOCK
                                                 ----------   ---------------    -----------    -----------

<S>                                              <C>             <C>             <C>                 <C>
Balance at December 31, 1998                     3,657,866       2,912,646              --           8,486

Issue of share capital  (Note 9)                   127,494         488,387              --          (7,365)
Repurchase of shares (Note 9)                           --              --        (758,928)             --
Cancellation of shares repurchased (Note 9)       (123,302)       (635,626)        758,928              --
Net income for the year                                 --              --              --              --
Dividends                                               --              --              --              --
                                              ------------    ------------    ------------    ------------

Balance at December 31, 1999                     3,662,058       2,765,407              --           1,121

Issue of share capital (net of issue
  costs) (Note 9)                                1,068,636       4,360,797              --          10,862
Repurchase of shares (Note 9)                           --              --        (494,375)             --
Cancellation of shares repurchased (Note 9)        (94,920)       (399,455)        494,375              --
Net income for the year                                 --              --              --              --
Dividends                                               --              --              --              --
                                              ------------    ------------    ------------    ------------

Balance at December 31, 2000                     4,635,774       6,726,749              --          11,983

Issue of share capital  (Note 9)                    98,303         411,599              --          (9,142)
Repurchase of shares (Note 9)                           --              --        (271,595)             --
Cancellation of shares repurchased (Note 9)        (30,000)       (241,595)        271,595              --
Net income for the year                                 --              --              --              --
Dividends                                               --              --              --              --
                                              ------------    ------------    ------------    ------------

Balance at December 31, 2001                  $  4,704,077    $  6,896,753    $         --    $      2,841
                                              ============    ============    ============    ============

</TABLE>


<TABLE>
<CAPTION>

                                                 NON-VESTED
                                                REDEEMABLE                        TOTAL
                                                 PREFERRED        RETAINED    STOCKHOLDERS'
                                                   STOCK          EARNINGS       EQUITY
                                               -----------        --------   ------------

<S>                                                 <C>          <C>            <C>
Balance at December 31, 1998                        44,200       4,370,193      10,993,391

Issue of share capital  (Note 9)                     3,949              --         612,465
Repurchase of shares (Note 9)                           --              --        (758,928)
Cancellation of shares repurchased (Note 9)             --              --              --
Net income for the year                                 --       1,569,717       1,569,717
Dividends                                               --        (638,346)       (638,346)
                                              ------------    ------------    ------------

Balance at December 31, 1999                        48,149       5,301,564      11,778,299

Issue of share capital (net of issue
  costs) (Note 9)                                  (19,771)             --       5,420,524
Repurchase of shares (Note 9)                           --              --        (494,375)
Cancellation of shares repurchased (Note 9)             --              --              --
Net income for the year                                 --       2,404,820       2,404,820
Dividends                                               --      (1,262,675)     (1,262,675)
                                              ------------    ------------    ------------

Balance at December 31, 2000                        28,378       6,443,709      17,846,593

Issue of share capital  (Note 9)                      (985)             --         499,775
Repurchase of shares (Note 9)                           --              --        (271,595)
Cancellation of shares repurchased (Note 9)             --              --              --
Net income for the year                                 --       2,764,573       2,764,573
Dividends                                               --      (1,575,246)     (1,575,246)
                                              ------------    ------------    ------------

Balance at December 31, 2001                  $     27,393    $  7,633,036    $ 19,264,100
                                              ============    ============    ============

</TABLE>



   The accompanying notes are an integral part of these financial statements.



                                       48
<PAGE>






                           CONSOLIDATED WATER CO. LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Expressed in United States dollars)

<TABLE>
<CAPTION>

                                                                      FOR THE YEAR ENDED DECEMBER 31,
                                                              --------------------------------------------------
                                                                   2001               2000               1999
                                                              ------------       ------------       ------------
<S>                                                             <C>                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Cash receipts from customers                                 11,607,099          9,919,966          7,841,289
   Cash paid to suppliers and employees                         (7,344,692)        (5,876,811)        (5,127,240)
                                                              ------------       ------------       ------------
   Cash generated from operations                                4,262,407          4,043,155          2,714,049
   Interest received                                                28,584             32,314                594
   Interest paid                                                   (97,070)          (152,757)          (185,722)
                                                              ------------       ------------       ------------
Net cash provided by operating activities                        4,193,921          3,922,712          2,528,921
                                                              ------------       ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of subsidiary, net of cash acquired (Note 5)                --         (3,966,979)                --
   Purchase of property, plant and equipment                    (1,892,147)        (2,301,759)        (1,543,368)
   Purchase of investment                                          (12,450)                --                 --
   Proceeds from sale of property, plant and equipment                 360                 --              1,920
                                                              ------------       ------------       ------------
Net cash used in investing activities                           (1,904,237)        (6,268,738)        (1,541,448)
                                                              ------------       ------------       ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from issuance of
   ordinary shares of common stock and preference stock            210,601          5,368,945            146,060
   Repurchase of ordinary shares of common stock                  (271,595)          (494,375)          (758,928)
   Draw down of credit facility                                    500,000                 --                 --
   Increase (decrease) in bank overdraft                          (703,331)            32,938            591,359
   Repayment of principal on long term debt                       (281,922)          (885,355)          (533,353)
   Principal payments under Water Purchase Agreement                    --           (320,141)          (344,304)
   Dividends paid                                               (1,477,828)        (1,127,295)          (505,193)
                                                              ------------       ------------       ------------
Net cash provided by (used in) financing activities             (2,024,075)         2,574,717         (1,404,359)
                                                              ------------       ------------       ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               265,609            228,691           (416,886)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                     250,837             22,146            439,032
                                                              ------------       ------------       ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR                      $    516,446       $    250,837       $     22,146
                                                              ============       ============       ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                       49
<PAGE>


                           CONSOLIDATED WATER CO. LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                      (Expressed in United States dollars)

<TABLE>
<CAPTION>

                                                                       FOR THE YEAR ENDED DECEMBER 31,
                                                                 -----------------------------------------------
                                                                     2001              2000              1999
                                                                 -----------       -----------       -----------
<S>                                                                <C>               <C>               <C>
RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES
TO NET INCOME FROM OPERATIONS:
   Net income                                                      2,764,573         2,404,820         1,569,717

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
FROM OPERATING ACTIVITIES
   Depreciation (Notes 4 and 10)                                   1,113,041         1,071,455           816,960
   Loss (gain) on sale of fixed assets                                 7,702                --            (1,920)
   Amortization of intangible asset (Note 5)                         193,703            64,979                --
   Share issue costs deferred                                             --                --            89,145
   Stock compensation (Note 22)                                      289,174            51,579           377,260
   Cumulative effect of a change in accounting principle                  --                --           117,576

CHANGE IN ASSETS AND LIABILITIES
   Decrease (increase) in spares inventory                          (151,120)           25,278           (25,662)
   Decrease (increase) in inventory of water                         (14,158)           (5,235)            1,677
   Decrease (increase) in accounts receivable                        165,573           (56,259)         (401,926)
   Decrease (increase) in prepaid expenses and other assets          (20,401)            1,647          (111,213)
   Increase  in accounts payable and other liabilities                19,956           320,183           203,471
   Increase (decrease) in stock compensation liability              (170,526)           48,259          (101,664)
   Decrease in advances in aid of construction                        (3,596)           (3,994)           (4,500)
                                                                 -----------       -----------       -----------
NET CASH FROM OPERATING ACTIVITIES                               $ 4,193,921       $ 3,922,712       $ 2,528,921
                                                                 ===========       ===========       ===========

</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       50
<PAGE>


                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   PRINCIPAL ACTIVITY AND STATUS

Consolidated Water Co. Ltd. (the "Company") and its wholly-owned subsidiaries
(together the "Group") use reverse osmosis technology to produce fresh water
from seawater. The Group processes and supplies water to its customers in Grand
Cayman, Cayman Islands, Ambergris Caye, Belize, and South Bimini, Bahamas. The
Company's exclusive license in Grand Cayman allows it to process and supply
water to certain areas of Grand Cayman for a period of twenty years from July
11, 1990 in addition to having a right of first refusal on the extension or
renewal thereof. The Group has a contract with Belize Water Services Ltd. (
"BWSL") of Belize, formally known as Water and Sewerage Authority of Belize, to
supply water to BWSL in Ambergris Caye expiring in 2011. At the expiry of the
contract, BWSL may at its option extend the term of the agreement or purchase
the plant outright. In addition, on July 11, 2001 the Company commenced
supplying water under a ten year agreement to South Bimini International Ltd., a
Bahamian company, which owns and operates resort properties on South Bimini
Island, Bahamas. The base price of water supplied by the Group, and adjustments
thereto, are generally determined by the terms of the license and contracts,
which provide for adjustments based upon the movement in the government price
indices specified in the license and contracts respectively as well as monthly
adjustments for changes in the cost of energy.

2.   ACCOUNTING POLICIES

BASIS OF PREPARATION: As a result of a management decision the Group has
voluntarily adopted accounting principles generally accepted in the United
States of America ("US-GAAP") effective January 1, 2000. Previously, annual
financial statements were prepared in accordance with International Accounting
Standards ("IAS"). As a result all prior periods' financial statements presented
in these financial statements have been prepared in accordance with "US-GAAP".
The following income statement captions contain certain items, the accounting
for which has changed as a result of the change from IAS to US-GAAP:

INCOME STATEMENT: Indirect expenses include: i) recognition of stock option
compensation expenses and ii) start up costs expensed following the change in
accounting policy to effect the application of Statement of Position 98-5
"Reporting on the Costs of Start Up Activities."

USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The Group's significant accounting policies are:

BASIS OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company's wholly-owned subsidiaries Belize Water Limited,
Commonwealth Water Limited, Hurricane Hide-A-Way Ltd., and Cayman Water Company
Limited. The operating results of Belize Water Limited have been included in the
financial statements since the date of the acquisition (July 21, 2000). All
inter-company balances and transactions have been eliminated. There are no
operating results for Commonwealth Water Limited, Hurricane Hide-A-Way Ltd. and
Cayman Water Company Limited as these companies have been dormant since
inception and have no assets and liabilities.



                                       51
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   ACCOUNTING POLICIES (CONTINUED)

REPORTING CURRENCY: The functional currency of the Company and its foreign
subsidiaries are their respective local currencies. The consolidated operations
are reported using United States dollars. It is the intention of the Company to
declare and pay dividends in United States dollars.

The exchange rate between the Cayman Islands dollar and the United States dollar
has been fixed during all periods presented at CI$1.00 to US$1.20. The exchange
rate between the Belize Dollar and the United States dollar has been fixed
during all periods presented at BZE$1.00 to US$0.50. The exchange rate between
the Bahamian Dollar and the United States dollar has been fixed during all
periods presented at BAH$1.00 to US$1.00. Accordingly, no foreign currency gain
or losses arise on the translation of the foreign operations due to the fixed
exchange rate.

FOREIGN CURRENCY: Monetary assets and liabilities denominated in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date. Foreign currency transactions are translated at the rate ruling on the
date of the transaction. Net exchange gains of $2,477 (2000: $3,812; 1999:
$36,512) are included in other income.

CASH AND CASH EQUIVALENTS: Cash and cash equivalents comprise cash at bank on
call and highly liquid deposits with an original maturity of three months or
less.

SPARES INVENTORY: Spares inventory, which consists primarily of replacement
spares and parts, are valued at the lower of cost and net realizable value on a
first-in, first-out basis.

INVENTORY OF WATER: Inventory of water represents the cost of desalinated
potable water produced or purchased by the Company and held in the Company's
reservoirs at year end. The value of the inventory of water is based on the
lower of average cost of producing and purchasing water during the year and the
volume of water on hand at year end or net realizable value.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated at cost
less accumulated depreciation. Depreciation is calculated using a straight line
method with allowance being made for estimated residual values. Rates are
determined based on the estimated useful lives of the assets as follows:

Buildings                                      5 to 40 years
Plant and equipment                            5 to 15 years
Distribution system                            3 to 40 years
Office furniture, fixtures and equipment       3 to 10 years
Vehicles                                       3 to 10 years
Leasehold improvements                         Shorter of 5 years and
                                               operating lease term outstanding
Lab Equipment                                  3 to 10 years

Additions to property, plant and equipment comprise of the cost of the
contracted services, direct labour and materials. Assets under construction are
recorded as additions for the year upon completion of the projects. Depreciation
commences in the month of completion and transfer from assets under construction
into the other categories of Property, plant and equipment.



                                       52
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2. ACCOUNTING POLICIES (CONTINUED)

INTANGIBLE ASSET: The intangible asset consists of the contract acquired on the
acquisition of Belize Water Limited (Note 5) on July 21, 2000 and is being
amortised on a straight line basis over the remaining period of the license,
which expires in April 2011.

INVESTMENT: Investments are recorded at cost less provision for impairment, if
any.

OBLIGATIONS UNDER WATER PURCHASE AGREEMENT: The Company assumed substantially
all the benefits and risks of the plant and equipment under the Water Purchase
Agreement (Note 15). The assets have been capitalized at the amount specified in
the agreement.

ADVANCES IN AID OF CONSTRUCTION: The Company recognizes a liability in respect
of advances in aid of construction when such advances are received from certain
condominium developers in the licensed area to help defray the capital
expenditure costs of the Company. These advances do not represent a loan to the
Company and are interest free. However, the Company allows a discount of 10% on
future supplies of water to these developments until the aggregate discounts
allowed are equivalent to advances received. Such discounts are charged against
advances received.

SHARES REPURCHASED: Under Cayman Island law, shares repurchased out of capital
by the Company are treated as cancelled upon redemption, and the Company's
issued share capital is reduced by the par value of those shares, with the
difference being adjusted to additional paid up capital.

STOCK AND STOCK OPTION INCENTIVE PLANS: The Company issues stock under incentive
plans that form part of employees and non-executive Directors' remuneration, and
grants options to purchase ordinary shares as part of remuneration for certain
long-serving employees and the executive Officers.

The Company has elected to account for stock-based employee compensation plans
in accordance with Accounting Principles Board Opinion (APB) No. 25, "Accounting
for Stock Issued to Employees," as permitted by SFAS 123, "Accounting for
Stock-Based Compensation." In accordance with APB No. 25, compensation expense
is not recognized for stock options that have no intrinsic value on the date of
grant. Compensation expense is recognized immediately for restricted stock for
which future service is not required as a condition to the delivery of the
underlying shares of common stock. For restricted stock with future service
requirements, compensation expense is recognized over the relevant vesting
period. Stock compensation expenses are recorded within employee costs.

The liability for unexercised stock option compensation expense is recorded as
other liabilities. On exercise of options, proceeds up to the par value of the
stock issued are credited to ordinary share capital, any proceeds in excess of
the par value of the stock issued are credited to additional paid in capital in
the period in which the options are exercised.

WATER SALES AND COST OF WATER SALES: The Group bills customers monthly for water
delivered based on meter readings performed at or near each month end, and in
accordance with various agreements which stipulate minimum monthly charges for
water service. An accrual, where necessary, is made for water delivered but
unbilled at year end where readings are not performed at the year end date. This
accrual is matched with the associated direct costs of producing and purchasing
water.

OTHER INCOME: Foreign exchange gains, water meter and fire hydrant rental and
recurring income from a dispute settlement agreement with Cayman Hotel and Golf
Inc. are recorded as other income.

REPAIRS AND MAINTENANCE: All repair and maintenance costs are expensed as
incurred.



                                       53
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3. ACCOUNTS RECEIVABLE

Accounts receivable comprise receivables from customers and are shown net of an
allowance for doubtful accounts of $12,000 (2000: $12,000). Significant
concentrations of credit risk are disclosed in Note 21.

4. PROPERTY, PLANT AND EQUIPMENT

Certain fixed assets are pledged as collateral for certain obligations of the
Company, as more fully described in Note 8.

<TABLE>
<CAPTION>

                                                                                  DISPOSALS/
                                                                                TRANSFERS FROM
                                                DECEMBER 31,                     ASSETS UNDER     DECEMBER 31,
                                                    2000        ADDITIONS        CONSTRUCTION         2001
                                                 -----------    ---------        --------------  -------------
<S>                                          <C>              <C>               <C>               <C>
COST

Land                                              475,679               --                --           475,679
Buildings                                       2,115,025           32,392                --         2,147,417
Plant and equipment                             8,812,711          719,028                --         9,531,739
Distribution                                   11,386,877        1,449,668                --        12,836,545
Office furniture, fixtures and equipment          636,514           38,936                --           675,450
Vehicles                                          698,176           76,199           (23,484)          750,891
Leasehold improvements                             26,032           13,448                --            39,480
Lab equipment                                      34,324            3,585                --            37,909
Assets under construction                         701,251        1,557,154        (1,973,499)          284,906
                                             ------------     ------------      ------------      ------------
                                             $ 24,886,589     $  3,890,410      $ (1,996,983)     $ 26,780,016
                                             ============     ============      ============      ============
</TABLE>

<TABLE>
<CAPTION>

                                             DECEMBER 31,      CHARGE FOR                         DECEMBER 31,
                                                2000           THE YEAR          DISPOSALS           2001
                                             ------------     ------------      ------------      ------------
<S>                                               <C>               <C>         <C>                  <C>
ACCUMULATED DEPRECIATION
Buildings                                         610,177           66,542                --           676,719
Plant and equipment                             3,097,203          630,798                --         3,728,001
Distribution                                    2,837,004          268,189                --         3,105,193
Office furniture, fixtures and equipment          311,213           90,996                --           402,209
Vehicles                                          337,135           73,464           (15,422)          395,177
Leasehold improvements                             20,100            6,152                --            26,252
Lab equipment                                      29,866            1,664                --            31,530
                                             ------------     ------------      ------------      ------------
                                             $  7,242,698     $  1,137,805      $    (15,422)     $  8,365,081
                                             ============     ============      ============      ============
Net book value                               $ 17,643,891                                         $ 18,414,935
                                             ============                                         ============

</TABLE>

                                       54
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


4.   PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Included in plant and equipment is the reverse osmosis water production plant,
which has been acquired under the Water Purchase Agreement (see Note 15).
Included within additions for the year are transfers of completed projects from
assets under construction comprising of buildings $7,420, plant and equipment
$616,651 and distribution $1,349,428.

During the year the Company capitalized $24,764 (2000: $33,682; 1999: $35,749)
of depreciation charges in relation to plant and equipment specifically
purchased to continue further development of the distribution system.

At December 31, 2001, the Group had outstanding capital commitments of
$1,620,000 (2000: $570,000). It is Company policy to maintain adequate insurance
for loss or damage to all fixed assets that in management's assessment may be
susceptible to loss. The Company does not insure its underground distribution
system which totals $9,471,931 (2000: $8,791,350) and assets insured by third
parties under agreement that have a total cost of $3,633,997 (2000: $3,550,897)
(Note 15).

During the year ended December 31, 2001 the Company carried out an extensive
engineering analysis of its potable water production and distribution equipment
in Grand Cayman, which included the revision of the Company's computerized
hydraulic model of the pipeline system, and updating of the Company's water
meter replacement schedule. The Company's engineering analysis concluded that
certain assets, including portions of the Seven Mile Beach Distribution System,
the Governor's Harbour VC Building, and water meters would not need to be
replaced or relocated as early as previously planned. Furthermore extensive
renovation of the Governor's Harbour VC Building was completed in 2000. As a
result of these circumstances, management considered it appropriate to reassess
the estimated useful economic life of the Seven Mile Beach distribution system
from 20 years to 40 years of which 13 years has already elapsed, the Governor's
Harbour VC building from 20 to 40 years of which 21 years had already elapsed,
and water meters from 5 years to 10 years of which 3 years had already elapsed.
Also as a result of these circumstances, it was determined that the projected
future utilization of a key piece of equipment, which the Company uses to
install or replace pipelines, would be reduced. It was considered appropriate by
management to reassess the useful economic life of this piece of equipment from
10 years to 20 years, of which 3 years had already elapsed.

Also during the year ended December 31, 2001 the Company carried out a review of
the condition and technology of its West Bay RO Plant and concluded that the
plant was now meeting performance and operational requirements consistent with
those of the Governor's Harbour RO Plant. A similar review had been carried out
on the Governor's Harbour RO Plant in 1994. As a result of these circumstances,
it was considered appropriate by management to reassess the estimated useful
economic life of the West Bay RO Plant from 10 years to 15 years, of which 3
years had already elapsed, which is now consistent with depreciation parameters
used for the Governor's Harbour RO Plant.

The reassessment of the useful economic lives of these assets resulted in
decreased depreciation expense on an annual basis in the amount of $197,472,
which increased basic and fully diluted earnings per share by $0.05 for the year
ended December 31, 2001.



                                       55
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


5. INTANGIBLE ASSET

On July 21, 2000, the Company acquired all of the issued and outstanding capital
stock of Seatec Belize Ltd., a company organized under the laws of Belize, for a
total purchase price, less cash and cash equivalents acquired, of $3,966,979. Of
this amount, $2,073,462 has been attributed to intangible assets and represents
the value of the water purveyor contract (the "contract") that the acquired
company has with Belize Water Services Limited. Seatec Belize Ltd., now renamed
Belize Water Limited, owns and operates a reverse osmosis plant in Ambergris
Caye, Belize. This acquisition has been accounted for by the purchase method and
the intangible asset is being amortised on a straight line basis over the
remaining period of the contract, which expires in April 2011.

                                                     DECEMBER 31,
                                             -----------------------------
                                                 2001             2000
                                             -----------      -----------

Intangible asset - contract                    2,073,462        2,073,462
Accumulated amortisation                        (258,682)         (64,979)
                                             -----------      -----------

Net book value                               $ 1,814,780      $ 2,008,483
                                             ===========      ===========



6. INVESTMENT

                                                     DECEMBER 31,
                                             -----------------------------
                                                 2001             2000
                                             -----------      -----------

Investment in Belize Water Services Ltd.          12,450               --
                                             -----------      -----------

Total investment                             $    12,450      $        --
                                             ===========      ===========


The investment in Belize Water Services Ltd. represents less than a 1% holding
of total issued and outstanding shares of Belize Water Services Ltd.




                                       56
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


7. DIVIDENDS PAID / PAYABLE

Quarterly interim dividends per share were declared in respect of both classes
of shareholders on record as follows:

Dividend per share:         2001         2000         1999
                            ----         ----         ----

March 31                $   0.10     $   0.08     $   0.04
June 30                 $   0.10     $   0.08     $   0.04
September 30            $   0.10     $   0.08     $   0.04
December 31             $   0.10     $   0.10     $   0.08

Interim dividends for the first three quarters were paid during each respective
year. The interim dividend for the fourth quarter was declared by the Board of
Directors in October of each respective year. These quarterly interim dividends
are subject to no further ratification and consequently the fourth quarter
interim dividends have been recorded as a liability in each respective year.
Included in dividends payable at December 31, 2001 are unclaimed dividends of
$100,160 (2000: $10,051).

8. BANK BALANCES AND LOANS

                                       DECEMBER 31,
                              ---------------------------
                                   2001            2000
                              ----------      -----------

Cash and cash equivalents     $   516,446     $   250,837
                              ===========     ===========

Cash and cash equivalents are not restricted as to withdrawal or use. At
December 31, 2001, the equivalent of $372,688 (2000: $10,414) is denominated in
Belize dollars. The Group has a guarantee from the Government of Belize to
repatriate any and all of the Belize Water Ltd. earnings in United States
dollars to any foreign destination.

Bank overdrafts - Royal Bank of Canada     $        --     $  703,331
                                           ===========     ==========

European Investment Bank:
   Long term debt                          $ 1,132,144     $1,351,566
                                           ===========     ==========

Royal Bank of Canada:
   Long term debt                          $   437,500     $       --
                                           ===========     ==========

As at December 31, 2001, the total lending facility made available by the Royal
Bank of Canada comprised of a) a revolving line of credit with a limit of
$1,000,000, bearing interest at New York Prime plus 1%, which is convertible in
$100,000 increments into a monthly revolving LIBOR note, bearing interest at
LIBOR plus 1.5%, and b) term loans with a limit of $3,500,000, bearing interest
at LIBOR plus 1.5%. Any amounts drawn down under the line of credit and any term
loans are collateralised by a fixed and floating charge ("the first charge") of
$2,500,000 (to be increased to maximum of $4,500,000). The fixed charge covers
land owned by the Company and the floating charge covers all other assets of the
Company, except those assets charged in connection with the Water Purchase
Agreement (see Note 15). Of this facility, a bank overdraft of $nil (2000:
$703,331) and a term loan of $437,500 (2000: $nil) was outstanding at December
31, 2001.



                                       57
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


8. BANK BALANCES AND LOANS (CONTINUED)

During 1991, in order to fund an extension to the water distribution system, the
European Investment Bank, Luxembourg (the "bank"), agreed to loan the US$
equivalent of 2 million European Currency Units (approximately US$2.5 million at
that time). The loan is guaranteed by the Overseas Development Administration
("ODA") of the Foreign and Commonwealth Office of the Government of the United
Kingdom and is repayable in 24 semi annual installments, which commenced on
December 20, 1994. The interest rate for the entire term is fixed at the bank's
prevailing lending rate, less a subsidy of 4% per annum, at the date each
tranche is drawn down.

The rates of interest applicable to, and the amounts of each tranche at the
current year end exchange rates are:
<TABLE>
<CAPTION>

                                DATE OF                                             INTEREST
                               DRAWDOWN                                               RATE
                               --------                                            ---------
<S>                              <C>                         <C>                        <C>
Tranche 1                  April 11, 1991                    $   322,814                4.25%
Tranche 2                  September 8, 1992                   1,018,895                3.15%
Tranche 3                  February 12, 1992                     847,727                3.45%
Tranche 4                  March 17, 1993                        362,736                3.00%
                                                              ----------
                                                               2,552,172

Capital repayments to December 31, 2001                       (1,420,028)
                                                              ----------

Total debt obligation as at December 31, 2001                $ 1,132,144
                                                              ==========

</TABLE>

Of the final tranche, at December 31, 2001 the equivalent of $50,437 (2000:
$60,034) is repayable in pounds sterling, all other obligations under this loan
are repayable in United States dollars.

The Government of the Cayman Islands has, for a fee of 1% per annum, provided a
counter guarantee to the ODA. The Company, with the approval of the Royal Bank
of Canada, the holder of the first charge, has agreed to secure the counter
guarantee by a second charge over all assets of the Company.

                                                     2001
                                                  ----------

CURRENT PORTION OF LONG TERM DEBT OBLIGATION:

Royal Bank of Canada                                 125,000
European Investment Bank                             230,840
                                                  ----------
                                                  $  355,840
                                                  ==========

LONG TERM DEBT OBLIGATION:

Royal Bank of Canada                                 312,500
European Investment Bank                             901,304
                                                  ----------
                                                  $1,213,804
                                                  ==========

THE AGGREGATE CAPITAL REPAYMENT OBLIGATIONS FOR THE NEXT FIVE YEARS ARE AS
FOLLOWS:

2002                                             355,840
2003                                             362,300
2004                                             369,000
2005                                             313,800
2006                                             168,704
                                              ----------
                                              $1,569,644
                                              ==========



                                       58
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9. SHARE CAPITAL AND ADDITIONAL PAID IN CAPITAL
<TABLE>
<CAPTION>

                                                             2001              2000              1999
                                                        ------------      ------------      ------------
<S>                                                     <C>               <C>               <C>
CAPITAL STOCK AUTHORIZED:
9,900,000 ordinary shares of common
stock CI$1.00 each                                        11,880,000        11,880,000        11,880,000
100,000 redeemable preferred
stock of CI$1.00 each                                        120,000           120,000           120,000
                                                        ------------      ------------      ------------
                                                        $ 12,000,000      $ 12,000,000      $ 12,000,000
                                                        ============      ============      ============

ORDINARY SHARES OF COMMON STOCK
OF CI$1.00 EACH ISSUED AND FULLY PAID:
Balance of ordinary shares at beginning of year
3,863,144 (2000: 3,154,467; 1999: 3,048,222)               4,635,774         3,662,058         3,657,866
Ordinary shares issued under public
offering nil (2000: 773,000; 1999: nil)                           --           927,600                --
Cancellation of repurchased shares 25,000
(2000: 79,100; 1999: 102,752)                                (30,000)          (94,920)         (123,302)
Cancellation of ordinary shares 200
(2000: nil; 1999: nil)                                          (240)               --                --
Ordinary shares issued on exercise of
options 60,000 (2000: nil; 1999: 89,010)                      72,000                --           106,812
Ordinary shares issued on exercise of
warrants nil (2000: 100,000; 1999: nil)                           --           120,000                --
Ordinary shares issued under Directors' Share
Plan 7,860 (2000: 6,890; 1999: 2,400)                          9,431             8,269             2,880
Ordinary shares issued on redemption of
preferred stock 14,260 (2000: 10,639; 1999: 14,835)           17,112            12,767            17,802
                                                        ------------      ------------      ------------
Balance of ordinary shares at end of year
3,920,064 (2000: 3,863,144; 1999: 3,154,467)            $  4,704,077      $  4,635,774      $  3,662,058
                                                        ============      ============      ============

SHARES REPURCHASED:
Balance of shares repurchased at beginning of
year nil (2000: nil; 1999: nil)                                   --                --                --
Shares acquired at cost 25,000 (2000: 79,100;
1999: 102,752)                                              (271,595)         (494,375)         (758,928)
Repurchased shares cancelled during the
year 25,000 (2000: 79,100; 1999: 102,752)                    271,595           494,375           758,928
                                                        ------------      ------------      ------------
Balance of shares repurchased at end of
year nil (2000: nil; 1999: nil)                         $         --      $         --      $         --
                                                        ============      ============      ============

</TABLE>

                                       59
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9. SHARE CAPITAL AND ADDITIONAL PAID IN CAPITAL (CONTINUED)
<TABLE>
<CAPTION>

                                                              2001             2000             1999
                                                           -----------      -----------      -----------
<S>                                                          <C>              <C>              <C>
ADDITIONAL PAID IN CAPITAL:

Balance at beginning of year                                 6,726,749        2,765,407        2,912,646
Additional paid in capital from ordinary shares
of common stock issued under public offering                        --        4,825,800               --
Share issue costs arising on ordinary shares of
common stock issued under public offering                           --         (790,669)              --
Reduction in additional paid in capital from
cancellation of shares repurchased                            (241,595)        (399,455)        (635,626)
Additional paid in capital from ordinary
shares of common stock issued under
Directors' Share Plan (see Note 17)                             47,567           40,815           11,970
Additional paid in capital from exercise of
stock options (see Note 17)                                    305,420               --          466,401
Additional paid in capital from exercise of
warrants (see Note 17)                                              --          280,000               --
Additional paid in capital on preferred stock
issued under employee share plan (see Note 17)                  58,612            4,851           10,016
                                                           -----------      -----------      -----------
Balance at end of year                                     $ 6,896,753      $ 6,726,749      $ 2,765,407
                                                           ===========      ===========      ===========

VESTED REDEEMABLE PREFERRED STOCK OF CI$1.00
EACH ISSUED AND FULLY PAID (NOTE 17):
Balance of vested redeemable preferred stock at
beginning of year 9,986 (2000: 934; 1999: 7,072)                11,983            1,121            8,486
Preferred stock vested during the year 5,358
(2000: 11,400; 1999: 7,036)                                      6,430           13,680            8,444
Vested preferred stock redeemed and issued as
ordinary shares 12,977 (2000: 2,348; 1999: 13,174)             (15,572)          (2,818)         (15,809)
                                                           -----------      -----------      -----------
Balance of vested redeemable preferred stock at
end of year 2,367 (2000: 9,986; 1999: 934)                 $     2,841      $    11,983      $     1,121
                                                           ===========      ===========      ===========

NON-VESTED REDEEMABLE PREFERRED STOCK OF
CI$1.00 EACH ISSUED AND FULLY PAID (NOTE 17):
Balance of non-vested redeemable preferred stock at
beginning of year 23,648 (2000: 40,124;  1999: 36,833)          28,378           48,149           44,200
Preferred stock vested during the year 5,358
(2000: 11,400; 1999: 7,036)                                     (6,430)         (13,680)          (8,444)
Non-vested preferred stock issued 5,821
(2000: 3,415; 1999: 11,988)                                      6,985            4,098           14,386
Non-vested preferred stock redeemed  nil
(2000: 200; 1999: nil)                                              --             (240)              --
Non-vested preferred stock redeemed and issued as
Ordinary shares 1,283 (2000: 8,291; 1999: 1,661)                (1,540)          (9,949)          (1,993)
                                                           -----------      -----------      -----------
Balance of non-vested redeemable preferred stock
at end of year 22,828 (2000: 23,648; 1999: 40,124)         $    27,393      $    28,378      $    48,149
                                                           ===========      ===========      ===========

</TABLE>



                                       60
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9. SHARE CAPITAL AND ADDITIONAL PAID IN CAPITAL (CONTINUED)

The redeemable preferred stock are issued under the Company's Employee Share
Incentive Plan (Note 17) and carry the same voting and dividend rights as
ordinary shares. The redeemable preferred stock is only redeemable with the
Company's agreement. In consideration for redeemed vested preferred stock,
ordinary share capital is issued on a share for share basis. Upon liquidation of
the Company, the redeemable preferred stock rank in preference to the common
stock to the extent of the par value of the redeemable preferred stock and any
related additional paid in capital.

Outstanding non-vested preferred stock currently redeemable are as follows:
<TABLE>
<CAPTION>

                                                             NO. OF SHARES         REDEMPTION          REDEMPTION
                                                              REDEEMABLE              PRICE               VALUE
                                                              ----------          ------------       -------------
<S>                                                             <C>               <C>                    <C>
Up to the year ended December 31, 2002                          17,881                  --                     --
                                                                   872             $5.3175                  4,637
                                                                 1,081             $5.7120                  6,175
                                                                 1,136             $5.4720                  6,216
                                                                 1,858             $5.3238                  9,892
                                                               -------                                    -------
                                                                22,828                                    $26,920
                                                               =======                                    =======

Up to the year ended December 31, 2003                          12,791                  --                     --
                                                                 1,081             $5.7120                  6,175
                                                                 1,136             $5.4720                  6,216
                                                                 1,858             $5.3238                  9,892
                                                               -------                                    -------
                                                                16,866                                    $22,283
                                                               =======                                    =======

Up to the year ended December 31, 2004                           6,087                  --                     --
                                                                 1,136             $5.4720                  6,216
                                                                 1,858             $5.3238                  9,892
                                                               -------                                    -------
                                                                 9,081                                    $16,108
                                                               =======                                    =======

Up to the year ended December 31, 2005                           3,963                  --                     --
                                                                 1,858             $5.3238                  9,892
                                                               -------                                    -------
                                                                 5,821                                    $ 9,892
                                                               =======                                    =======
</TABLE>


                                       61
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


9.   SHARE CAPITAL AND ADDITIONAL PAID IN CAPITAL (CONTINUED)

In April 1996 the Company filed a Form F-1 registration statement with the SEC
in connection with the issue of 575,000 ordinary shares of common stock at $5.25
per share. Under the terms of the related underwriting agreement, the
underwriter was issued a warrant to purchase 50,000 ordinary shares of common
stock at $6.30 per share. Consideration of $500 was paid for the warrant which
management considered to approximate fair value. The warrants were exercisable
during the four year period commencing April 3, 1997 and expired on April 3,
2001. During the year ended December 31, 2001, no warrants were exercised under
this agreement.

In conjunction with the private placement of ordinary shares of common stock
that took place in August 1995, the Company issued warrants to purchase 100,000
ordinary shares of common stock at a price of $4.00 per share. The warrants were
exercised in January and February 2000.

Under the provisions of the Land Holding Companies Share Transfer Tax Law of the
Cayman Islands, tax is payable on the transfer of shares in the Company. Prior
to becoming quoted on Nasdaq, the Company paid this tax on private share
transfers. The Company has never paid tax on transfers of its publicly traded
shares. Management believes that the likelihood that Government will seek to
collect this tax on transfers of the Company's publicly traded shares is remote.
Management, therefore, has not provided for a share transfer tax liability in
these financial statements.

In August 1997 the Company established a Class `B' stock option plan designed to
deter coercive takeover tactics. Pursuant to this plan, holders of ordinary
shares of common stock and redeemable preferred stock were granted options which
entitle them to purchase 1/100 of a share of Class `B' stock at an exercise
price of $37.50 if a person or group acquires or commences a tender offer for
20% or more of the Company's ordinary shares of common stock. Option holders
(other than the acquiring person or group) will also be entitled to buy, for the
$37.50 exercise price, ordinary shares of the Company's common stock with a then
market value of $75.00 in the event a person or group actually acquires 20% or
more of the Company's ordinary shares of common stock. Options may be redeemed
at $0.01 under certain circumstances. 30,000 of the Company's authorized but
unissued ordinary shares have been reserved for issue as Class `B' stock. The
Class `B' stock rank pari passu with the ordinary shares of common stock for
dividend and voting rights. As at December 31, 2001, no Class `B' stock options
have been exercised or redeemed.

The Company purchased treasury shares of 8,000, 102,752, and 79,100 in 1998,
1999 and 2000 respectively. The Company paid $62,375, $758,928 and $494,375 in
1998, 1999 and 2000, respectively to acquire these shares. Under the Cayman
Island's Companies Law, treasury shares purchased are to be treated as cancelled
on purchase. Accordingly, the Company has reclassified the purchase of these
treasury shares in the Consolidated Balance Sheet and the Consolidated Statement
of Shareholders' Equity as cancelled on purchase for the fiscal years ended
December 31, 1998, 1999 and 2000.



                                       62
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.  EXPENSES

<TABLE>
<CAPTION>

                                                                  YEAR ENDED DECEMBER 31,
                                                           ----------------------------------------
                                                               2001           2000           1999
                                                           ----------     ----------     ----------

<S>                                                         <C>            <C>            <C>
COST OF WATER SALES COMPRISE THE FOLLOWING:
Water purchases                                             2,074,759      2,062,582      1,775,494
Depreciation                                                1,018,541        992,410        760,901
Amortisation of intangible asset (Note 5)                     193,703         64,979             --
Employee costs                                                939,976        741,789        601,678
Fuel oil                                                       91,842         81,102             --
Royalties (Note 19)                                           694,351        641,428        560,441
Water Purchase Agreement obligation interest (Note 15)             --         16,910         58,042
Electricity                                                   534,919        316,135        450,451
Insurance                                                      89,808         64,160         56,308
Other direct costs                                            471,218        441,802        506,864
                                                           ----------     ----------     ----------
                                                           $6,109,117     $5,423,297     $4,770,179
                                                           ==========     ==========     ==========

INDIRECT EXPENSES COMPRISE THE FOLLOWING:
Employee costs                                              1,299,877      1,045,244        907,695
Interest                                                       99,956        135,847        127,680
Depreciation                                                   94,500         56,059         79,045
Professional fees                                             280,297        275,589        131,366
Insurance                                                      89,328         34,829         41,083
Directors' fees and expenses                                  107,184        104,149         99,760
Other indirect costs                                          628,874        522,866        428,873
                                                           ----------     ----------     ----------
                                                           $2,600,016     $2,197,569     $1,792,516
                                                           ==========     ==========     ==========
</TABLE>


Direct expenses relate to the production and distribution of water, indirect
expenses represent the administrative costs of the Company.



                                       63
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


11.  EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit attributable
to stockholders by the weighted average number of ordinary shares of common
stock in issue during the year.

The net income and weighted average number of ordinary shares of common stock
and potential ordinary shares figures used in the determination of the basic and
diluted earnings per ordinary share of common stock are summarized as follows:
<TABLE>
<CAPTION>

                                                           2001             2000             1999
                                                       -----------      -----------      -----------
<S>                                                    <C>              <C>              <C>
Net income used in determination of diluted
earnings per ordinary share of common stock            $ 2,764,573      $ 2,404,820      $ 1,569,717

Less:
Dividends paid on non-vested
redeemable preferred stock                                  (9,131)          (8,040)          (8,025)

Earnings attributable to vested
redeemable preferred stock                                  (1,663)          (6,180)            (461)
                                                       -----------      -----------      -----------

Net income available to holders of ordinary shares
of common stock in the determination of basic
earnings per ordinary share of common stock            $ 2,753,779      $ 2,390,600      $ 1,561,231
                                                       ===========      ===========      ===========

Weighted average number of ordinary shares
 of common stock in the determination of basic
 earnings per ordinary share of common stock             3,897,969        3,532,501        3,044,293

Plus:
Weighted average number of redeemable
 preferred stock outstanding during the year                31,213           37,145           44,707

Potential dilutive effect of unexercised options            70,509           41,147           48,954

Potential dilutive effect of unexercised warrants               --            5,478           50,094
                                                       -----------      -----------      -----------
Weighted average number of shares
used for determining diluted earnings
per ordinary share of common stock                       3,999,691        3,616,271        3,188,048
                                                       ===========      ===========      ===========

</TABLE>

As detailed in Note 17, 30,000 options were granted to an investment company on
December 15, 1998 with an exercise price of $7.88. In addition, 85,259 options
were granted to executive directors and senior management of the Company on
December 31, 2000 with an exercise price of $7.10. At December 31, 2000, these
options were antidilutive for the purpose of determining diluted earnings per
share. However, as at December 31, 2001 these options were no longer
antidilutive and were included in the determination of diluted earnings per
share.



                                       64
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12.  SEGMENTED INFORMATION

On July 21, 2000, the Company acquired a 100% stake in Belize Water Limited
(Note 5 and 16) that has been consolidated in these financial statements. In
addition, on December 18, 2000, the Company entered into an agreement with South
Bimini International Ltd., a Bahamian company, to provide water to property in
South Bimini Island, Bahamas (Note 17) and began operations on July 11, 2001.

Under FAS 131 "Disclosure about Segments of an Enterprise and Related
Information" the supply of water to Belize and Bahamas are considered by
management as separate business segments. The basis of measurement of segment
information is similar to that adopted for the financial statements.

AS AT DECEMBER 31 AND FOR THE YEAR THEN ENDED
<TABLE>
<CAPTION>

                         CAYMAN ISLANDS              BELIZE                   BAHAMAS                    TOTAL
                     -----------------------   ----------------------    --------------------    -----------------------
                        2001         2000         2001         2000         2001       2000         2001         2000
                     ----------   ----------   ----------   ----------   ----------    -------   ----------   ----------
<S>                   <C>          <C>          <C>            <C>           <C>       <C>       <C>           <C>
Water sales           9,769,815    9,112,031    1,230,775      464,928       26,333         --   11,026,923    9,576,959
Other income            417,786      448,727       28,554           --          443         --      446,783      448,727
Cost of water         5,344,370    5,172,945      718,121      250,352       46,626         --    6,109,117    5,423,297
sales
Indirect expenses     2,404,977    2,164,147      190,913       33,422        4,126         --    2,600,016    2,197,569
Cost of water
sales and
indirect expenses
include:
   Interest              99,865      152,757           91           --           --         --       99,956      152,757
   Depreciation         932,029    1,009,420      160,825       62,035       20,187         --    1,113,041    1,071,455
Net income  (loss)    2,438,254    2,223,666      350,295      181,154      (23,976)        --    2,764,573    2,404,820
Property Plant
and Equipment        15,770,560   15,735,330    1,541,795    1,601,166    1,102,580    307,395   18,414,935   17,643,891

</TABLE>

13.  RELATED PARTY TRANSACTIONS

A company, owned by a Director, provided professional services during the year
ended December 31, 2001 for which it charged $4,523 (2000: $13,369). This
company was also reimbursed for communication charges made by the Director on
behalf of the Company in the amount of $1,355 (2000: $nil).

The Company sells water to a company in which a Director has a significant
interest. During 2001 sales totaling $9,735 (2000: $5,647; 1999: $11,621) were
made to that company. Accounts receivable for such sales at year end total $934
(2000: $411; 1999: $286).



                                       65
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


14.  COMMITMENTS AND CONTINGENCIES

COMMITMENTS

The Company has committed to lease premises in the Cayman Islands for a period
of one year from February 1, 2002 to January 31, 2003 at approximately $79,000
per annum, with the right to extend the term of this lease for two further terms
of one year each ending on January 31, 2005.

The Company is subject to an ongoing obligation to supply water to new customers
in the Cayman Islands within the areas in which it is licensed to operate and
where the supply of such water is considered commercially feasible.

The Company is subject to a commitment in the Cayman Islands under the Water
Purchase Agreement (Note 15).

The Group is subject to a commitment to supply certain minimum quantities of
water under the terms of various customer supply agreements (Note 16).

The Company has entered into an agreement with Cayman Hotel and Golf Inc., a
Canadian company, to purchase a seawater desalination plant, potable water
storage tank and water distribution pumps, which supply water to a large hotel
and golf course in West Bay Beach, Grand Cayman, Cayman Islands (Note 25). As a
condition of this equipment purchase agreement, the Company has committed to an
operating lease for $1 per year from Cayman Hotel and Golf Inc, for a term of 25
years, subject to renewal of Cayman Island water supply license, to lease a
building and approximately 0.78 acres of land on which the water plant is
situated, and to supply potable water to the Hyatt Hotel and Britannia Golf
Course (Note 16). Upon commencement of supply the existing dispute settlement
agreement with Cayman Hotel and Golf Inc., described in Note 2, will be
extinguished.

CONTINGENCIES

The license that the Company has with the government of the Cayman Islands (the
"Government") requires it to obtain approval from the Government for an issuance
or transfer of shares which (a) exceeds 5% of the issued shares of our company,
or (b) would, upon registration, result in any shareholder holding more than 5%
of the issued share capital of the Company.

More than 5% of the ordinary shares of common stock are registered in the name
of Cede and Co., the nominee for the Depository Trust Company, which is a
clearing agency for shares held by participating banks and brokers. The Company
does not believe that these shareholdings by Cede and Co. constitute a breach of
the intent of the license. The Company believes that the purpose of this clause
of the license is to allow the Government to approve significant shareholders of
the Company. Cede and Co. and Depository Trust Company, however, act solely as
the nominee for banks and brokers, and have no beneficial ownership in the
ordinary shares of common stock. Nevertheless, the Company's Cayman Islands
legal counsel ("Legal Counsel") has advised it that the shareholdings by Cede &
Co. may be a technical breach of the Company's license.

In August and September 1994 and in September 1995, the Company completed
private placements of an aggregate of 500,000 ordinary shares of common stock
and warrants to purchase an additional 100,000 ordinary shares of common stock.
In April 1996 and May 2000, the Company completed public offerings of 515,000
and 773,000 ordinary shares, respectively. Based upon the advice of Legal
Counsel, the Company determined that the license did not require the
Government's approval to complete these offerings. However, if a court
determined that the Government's approval of these offerings was required under
the license, the Company would be in breach of the license. Legal Counsel has
advised the Company that in order to make this determination, a court would have
to disagree with the Company's interpretation of the license and dismiss several
defenses that would be available to the Company. These defenses include
acquiescence and waiver on the part of the Government with respect to these
offerings.



                                       66
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


14.  COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company received a letter dated June 1, 2000, from an official in the
Government, stating that the Company's April 1996 public offering of the
ordinary shares of common stock was a breach of the license. The letter is not
clear as to whether the Government views the public offering completed in 2000
as a breach of our license. The Company has advised the Government that it does
not believe that it is in breach of the license. The Company has been advised by
Legal Counsel that the June 1st letter from the Government does not constitute a
"notice of breach of the license" as contemplated in the license. In June 2000,
December 2000, and January 2002 the Company met with representatives of the
Government to discuss this matter. Other than providing the Company with it's
June 1, 2000 letter the Government has not taken any other action in connection
with the Company's license to date.

15.  WATER PURCHASE AGREEMENT

The Company is party to a water purchase agreement (the "Water Purchase
Agreement") with Ocean Conversion (Cayman) Limited ("OCL"), which expires on
December 31, 2004. The Water Purchase Agreement effectively transferred the
possession of a reverse osmosis ("RO") plant to the Company in 2001, although
the operation and maintenance of the plant will be the responsibility of OCL
until the termination of the agreement on December 31, 2004. On January 1, 2005
responsibility for the operation and maintenance of the plant will be assumed by
the Company. Under the terms of the agreement, the Company must purchase a fixed
minimum amount of water annually with a portion of the monthly payments to be
applied toward the purchase of the plant. Implicit in the agreement are
financing charges relating to the purchase of the plant, based on the Company's
cost of capital at the inception of the agreement. With the purchase of the
equipment in 2000 financing charges for 2001 are $nil.

As at December 31, 2001 minimum future payments are as follows:

   2002                                                  1,350,704
   2003                                                  1,350,704
   2004                                                  1,350,704
                                                       -----------

Total minimum payments                                  $4,052,112
                                                       ===========

The RO plant acquired under the Water Purchase Agreement is included in plant
and equipment in Note 4 at a gross amount of $3,633,997 (2000: $3,550,897) and
at December 31, 2001 had a net book value of $1,250,890 (2000: $1,336,126).
Amortization of this plant is included in the depreciation charge for each of
the three years ended December 31, 2001. During the year ended December 31, 2000
the Company fulfilled the equipment purchase obligation as calculated under the
Water Purchase Agreement. Accounts payable includes $192,340 (2000: $204,076)
outstanding under the Water Purchase Agreement.



                                       67
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


16. CUSTOMER SUPPLY AGREEMENTS

During 1993 the Company entered into a five year agreement to supply non-potable
water to Safe Haven Limited, the developers of a golf course in the Cayman
Islands. On November 1, 1997 this agreement was renegotiated and renewed for a
further five year period. Under the terms of the renewed supply agreement, the
Company must supply a minimum of 4 million US Gallons per month (48 million US
Gallons per year). The price of the water supplied is adjusted annually based on
Government Price Indices. Water sales for the year ended December 31, 2001
resulting from the supply agreement amounted to $374,965 (2000: $571,969; 1999:
$444,098). At December 31, 2001 the Company holds a non-interest bearing
security deposit of $52,763 (2000: $52,763) under the terms of the supply
agreement.

From October 15, 1995 the Company entered into a ten year agreement to supply a
minimum of 30,000 US Gallons per day (10.95 million US Gallons per year) of
potable water to Galleon Beach Resort Limited, the operator of the Westin Hotel
in the Cayman Islands, which initially opened in December 1995. The price of the
water supplied is adjusted annually based on Government Price Indices, and water
supplied in excess of the monthly maximum of 60,000 US Gallons per day is
invoiced at the Company's standard tariff rate. Water sales for the year ended
December 31, 2001 resulting from this agreement amounted to $298,160 (2000:
$299,333; 1999: $314,884).

From the acquisition date of Belize Water Ltd. in 2000, the Company is under
contract to supply a minimum of 135,000 US Gallons per day (49.27 million US
Gallons per year) to BWSL of Belize. The price of water supplied is adjusted
annually based on Government indices. Water sales for the year ended December
31, 2001 resulting from this agreement amounted to $1,230,775 (2000: $464,928)
(Note 12).

During the year ended December 31, 2000 the Company entered into a Water Supply
Agreement with South Bimini International Ltd., a company incorporated in the
Commonwealth of Bahamas. Under the agreement South Bimini International Ltd. is
committed to pay for a minimum of 3,000 US Gallons of water per customer per
month (36,000 US Gallons per year) on a take or pay basis in relation to the
Bimini Sands Resort property in South Bimini Island, Bahamas. The price of water
supplied is adjusted annually based on Government indices. On July 11, 2001 the
Company began to supply water under the agreement and water sales for the period
ended December 31, 2001 resulting from this agreement amounted to $26,333 (Note
12).

On December 10, 2001 the Company entered into a twenty-five year agreement to
supply a minimum of 170,000 US gallons of potable water per day to Cayman Hotel
and Golf Inc., the owners of the Hyatt Grand Cayman Resort and Britannia Golf
Course in Grand Cayman. The price of the water supplied is adjusted annually
based on Government Price Indices, and water supplied in excess of the monthly
minimum of 170,000 US Gallons per day is invoiced at the Company's standard
tariff rate. Water sales for the year ended December 31, 2001 resulting from
this agreement amounted to $nil (Notes 14 and 25).

There are no other individually significant supply agreements.

17. STOCK COMPENSATION

The Company operates various stock compensation plans (described below) that
form part of employee's remuneration. Stock compensation expenses of $169,599
are recorded in accordance with APB 25 and included within employee costs (2000:
$124,772; 1999: $245,117).



                                       68
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17. STOCK COMPENSATION (CONTINUED)

EMPLOYEE SHARE INCENTIVE PLAN (PREFERRED STOCK)

The Company awards redeemable preferred stock (restricted stock) for $nil
consideration under the Employee Share Incentive Plan as part of compensation
for eligible employee services (excluding Directors and Executive Officers) that
require future services as a condition to the delivery of the underlying shares
of common stock. In addition options are granted to purchase preferred stock at
a fixed price, determined annually, which will typically represent a discount to
the market value of the underlying shares of common stock. In consideration for
redeemed vested preferred stock, the Company issues ordinary shares of common
stock on a share for share basis. Under the plan the conversion is conditional
on the grantee's satisfying requirements outlined in the award agreements. The
redeemable preferred stock is only redeemable with the Company's agreement. See
Note 9 for the vesting schedule of outstanding preferred stock currently
redeemable. The details of preferred stock and stock options granted and
exercised under the Employee Share Incentive Plan is as follows:

<TABLE>
<CAPTION>

                                                        YEAR OF                STRIKE     OPTIONS      OPTIONS
                                                         GRANT     GRANTED      PRICE    EXERCISED      EXPIRED
                                                         -----     -------      -----    ---------      -------
<S>                                                       <C>      <C>         <C>       <C>           <C>
       Preferred stock granted                            1999     9,768        $nil        N/A          N/A
                                                          2000     2,279        $nil        N/A          N/A
                                                          2001     3,963        $nil        N/A          N/A

       Preferred stock options granted                    1999     9,768       $5.71      2,220        7,548
                                                          2000     2,279       $5.47      1,136        1,143
                                                          2001     3,963       $5.32      1,858        2,105

</TABLE>

Each employee's option to purchase preferred stock must be exercised within 40
days of the annual general meeting of the Company following the date of grant.

EMPLOYEE SHARE OPTION PLAN (ORDINARY STOCK OPTIONS)

In 2001, the Company introduced an employee stock option plan for certain
long-serving employees of the Company. Under the plan these employees are
granted in each calendar year, as long as the employee is a participant in the
Employee Share Incentive Plan, options to purchase ordinary shares of common
stock. The price at which the option may be exercised will be the closing market
price on the grant date, which is 40 days after the date of the Company's annual
shareholder meeting. The number of options each employee is granted is equal to
five times the sum of (i) the number of Redeemable Preferred Stock which that
employee receives for $nil consideration and (ii) the number of Redeemable
Preferred Stock option which that employee exercises in that given year. The
option may be exercised during the period commencing on the fourth anniversary
of the grant date and ending on the thirtieth day after the fourth anniversary
of the grant date.

NON-EXECUTIVE DIRECTORS' SHARE PLAN

In 1999, the Company introduced a stock grant plan, which forms part of
Directors' remuneration. Under the plan Directors receive a combination of cash
and ordinary shares of common stock in consideration of remuneration for their
participation in Board meetings. All Directors are eligible except Executive
Officers (who are covered by individual employment contracts) and the Government
elected board member. Ordinary shares of common stock granted is calculated with
reference to a strike price that is set by the Board of Directors on October 1
of the year preceding the grant. Stock granted on September 30, 2001 totaled
7,860 (2000: 6,890). The strike price set on October 1, 2001 was $10.70 (October
1, 2000 $7.25).



                                       69
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17. STOCK COMPENSATION (CONTINUED)

DIRECTORS AND SENIOR MANAGEMENT STOCK COMPENSATION

The Chairman and Chief Executive Officer ("CEO"), the President, Chief Operating
Officer ("COO") and Chief Financial Officer ("CFO"), the Vice President -
Operations, and Director of Special Projects are entitled to receive, as part of
the compensation for their services to the Company, options to purchase ordinary
shares of common stock. One other director was granted options as remuneration
for services rendered to the Company. Details of the options granted to and
exercised by these directors and senior management are included in the table
below. In addition, another member of senior management is entitled to receive,
as part of compensation for services to the Group, ordinary shares of common
stock of the Company. As at December 31, 2001 an amount of 3,172 shares (2000:
1,092) was due to this employee.

NON-EMPLOYEE

As part of an agreement for market representation, the Company issued options to
purchase common stock to an investment company for $nil consideration. These
options have an expiry date of one year commencing on the termination of the
agreement, which management intends to formally terminate on April 3, 2002. The
fair value of these options was determined by management to be $30,000, based on
the fair value of the services to be received. Stock compensation expenses
arising on these options were included within other indirect costs.

SUMMARY OF OPTION PLANS:
<TABLE>
<CAPTION>

                                           OPTIONS       STRIKE                    OPTIONS       DATE
       GRANT DATE                          GRANTED        PRICE      EXPIRY DATE  EXERCISED    EXERCISED
       ----------                          -------        -----      -----------  ---------    ---------
<S>                                            <C>         <C>         <C>            <C>        <C>
       CHAIRMAN AND CEO:
       December 31, 1999                     7,786       US$2.50       20-Mar-03          --            --
       December 31, 2000                    26,924       US$7.10       15-Mar-04          --            --
       December 31, 2001                    28,507      US$10.84       10-Mar-05          --            --

       PRESIDENT, COO AND CFO:
       December 31, 2000                     5,609       US$7.10       15-Mar-04          --            --
       December 31, 2001                    28,533      US$10.84       10-Mar-05          --            --

       VICE PRESIDENT - OPERATIONS:
       December 31, 2000                    20,193       US$7.10       15-Mar-04          --            --
       December 31, 2001                    20,800      US$10.84       10-Mar-05          --            --

       DIRECTOR OF SPECIAL PROJECTS:
       December 31, 1997                    20,000       US$2.50       24-Feb-01      20,000     23-Feb-01
       December 31, 1998                    20,000       US$2.50       01-Mar-02      20,000    17-July-01
       December 31, 1999                    20,000       US$2.50       20-Mar-03      20,000    17-July-01
       December 31, 2000                     5,609       US$7.10       15-Mar-04          --            --
       December 31, 2001                    27,646      US$10.84       10-Mar-05          --            --

</TABLE>

                                       70
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17.  STOCK COMPENSATION (CONTINUED)

<TABLE>
<CAPTION>

                                           OPTIONS     STRIKE                      OPTIONS       DATE
       GRANT DATE                          GRANTED      PRICE        EXPIRY DATE  EXERCISED    EXERCISED
       ----------                          -------      -----        -----------  ---------    ---------
<S>                                            <C>         <C>         <C>            <C>        <C>

       OTHER DIRECTOR:
       July 20, 1999                       30,000      US$6.00         01-May-02        --          --
       May 1, 2000                         30,000      US$6.75         01-May-03        --          --
       December 10, 2001                   30,000     US$11.17         09-Dec-04        --          --

       FORMER OFFICER:
       December 31, 2000                   26,924      US$7.10         15-Mar-04        --          --

       NON-EMPLOYEE:
       December 15, 1998                   30,000      US$7.88         03-Apr-03        --          --

       EMPLOYEES:
       July 6, 2001                        22,605     US$ 9.20         04-Aug-05        --          --

</TABLE>


 Weighted average number and exercise price of options (all plans):

<TABLE>
<CAPTION>

                                                    2001                      2000                         1999
                                             --------------------     --------------------        ---------------------
                                                        WEIGHTED                 WEIGHTED                     WEIGHTED
                                                        AVERAGE                  AVERAGE                       AVERAGE
                                                        EXERCISE                 EXERCISE                     EXERCISE
                                              NUMBER    PRICE PER                PRICE PER                    PRICE PER
                                                OF        SHARE       NUMBER OF    SHARE         NUMBER OF      SHARE
                                             OPTIONS       US$         OPTIONS      US$           OPTIONS        US$
                                             -------    ---------     ---------  ---------        -------     ---------
<S>                                            <C>          <C>          <C>         <C>           <C>            <C>
          Outstanding at beginning of year     243,045      $ 5.73       127,786     $4.58         159,010        $3.51
          Granted                              162,054      $10.55       117,538     $6.98          67,554        $4.96
          Exercised                            (61,858)     $ 2.58        (1,136)    $5.47         (91,230)       $5.32
          Forfeited                             (2,105)     $ 5.32        (1,143)    $5.47          (7,548)       $5.32
                                           -------------              -----------              -----------
          Outstanding and exercisable at
          end of year                          341,136      $ 8.59       243,045     $5.73        127,786         $4.58
                                           =============              ===========              ===========
</TABLE>

                                       71
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17. STOCK COMPENSATION (CONTINUED)

The Company determines stock compensation costs according to the methodology
outlined in APB Opinion No. 25. The table below summarizes the proforma effect
if FASB Statement No. 123, the alternative applicable standard, was adopted:


                                         FOR THE YEAR ENDED DECEMBER 31,
                                   --------------------------------------------
                                       2001            2000            1999
                                   ------------   -------------   -------------

Net income                           $2,288,882      $2,111,755   $1,498,105
Basic earnings per ordinary share    $     0.59      $     0.59   $     0.48
Diluted earnings per ordinary share  $     0.57      $     0.58   $     0.47

Weighted average fair value per share under FAS 123 for options granted during
the year:

       Options granted with an exercise price below market price on the date of
grant:

                                             FOR THE YEAR ENDED DECEMBER 31,
                                             ------------------------------
                                             2001           2000       1999
                                             ----           ----       ----

Chairman and CEO                            $3.78             --       $4.07
President, COO and CFO                      $3.78             --       $4.07
Vice President - Operations                 $3.78             --          --
Director of Special Projects                $3.78             --          --
Non-executive director                      $3.89          $2.69       $3.69
Former Officer                                 --             --       $1.84
Employees - preferred stock                 $3.88          $2.66          --
Employees - ordinary share options          $3.08             --          --

Overall weighted average                    $3.71          $2.69       $3.80

       Options granted with an exercise price above market price on the date of
grant:

Chairman and CEO                               --          $2.57          --
President, COO and CFO                         --          $2.57          --
Vice President - Operations                    --          $2.57          --
Director of Special Projects                   --          $2.57          --
Non-executive director                         --             --          --
Former Officer                                 --          $2.57          --
Employees - preferred stock                    --             --          --
Employees - ordinary share options             --             --          --

Overall weighted average                                   $2.57          --




                                       72
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


17.  STOCK COMPENSATION (CONTINUED)

In calculating the fair value for these options under FAS 123 the Black-Scholes
model was used with the following weighted average assumptions:

Options granted with an exercise price below market price on the date of grant:

                                    2001          2000          1999
                                    ----          ----          ----

      Exercise price              $  10.55      $   6.70      $   4.37
      Grant date market value     $  10.97      $   6.97      $   6.98
      Risk free interest rate         3.93%         6.56%         5.75%
      Expected life             3.21 years     3.0 years     2.8 years
      Expected volatility            52.79%        62.64%        72.55%
      Expected dividend yield         3.67%         4.59%         3.46%

      Options granted with an exercise price above market price on the date of
grant:

                                      2001         2000          1999
                                      ----         ----          ----

      Exercise price                    --     $    7.1            --
      Grant date market value           --     $    7.0            --
      Risk free interest rate           --          5.0%           --
      Expected life                     --     3.2 years           --
      Expected volatility               --        62.57%           --
      Expected dividend yield           --         4.57%           --

Weighted average fair value per share under FAS 123 for shares issued during the
year below market price on the date of grant:
<TABLE>
<CAPTION>

                                                   2001                    2000                    1999
                                           --------------------    -------------------     --------------------
                                                     WEIGHTED                WEIGHTED                WEIGHTED
                                                      AVERAGE                 AVERAGE                 AVERAGE
                                           NUMBER   FAIR VALUE     NUMBER   FAIR VALUE     NUMBER   FAIR VALUE
                                             OF      PER SHARE       OF      PER SHARE       OF      PER SHARE
                                           SHARES       US$        SHARES       US$        SHARES       US$
                                           ------    ----------    ------   ----------     ------    ----------

<S>                                           <C>         <C>         <C>         <C>         <C>         <C>
      Employee Share Incentive Plan           3,963       $9.00       2,279       $7.00       9,768       $5.83
      Directors Share Plan                    7,860       $7.25       6,889       $7.13       2,400       $6.75
      Overall weighted average               11,456       $7.86       9,168       $7.09      12,168       $6.01

</TABLE>

                                       73
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


18.  TAXATION

Under current laws of the Cayman Islands, there are no income, estate,
corporation, capital gains or other taxes payable by the Company. The Company
has received a tax exemption with respect to their Belize operations. The
exemption expires in 2006 and is renewable in accordance with the provisions of
the BWSL contract. Services to our customer in the Bahamas are provided by the
Company, which is a Cayman Islands company that is not subject to taxation in
the Commonwealth of the Bahamas.

19.  GOVERNMENT ROYALTIES

Royalty expenses incurred during the year under the terms of the license to
process and supply potable water, granted by the Government of the Cayman
Islands, amounted to $694,351 (2000: $641,428; 1999: $560,441). In accordance
with the terms of the license, royalties are payable at the rate of 7.5% of
gross US gallon water sales. Payments are made monthly in arrears.

20.  PENSION BENEFITS

A staff pension scheme commenced during June 1995 and was offered to all
employees, both full and part-time. The scheme is administered by the Cayman
Islands Chamber of Commerce and is a defined contribution plan, whereby the
Company matches the contribution of the first 5% of each participating
employee's salary. The total amount recognized as an expense under the scheme
during 2001 was $63,740 (2000: $67,760 1999: $48,554).

21.  FINANCIAL INSTRUMENTS

CREDIT RISK:

Financial assets that potentially subject the Group to concentrations of credit
risk consist principally of cash and accounts receivable. The majority of the
Group's cash balances are placed with high credit quality financial
institutions. With respect to accounts receivable, the Group's operations in
Belize as described in Note 1 are concentrated with one customer. In addition,
the Group's operations in Bahamas also described in Note 1 are also concentrated
with one customer. As a result, the Group is subject to credit risk to the
extent of any non-performance by these customers. As at December 31, 2001 the
Group was owed $213,647 from the Belize customer and $448 from the Bahamian
customer. Credit risk with respect to the remainder of the accounts receivable
balance is limited due to the large number of customers comprising the Company's
customer base and the ability of the Company to withdraw supply in the event of
non-payment.

INTEREST RATE RISK:

The interest rates and terms of the Company's loans and Water Purchase Agreement
are presented in Notes 8 and 15 respectively.



                                       74
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


21.  FINANCIAL INSTRUMENTS (CONTINUED)

FAIR VALUES:

At December 31, 2001 and 2000 the carrying amounts of cash and short term bank
deposits and bank overdrafts, accounts receivable, accounts payable and accrued
expenses approximated their fair values due to the short term maturities of
these assets and liabilities. The Directors consider that the carrying amount
for long term debt (Note 8) due to Royal Bank of Canada approximates fair value
due to the characteristics of this debt. The fair value for long term debt due
to European Investment Bank is approximately $1,041,000 (2000: $1,207,000)
although this does not necessarily indicate that the Company could extinguish
this debt for an amount lower than the carrying value. Fair value of this long
term debt for which no market value is readily available is determined by the
Company using predetermined future cash flows discounted at an estimated current
incremental rate of borrowing for a similar liability. In establishing an
estimated incremental rate, the Company has evaluated the existing transactions,
as well as comparable industry and economic data and other relevant factors such
as pending transactions, subsequent events and the amount the Company would have
to pay a credit worthy third party to assume the liability, with the creditors
legal consent.

22.  NON-CASH TRANSACTIONS

The Company made the following non-cash transactions:
<TABLE>
<CAPTION>

                                                        2001          2000          1999
                                                      --------     ---------      --------
<S>                                                     <C>           <C>           <C>
Redemption of preferred stock and issue of
replacement ordinary shares of common
stock at $nil consideration (14,260, 10,639,
and 14,835 shares respectively) (Note 9)              $ 17,112     $  12,767      $ 17,802
                                                      ========     =========      ========

Preferred stock issued to employees at $nil
consideration (3,963, 2,279, and 9,768 shares
respectively) (Notes 9 and 17)                        $  4,756     $   2,735      $ 11,722
Redemption of non-vested preferred stock at $nil
consideration (nil, 200, and nil  shares
respectively) (Note 9)                                      --          (240)           --
Ordinary shares of common stock issued under the
Directors Share Plan at $nil consideration
(7,861, 6,890, and 2,400, respectively) (Note 17)       56,998        49,084        14,850
Additional paid in capital from stock options          227,420            --       350,688
                                                      --------     ---------      --------
                                                      $289,174     $  51,579      $377,260
                                                      ========     =========      ========
Reduction in ordinary shares and additional
paid in capital from cancellation of shares
repurchased (Note 9)                                  $271,595     $ 494,375      $758,928
                                                      ========     =========      ========
Dividends declared but not paid (Note 7)              $499,383     $ 401,965      $266,585
                                                      ========     =========      ========
Depreciation charges capitalized (Note 4)             $ 24,764     $  33,682      $ 35,749
                                                      ========     =========      ========

</TABLE>



                                       75
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


23.  IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

During the year ended December 31, 2001, the Financial Accounting Standards
Board issued four standards. A summary of these standards is given below:

Statement of Financial Accounting Standard No. 141, "Business Combinations" (FAS
141) addresses financial accounting and reporting for business combinations. It
requires all business combinations covered by the scope of the Standard to be
accounted for using the purchase method. It is effective for business
combinations initiated after June 30, 2001 and business combinations completed
on July 1, 2001 and later which use the purchase method of accounting. Although
the Company has no pending business combinations that would be affected by this
statement, the requirements of this statement will be considered in any business
combination contemplated in the future.

Statement of Financial Accounting Standard No. 142, "Goodwill and Other
Intangible Assets" (FAS 142) addresses financial accounting and reporting for
goodwill and other intangible assets subsequent to their acquisition. It
requires that goodwill and other intangible assets having indefinite useful
lives be tested annually for impairment using a fair-value based test and
prohibits amortization. Assets having finite useful lives would continue to be
amortized over those lives. The Standard also provides specific guidance for
testing goodwill and other intangible assets for impairment and also requires
additional disclosures concerning goodwill and other intangible assets. FAS 142
is effective for fiscal years beginning after December 15, 2001 and must be
applied to all goodwill and other intangible assets recognized in financial
statements as of the start of that fiscal year. Impairment losses resulting from
the initial application of the Standard are to be reported as resulting from a
change in accounting principle. At this time, the Company does not believe the
adoption of the Standard will have an impact on its financial position or
results of operations.

Statement of Financial Accounting Standard No. 143, "Accounting for Asset
Retirement Obligations" (FAS 143) addresses the recognition and measurement of a
liability for an asset retirement obligation and the associated asset retirement
costs. It requires that an existing legal obligation associated with the
retirement of a tangible long-lived asset be recognized as a liability when
incurred and outlines the method of measuring that liability. It is effective
for financial years beginning after June 15, 2002. Currently the Company has no
legal obligations relating to asset retirement, however the requirements of this
statement will be considered if any legal obligations relating to the retirement
of long-lived assets arise in the future.

Statement of Financial Accounting Standard No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" (FAS 144) addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of. It requires that an impairment loss be
recognized if the carrying amount of a long-lived asset is not recoverable and
exceeds the fair value of the long-lived asset. The Standard also provides
guidance on estimating future cash flows used to test a long-lived asset for
recoverability. The test for impairment should be performed whenever events or
circumstances indicate that its carrying value may not be recoverable.
Restoration of previously recognized impairment loss is prohibited. FAS 144 is
effective for fiscal years beginning after December 15, 2001. For the year ended
December 31, 2001 the Company performed an impairment test on its long-lived
assets of which no impairment was found.



                                       76
<PAGE>
                           CONSOLIDATED WATER CO. LTD.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


24.  COMPARATIVE FIGURES

Certain of the prior years figures have been adjusted to conform to the current
years presentation.

25.  SUBSEQUENT EVENT

Subsequent to the year end, on February 1, 2002 the Company acquired and took
possession of the reverse osmosis plant, equipment and water storage facilities
comprising the potable water production plant at the Hyatt Grand Cayman Hotel
and Ellesmere Britannia Golf Course located on Grand Cayman, Cayman Islands. The
consideration for the operations acquired was a cash payment of $1,500,000.
(Notes 14 and 16)



                                       77
<PAGE>




ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

OUR DIRECTORS AND EXECUTIVE OFFICERS

          Under our license with the Cayman Islands government, the Cayman
Islands government must approve all of our executive officers and directors.
This table lists information concerning our executive officers and directors:

<TABLE>
<CAPTION>
          NAME                        AGE    POSITION WITH CONSOLIDATED WATER
          ----                        ---    --------------------------------
<S>                                   <C>    <C>
          Jeffrey M. Parker           57     Director, Chairman of the board of directors
                                             and Chief Executive Officer
          Frederick W. McTaggart      39     Director, President,  Chief Operating
                                             Officer and Chief Financial Officer
          Peter D. Ribbins            54     Director - Special Projects and Company
                                             Secretary
          Gregory S. McTaggart        38     Vice President - Operations
          J. Bruce Bugg, Jr.          47     Director and Vice Chairman of the board of
                                             directors
          Brian E. Butler             52     Director
          Steven A. Carr              51     Director
          Richard L. Finlay           43     Director
          Clarence B. Flowers, Jr.    44     Director
          Wilmer Pergande             62     Director
          Raymond Whittaker           48     Director
          Carson J. Ebanks, JP        45     Director
</TABLE>

         JEFFREY M. PARKER has been a director of our company since 1980, the
Chairman of the Board since 1982 and Chief Executive Officer since 1994. In
addition to serving as our Chief Executive Officer and Chairman of the Board,
Mr. Parker is a Chartered Accountant and practices at Moore Stephens in the
Cayman Islands, a member of Moore Stephens International Ltd. From 1993 to 1995,
Mr. Parker served as a director of The International Desalination Association
representing the Caribbean & Latin America. Mr. Parker received his ACA
designation as a chartered accountant in England and Wales in 1967, and his FCA
designation in 1977.

         FREDERICK W. MCTAGGART has been a director of our company since 1998,
and the President and Chief Operating Officer since October 2000 and Chief
Financial Officer since February 2001. From April 1994 to October 2000, Mr.
McTaggart was the Managing Director of the Water Authority-Cayman, the
government-owned water utility serving certain areas of the Cayman Islands. He
received his B.S. degree in Building Construction from the Georgia Institute of
Technology in 1985. Mr. McTaggart is the brother of Mr. Gregory S. McTaggart,
the Vice President - Operations.



                                       78
<PAGE>


         PETER D. RIBBINS is our Director-Special Projects and Company Secretary
and has served as a director since 1989. Mr. Ribbins joined our company in 1983
as its General Manager, a position he held until 1989, when he was appointed
Managing Director. He was appointed President and Chief Operating Officer in
1994 and resigned from that position in October 2000 for personal reasons. Mr.
Ribbins obtained his B.S. degree in Kinanthropology from the University of
Ottawa, Canada in 1971.

         GREGORY S. MCTAGGART is our Vice President-Operations. Mr. McTaggart
joined our company in January 1991 as our resident engineer and has served in
his current capacity since 1994. For three years before joining us, Mr.
McTaggart worked for the Caribbean Utilities Company as a mechanical engineer.
Mr. McTaggart obtained his B.S. degree in Mechanical Engineering from the
Georgia Institute of Technology in 1986. Mr. McTaggart is the brother of
Frederick W. McTaggart, the President, Chief Operating Officer, Chief Financial
Officer and director.

         J. BRUCE BUGG, JR. has been a director and our Vice-Chairman of the
Board since 1998. Mr. Bugg is also, and has been since 1997, the Chairman of the
board of directors and Chief Executive Officer of Argyle Investment Co., the
general partner of Argyle Partners Ltd., the sole general partner of
Argyle/Cay-Water, Ltd. From 1996 to 1997, Mr. Bugg served as Vice Chairman of
First Southwest Company and Chairman of its Investment Banking Group.

         BRIAN E. BUTLER has been a director of our company since 1983. Since
1977, Mr. Butler has been the principal of Columbus Developments Ltd., a
property development company specializing in luxury resort projects in the
Cayman Islands.

         STEVEN A. CARR has served as a director of our company since May 2000.
Since 1994, Mr. Carr has been the President of Carr & Associates, a private
investment firm located in Bryan, Texas. Before joining Carr & Associates, Mr.
Carr held a variety of executive positions and participated in the ownership and
management of a number of telecommunications ventures throughout the United
States. Mr. Carr has served as an alternate director on our board of directors
for his father, Hal N. Carr, since 1998. Mr. Carr is also currently a director
of the First National Bank of Bryan. In addition to his business interests, Mr.
Carr is a senior lecturer at the Mays College and Graduate School of Business at
Texas A&M University and a councilor of the Texas A&M Research Foundation.

         RICHARD L. FINLAY has served as a director of our company since 1995.
Mr. Finlay is an attorney and partner with the Cayman Islands law firm of
Charles Adams, Ritchie and Duckworth. Before joining this firm in 1993, he
served as Director of Legal Studies of the Cayman Islands Government from 1989
to 1992. From 1983 to 1989, Mr. Finlay was a partner with the Canadian law firm
of Olive, Waller, Zinkhan and Waller. Mr. Finlay has served as the Cayman
Islands' representative to the International Company and Commercial Law Review
and is a former editor of the Cayman Islands Law Bulletin.

         CLARENCE B. FLOWERS, JR. has been a director of our company since 1991.
Mr. Flowers is, and has been since 1985, the principal of Orchid Development
Company, a real estate developer in the Cayman Islands. Mr. Flowers also serves
as a director of C.L. Flowers & Son, which is the largest manufacturer of
concrete blocks in the Cayman Islands.

         WILMER PERGANDE has been a director of our company since 1978. Mr.
Pergande is the Vice-President of Special Projects of Osmonics, Inc. of
Minnetonka, Minnesota, a publicly traded company and the third largest water
treatment company in North America. Before joining Osmonics, Mr. Pergande was
the Chief Executive Officer of Licon International, Inc., a publicly traded
manufacturer of liquid processing equipment. Previously, Mr. Pergande held
several executive positions with Mechanical Equipment Company, Inc., a
manufacturer of seawater conversion equipment.



                                       79
<PAGE>


         RAYMOND WHITTAKER has served as a director of our company since 1988.
Mr. Whittaker was the Managing Director of TransOcean Bank & Trust, Ltd., a bank
and trust company located in the Cayman Islands and a subsidiary of Johnson
International, Inc., a bank holding company located in Racine, Wisconsin from
1984 to December 2000. He is now the principal of his own company and management
firm.

         CARSON K. EBANKS, JP, became the government nominated Director of our
company in May of 2001. Mr. Ebanks was the Director of Planning for the Cayman
Islands from 1991 - 1997. Since 1997, he has served the Cayman Islands
Government as a Permanent Secretary currently for the Ministry of Community
Services, Women's Affairs, Youth and Sports. Mr. Ebanks is a Justice of the
Peace, a Fellow of the Royal Geographic Society and a member of the American
Planning Association. He holds a Bachelor of Environmental Studies (Hons. Urban
and Regional Planning - Peace and Conflict Studies Minor) from the University of
Waterloo and a Master of Arts - Planning in Community and Regional Planning from
the University of British Columbia. He is a Director of the Water Authority -
Cayman and a trustee of the National Gallery of the Cayman Islands. Mr. Ebanks
has served on the Boards of the Trustees for the Cayman Islands Museum, the
Cayman Islands Civil Service Co-operative Credit Union, the Housing Development
Corporation and the Vice President of the Cayman Islands Olympic Committee.

COMPOSITION OF THE BOARD OF DIRECTORS

         The board of directors is organized into three groups. Each group holds
office for a three year period and re-election of the board members is staggered
so that two-thirds of the board members are not subject to re-election in any
given year. The groups are organized alphabetically as follows:

         GROUP 1              GROUP 2                       GROUP 3
         -------              -------                       -------
         J. Bruce Bugg Jr.    Carson K. Ebanks, JP          Wilmer Pergande
         Brian Butler         Richard Finlay                Peter D. Ribbins
         Steven A. Carr       Clarence Flowers, Jr.         Raymond Whittaker
                              Frederick McTaggart
                              Jeffrey M. Parker

         Group 1 was re-elected at our annual shareholders' meeting in May 2001.
Group 2 will be proposed for re-election during the year ending December 31,
2002 and then Group 3 during the year ending December 31, 2003.

         Under our license, the Cayman Islands government may nominate three
persons to serve on our board of directors. We must cause one of the persons
nominated by the government to be elected as a director. In May 2001, Carson K.
Ebanks, JP was elected as the government's nominee.

         On April 17, 1997, Argyle/Cay-Water, Ltd. filed an application with the
Cayman Islands government for permission to acquire up to 50% of our issued and
outstanding shares. We did not support Argyle's attempt to gain control of our
company. On July 22, 1997, the Cayman Islands government approved Argyle's
application. J. Bruce Bugg, Jr. is the sole shareholder and Chairman and Chief
Executive Officer of Argyle Investment Co., the general partner of Argyle
Partners Ltd., the sole general partner of Argyle/Cay-Water, Ltd.




                                       80
<PAGE>


         On March 31, 1998, we reached an agreement with Argyle/Cay-Water, Ltd.
During the five-year term of this agreement, we agreed to appoint Mr. Bugg as
Vice Chairman of our board of directors in exchange for which Mr. Bugg and
Argyle/Cay-Water, Ltd. agreed not to acquire more than 19.9% of the ordinary
shares. Our main obligations under the agreement are to recommend to our
shareholders the appointment of Mr. Bugg (or his successor) to the board of
directors and, with several exceptions, to obtain Argyle/Cay-Water, Ltd.'s
consent before issuing any of our securities.

         During the term of the agreement, Argyle/Cay-Water, Ltd. and Mr. Bugg
may not participate in proxy solicitation, seek to control or influence our
management, except in accordance with Mr. Bugg's duties as a director, or
challenge the validity of the option deed.

ITEM 11. EXECUTIVE COMPENSATION

         The following table provides summary information concerning the annual
and long-term compensation earned by the company's chief executive officer and
each of the three other most highly compensated executive officers of the
company during the fiscal years ended December 31, 2001, 2000 and 1999:

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                          ANNUAL COMPENSATION                              LONG-TERM COMPENSATION
                               -------------------------------------------          ----------------------------------
                                                             OTHER ANNUAL              SECURITIES          ALL OTHER
                               YEAR     SALARY      BONUS    COMPENSATION              UNDERLYING        COMPENSATION
NAME AND PRINCIPAL POSITION     ($)      ($)         ($)         ($)                   OPTIONS(#)             ($)
- ---------------------------     ---      ---         ---     ------------              ----------        ------------
<S>                            <C>        <C>        <C>      <C>                         <C>        <C>
Jeffrey M. Parker              1999       90,000     91,262            --                 7,786                 --
Chairman and Chief Executive   2000       94,590    143,314            --                26,294                 --
Officer                        2001       95,895     86,176            --                28,507                 --


Frederick W. McTaggart         1999           --         --            --                    --                 --
Director, President and        2000      116,400     21,171            --                 5,609                 --
Chief Operating Officer        2001      118,006     88,765            --                28,533                 --


Peter D. Ribbins               1999      116,496     66,265            --                20,000                 --
Director - Special Projects    2000      121,447     80,448            --                 5,609                 --
                               2001      118,006         --            --                27,646                 --


Gregory S. McTaggart           1999       79,209     10,730         8,678                    --                 --
Vice President Operations      2000       83,248     17,155         1,808                20,193                 --
                               2001       85,932      8,759            --                20,800                 --

</TABLE>


         The salary shown in 2000 for Mr. Frederick McTaggart, who joined the
company in October 2000, is annualized based upon a full year of employment for
comparative purposes. Mr. Frederick McTaggart's actual salary for 2000 was
$24,772.



                                       81
<PAGE>


         All options granted to Messrs. Parker, Frederick McTaggart, Ribbins and
Gregory McTaggart in 1999 have an exercise price of $2.50 per share, in 2000
they have an exercise price of $7.10 per share and in 2001 they have an exercise
price of $10.84 per share.

         The other annual compensation granted to Gregory McTaggart is comprised
of redeemable preferred shares issued to them under our share incentive plan.
Under our share incentive plan, half of the redeemable preferred shares are
issued at no cost to the employee and the employee may purchase, for cash, an
equal number of redeemable preferred shares at an exercise price of
approximately 75% of the market price of the ordinary shares at the time of
issuance. These shares issued to Mr. Gregory McTaggart had a market price of
$5.71 per share and $5.47 per share, in 1999 and 2000, respectively, on the date
of grant.

STOCK OPTION GRANTS

         The following table provides information, with respect to the chief
executive officer and the other named executive officers listed in the Summary
Compensation Table, concerning stock options granted on ordinary shares in
fiscal year 2001:
<TABLE>
<CAPTION>

                                                                                          POTENTIAL REALIZABLE VALUE
                                            % OF TOTAL                                      AT ASSUMED ANNUAL RATES
                                            OPTIONS                                       OF STOCK PRICE APPRECIATION
                                             GRANTED                                            FOR OPTION TERM
                                               TO                                        ------------------------------
                                 OPTIONS    EMPLOYEES    EXERCISE OR                      AT 5% ANNUAL   AT 10% ANNUAL
                                 GRANTED    IN FISCAL    BASE PRICE     EXPIRATION        GROWTH RATE     GROWTH RATE
NAME                               (#)        YEAR         ($/SH)          DATE               ($)             ($)
- ----                               ---      ---------    -----------    ----------        -----------    -------------

<S>                                 <C>        <C>          <C>          <C>   <C>               <C>           <C>
Jeffrey M. Parker                   28,507     18%          10.84        03/10/05                65,844        117,434

Frederick W. McTaggart              28,533     18%          10.84        03/10/05                65,904        117,541

Peter D. Ribbins                    27,646     17%          10.84        03/10/05                63,855        113,887

Gregory S. McTaggart                20,800     13%          10.84        03/10/05                48,043         85,685

</TABLE>

         Market value on grant date (December 31, 2001) of these options was
U.S. $11.34.

STOCK OPTION HOLDINGS

         The following table provides information, with respect to the chief
executive officer and the other named executive officers listed in the Summary
Compensation Table, concerning the holding of unexercised options at the end of,
fiscal year 2001:

<TABLE>
<CAPTION>

                                                            NUMBER OF SECURITIES             VALUE OF UNEXERCISED
                                                           UNDERLYING UNEXERCISED                IN-THE-MONEY
                                 SHARES                  OPTIONS AT FISCAL YEAR END       OPTIONS AT FISCAL YEAR END
                                ACQUIRED      VALUE     -----------------------------    -----------------------------
                               ON EXERCISE   REALIZED    EXERCISABLE   UNEXERCISABLE      EXERCISABLE   UNEXERCISABLE
NAME                               (#)         ($)           (#)            (#)               ($)            ($)
- ----                           -----------  ---------    -----------   -------------      -----------   -------------
<S>                                <C>         <C>           <C>            <C>               <C>            <C>
Jeffrey M. Parker                    --           --           63,217        --                197,240        --

Frederick W. McTaggart               --           --           34,142        --                 38,049        --

Peter D. Ribbins                 60,000      427,600           33,255        --                 37,605        --

Gregory S. McTaggart                 --           --           40,993        --                 96,018        --

</TABLE>

                                       82
<PAGE>


EMPLOYEE SHARE INCENTIVE PLAN

         Since April 8, 1987, we have maintained an employee share incentive
plan for our long-term employees who are not directors. To become eligible for
the employee share incentive plan, an employee must complete four years of
service with us and then retain the shares for an additional four years before
he can transfer or sell the shares. We may, at our option, offer to exchange the
redeemable preferred shares issued to the employee for an equal number of freely
tradable ordinary shares at any time during the four year holding period. Within
the four year holding period, if an employee ceases to be employed by our
company, our company, at the sole discretion of the board of directors, may
redeem the redeemable shares held by that employee for less than four years at
the price which the employee originally paid for the shares.

         Under the plan, employees are issued redeemable preferred shares on an
annual basis at no cost based on a formula which takes into consideration the
employee's salary and the total dividend paid to ordinary shareholders as a
percentage of the total shareholder's equity in each year. If an employee
remains employed by us for at least four years, or a person or affiliated group
of persons acquires 30% or more of our ordinary shares, we are obligated to
exchange the redeemable preferred shares (whether or not the redeemable
preferred shares have been held for four years) for the same number of ordinary
shares. We are also obligated to exchange the redeemable preferred shares for an
equal number of ordinary shares if an employee's employment with us or any of
our affiliates terminates by reason of the employee's death, permanent
disability or the employee reaches the age of 65 years. However, if an
employee's employment with us or any of our affiliates terminates for any other
reason, we may at any time up to and including the first anniversary of such
termination, redeem the employee's redeemable preferred shares for cash equal to
75% of the average of the closing market price for our ordinary shares on each
of the first seven trading days in the month of October of the year in which the
redeemable preferred shares were issued to the employee.

         Under the plan, when an employee is issued redeemable preferred shares,
the employee is also granted an option to purchase an equal number of redeemable
preferred shares at approximately 75% of the average market price of the
ordinary shares. The exercise price is determined during the ten days after our
annual shareholder's meeting. This option expires, unless exercised by the
employee, within forty (40) days after the date of our annual shareholders'
meeting. Since we adopted the employee share incentive plan, our employees, who
are currently in the plan, have acquired 98,929 redeemable preferred shares, of
which 73,734 have been redeemed for an equal number of ordinary shares.

EMPLOYEE SHARE OPTION PLAN

         In 2001 we established an employee share option plan for certain
long-term employees who participate in the share incentive plan. This plan was
introduced in order to compensate these employees for adjustments in the
employee share incentive plan. Under the share option plan, these employees are
granted in each calendar year, as long as the employee is a participant in the
employee share incentive plan, options to purchase ordinary shares of common
stock. The price at which the option may be exercised will be the closing market
price on the grant date, which is 40 days after the date of the Company's annual
shareholder meeting. The number of options each employee is granted is equal to
five times the sum of (i) the number of redeemable preferred stock which that
employee receives for $nil consideration and (ii) the number of redeemable
preferred stock options which that employee exercises in that given year. The
option may be exercised during the period commencing on the fourth anniversary
of the grant date and ending on the thirtieth day after the fourth anniversary
of the grant date.



                                       83
<PAGE>


NON-EXECUTIVE DIRECTORS' SHARE PLAN

         In 1999, we implemented a share grant plan for our directors who are
not executive officers or serving as the Cayman Islands' government
representative on our board. Under this plan, a director receives ordinary
shares based upon the number of board and committee meetings that the director
attends during the year. Each board meeting is worth the share equivalent of a
$1,200 fee and each committee meeting is worth the share equivalent of a $600
fee. Attendance fees are accumulated throughout the year and then divided by the
prevailing market price on October 1st of the preceding year to determine the
number of shares to be granted for the current year. On October 1, 2001, the
directors as a group received 7,860 ordinary shares at the prevailing market
price on October 1, 2000 of $7.25 per share. The strike price set on October 1,
2001 was $10.70. The necessary accrual has been made as at December 31, 2001 for
the last 3 months attendance costs.

EMPLOYMENT AGREEMENTS

         We entered into an employment agreement with Jeffrey M. Parker, our
Chairman of the board of directors and Chief Executive Officer. Mr. Parker
devotes at least 75% of his working time to our company and the remainder of his
working time to his accountancy practice. This agreement, as amended, was
originally scheduled to expire on December 31, 2001, although it extends
automatically each year for an additional one year term. If we terminate Mr.
Parker without cause, he is entitled to all financial benefits under the
agreement for a period of two years and any unvested stock options for the year
in which Mr. Parker is terminated automatically vest and become fully
exercisable. Under prior employment agreements, in each of the four years ended
December 31, 1995, 1996, 1997 and 1998, Mr. Parker was granted an option to
purchase that number of ordinary shares which was equal to 2.5% of our net
profit before dividends or extraordinary items for that year. The exercise price
of these options was $2.50 per share. For each of the three years ended December
31, 1999, 2000 and 2001, Mr. Parker has been granted an option to purchase that
number of ordinary shares which equals 1% of our net profit for that year. The
exercise price of the options granted in 1999 is $2.50 per share, and the
exercise price of the options to be granted from 2000 and on will be equal to
the average of the closing market price of the ordinary shares on each of the
first seven trading days in the month of October of that financial year. In
1999, Mr. Parker was granted an option to purchase 7,786 ordinary shares at an
exercise price of $2.50. In 2000, Mr. Parker was granted an option to purchase
26,924 ordinary shares at an exercise price of $7.10. For the year ended
December 31, 2001, Mr. Parker was granted an option to purchase 28,507 ordinary
shares at an exercise price of $10.84. In August 1997 and March 1999, Mr. Parker
exercised options to purchase 101,705 and 29,010 ordinary shares, respectively,
representing all the options that were held by Mr. Parker on those dates. All
options granted to Mr. Parker after March 1999 expire on the third anniversary
of the date of the Auditor's Report on the financial statements for the year of
grant.

         In addition to serving as our Chairman of the Board and Chief Executive
Officer, Mr. Parker owns an accountancy practice in the Cayman Islands. Until
1999, we paid the accountancy practice for services rendered to us by Mr. Parker
through his practice. In 1999, we began paying Mr. Parker directly for his
services. During 2001, his accounting practice provided us professional services
in the amount of $4,523. In addition, we reimbursed his accounting practice
$1,355 for communication charges made on our behalf.

         We entered into an employment agreement with Frederick W. McTaggart,
our President, Chief Operating Officer and Chief Financial Officer. The
agreement is scheduled to expire on October 16, 2003, although it extends
automatically each year for an additional one year term. If we terminate Mr.
Frederick McTaggart without cause, he is entitled to all financial benefits
under the agreement for a period of two years and any unvested stock options for
the year in which Mr. Frederick McTaggart is terminated automatically vest and
become fully exercisable. Mr. Frederick McTaggart shall be granted an option to
purchase that number of ordinary shares which equals 1% of our net profit for
each year. The exercise price of the options to be granted will be equal to the




                                       84
<PAGE>

average of the closing market price of the ordinary shares on each of the first
seven trading days in the month of October of that financial year. In 2000, Mr.
Frederick McTaggart was granted an option to purchase 5,609 ordinary shares at
an exercise price of $7.10. For the year ended December 31, 2001, Mr. Frederick
McTaggart was granted an option to purchase 28,533 ordinary shares at an
exercise price of $10.84. All options granted to Mr. Frederick McTaggart expire
on the third anniversary of the date of the Auditor's Report on the financial
statements for the year of grant.

         We entered into an employment agreement with Peter D. Ribbins, our
former President and Chief Operating Officer and currently Director - Special
Projects. The agreement fixes the salary of Mr. Ribbins until October 31, 2003
and thereafter it will be determined by mutual consent. In each of the five
years ended December 31, 1995, 1996, 1997, 1998 and 1999, Mr. Ribbins was
granted an option to purchase 20,000 ordinary shares at an exercise price of
$2.50 per share. In 2000, Mr. Ribbins was granted an option to purchase 5,609
ordinary shares at an exercise price of $7.10. Mr. Ribbins was granted an option
to purchase that number of ordinary shares which equals 1% of our net profit for
each year. The exercise price of the options to be granted will be equal to the
average of the closing market price of the ordinary shares on each of the first
seven trading days in the month of October of that financial year. For the year
ended December 31, 2001, Mr. Ribbins was granted an option to purchase 27,646
ordinary shares at an exercise price of $10.84. In May 1999, February 2001 and
July 2001, Mr. Ribbins exercised options to purchase 60,000, 20,000 and 40,000
ordinary shares, respectively. All options granted to Mr. Ribbins expire on the
third anniversary of the date of the Auditor's Report on the financial
statements for the year of grant.

         We entered into an employment agreement with Gregory McTaggart, our
Vice President of Operations. This agreement was originally scheduled to expire
on August 19, 2001, although it extends automatically each year for an
additional one year term. Under the agreement, if we terminate Mr. Gregory
McTaggart without cause, he is entitled to all financial benefits under the
agreement for a period of one year. For each year beginning in 2000, Mr. Gregory
McTaggart will be granted an option to purchase that number of ordinary shares
which equals 0.75% of our net profit for that year. The exercise price of the
options to be granted to Mr. Gregory McTaggart will be equal to the average of
the closing market price of the ordinary shares on each of the first seven
trading days in the month of October of the year in which the options are
granted. In 2000, Mr. Gregory McTaggart was granted an option to purchase 20,193
ordinary shares at an exercise price of $7.10. For the year ended December 31,
2001, Mr. Gregory McTaggart was granted an option to purchase 20,800 ordinary
shares at an exercise price of $10.84. All options granted to Mr. Gregory
McTaggart expire on the third anniversary of the date of the Auditor's Report on
the financial statements for the year of grant. As a result of the option grant
described above, Mr. Gregory McTaggart will no longer be eligible to participate
in the employee share incentive plan for fiscal years after 1999.



                                       85
<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The table below sets forth the beneficial ownership of our ordinary
shares, par value CI$1.00 per share, of which 3,920,313 are outstanding as of
March 19, 2002, and our redeemable preferred shares, par value CI$1.00 per
share, of which 25,195 are outstanding as of March 19, 2002 by:

         o  each person or entity that we know beneficially owns more than 5% of
            our ordinary shares or redeemable preferred shares;

         o  each of our executive officers and directors; and

         o  all of our officers and directors as a group.
<TABLE>
<CAPTION>

         TITLE OF                IDENTITY OF                           AMOUNT     PERCENTAGE
         CLASS                   PERSON OR GROUP                        OWNED       OF CLASS
         -----                   ---------------                        -----       --------
<S>                              <C>                                  <C>              <C>
         Ordinary Shares         Argyle/Cay-Water, Ltd.               477,662          12.2%

         Ordinary Shares         Jeffrey M. Parker,                   210,432           5.4%
                                 Chairman of the board, and CEO

         Ordinary Shares         Frederick W. McTaggart,               34,242              *
                                 Director, President, Chief
                                 Operating Officer and Chief
                                 Financial Officer

         Ordinary Shares         Peter D. Ribbins,                    132,855           3.4%
                                 Director - Special Projects
                                 and Company Secretary

         Ordinary Shares         Gregory S McTaggart,                  51,806           1.3%
                                 Vice President Operations

         Ordinary Shares         J. Bruce Bugg, Jr.,                  569,622          14.5%
                                 Director and Vice Chairman of
                                 the board of directors

         Ordinary Shares         Brian E. Butler,                      16,250              *
                                 Director

         Ordinary Shares         Steven A. Carr,                       44,235           1.1%
                                 Director

         Ordinary Shares         Richard L. Finlay,                     8,417              *
                                 Director

         Ordinary Shares         Clarence B. Flowers, Jr.,              3,340              *
                                 Director

         Ordinary Shares         Wilmer Pergande,                       3,877              *
                                 Director

         Ordinary Shares         Raymond Whittaker,                    10,655              *
                                 Director

         Ordinary Shares         Carson K. Ebanks,                         --             --
                                 Director

         Ordinary Shares         Directors and Executive            1,085,731          27.7%
                                 Officers as a Group
                                 (12 persons)

</TABLE>

                                       86
<PAGE>


<TABLE>
<CAPTION>

         TITLE OF                IDENTITY OF                           AMOUNT     PERCENTAGE
         CLASS                   PERSON OR GROUP                        OWNED       OF CLASS
         -----                   ---------------                        -----       --------
<S>                              <C>                                      <C>           <C>
         Redeemable              Gregory McTaggart                        297           1.2%
         Preferred Shares        Vice President Operations

         Redeemable              Directors and Executive                  297           1.2%
         Preferred Shares        Officers as a group (1 person)

         Redeemable              Abel Castillo                          3,582          14.2%
         Preferred Shares        Operations Manager

         Redeemable              Margaret Julier,                       2,707          10.7%
         Preferred Shares        Office Manager

         Redeemable              William Banker                         4,880          19.4%
         Preferred Shares        Operations Manager

         Redeemable              Rayburn Conolly                        2,877          11.4%
         Preferred Shares        Retired employee

         Redeemable              Chet Ritch                             1,496           5.9%
         Preferred Shares        Operations

         Redeemable              Rudy Ritch                             2,367           9.4%
         Preferred Shares        Operations

         Redeemable              Helbert Rodriquez                      1,496           5.9%
         Preferred Shares        Operations

         Redeemable              Ivan Tabora                            1,342           5.3%
         Preferred Shares        Operations
</TABLE>

         An asterisk (*) in the above table indicates less than one percent

         The address for Jeffrey Parker, Frederick McTaggart, Peter Ribbins,
Gregory McTaggart, Abel Castillo, Margaret Julier, William Banker, Chet Ritch,
Rudy Ritch, Helbert Rodriquez and Ivan Tabora is as follows: c/o Consolidated
Water Co. Ltd., Trafalgar Place, West Bay Road, P.O. Box 1114GT, Grand Cayman,
B.W.I. The address for each of J. Bruce Bugg Jr. and Argyle/Cay-Water, Ltd. is
c/o Argyle Investment Corp., 1500 Nations Bank Plaza, 300 Convent Street, San
Antonio, Texas 78205. The address for Brian Butler is P.O. Box 2581GT, Grand
Cayman, B.W.I.. The address for Steven A. Carr c/o Carr & Associates, 4103 South
Texas Avenue, Suite 209, Bryan, Texas 77802. The address for Richard Finlay is
P.O. Box 709GT, Grand Cayman, B.W.I.. The address for Clarence Flowers, Jr. is
P.O. Box 2581GT, Grand Cayman, B.W.I.. The address for Wilmer Pergande is 3724
Bengal Road, Gulf Breeze, Florida 32561. The address for Raymond Whittaker is
P.O. Box 1982GT, Grand Cayman, B.W.I. The address from Rayburn Conolly is P.O
Box 27 East End, Grand Cayman, B.W.I.




                                       87
<PAGE>


         Unless otherwise indicated, to our knowledge, the persons named in the
table above have sole voting and investment power with respect to the shares
listed. In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares issuable under stock options
exercisable within 60 days after March 19, 2002 are deemed outstanding for that
person but are not deemed outstanding for computing the percentage of ownership
of any other person. Of the 210,432 ordinary shares owned by Mr. Parker, 63,217
of these shares are ordinary shares underlying options granted to Mr. Parker,
which may be exercised within 60 days after March 19, 2002. Of the 34,242
ordinary shares owned by Mr. Frederick McTaggart, 34,142 are ordinary shares
underlying options granted to Mr. Frederick McTaggart, which may be exercised
within 60 days after March 19, 2002. Of the 132,855 ordinary shares owned by Mr.
Ribbins, 33,255 are ordinary shares underlying options granted to Mr. Ribbins,
which may be exercised within 60 days after March 19, 2002. Mr. Bugg is deemed
the beneficial owner of the 477,662 ordinary shares held by Argyle/Cay-Water,
Ltd. Of the 569,622 ordinary shares beneficially owned by Mr. Bugg, 90,000 are
ordinary shares underlying options granted to Mr. Bugg, which may be exercised
within 60 days after March 19, 2002. Of the 51,806 ordinary shares owned by Mr.
Gregory McTaggart, 40,993 are ordinary shares underlying options granted to Mr.
Gregory McTaggart, which may be exercised within 60 days after March 19, 2002
and 297 are redeemable preferred shares, which may be exercised or converted
within 60 days after March 19, 2002.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         As consideration for J. Bruce Bugg, Jr.'s services to us as in an
additional capacity to us other than a director and Vice-Chairman of the board
of directors we granted to Mr. Bugg various options. On July 20, 1999, we
granted to Mr. Bugg options to purchase 30,000 ordinary shares at $6.00 per
share, exercisable until May 1, 2002 for services provided for work on the U.S.
Filter project. There was no trading of the company's ordinary shares on July
20, 1999. The market price of the ordinary shares was $7.50 on July 21, 1999. On
May 1, 2000, we granted to Mr. Bugg options to purchase an additional 30,000
ordinary shares at $6.75 per share, which was the market price of the ordinary
shares on October 1, 1999. These options were for services provided for work on
the settlement agreement concerning the Ellesmere Britannia lawsuit. These
additional 30,000 options are exercisable until May 1, 2003. On December 10,
2001, we granted further options to Mr. Bugg to purchase 30,000 ordinary shares
at $11.17 per share. These were provided as payment of services in negotiating
the purchase of the Hyatt water production facilities on Grand Cayman, Cayman
Islands. The market price on December 10, 2001 was $11.17 per share. These
options are exercisable until December 9, 2004.

         The options granted to Mr. Bugg, Jr., in 1999 and 2000, as well as all
the employment agreements with Messrs. Frederick W. McTaggart, Ribbins, Parker,
and Gregory S. McTaggart, were approved by a majority of the disinterested
members of the board of directors and ratified by the shareholders at the Annual
General Meeting held in 2001. Mr. Bugg's 2001 options were approved by a
majority of the disinterested members of the board of directors and are to be
put to the shareholders for ratification in the Annual General Meeting to be
held in 2002. It is management's opinion that all agreements set forth in this
section were on terms no less favorable than could have been obtained from
unaffiliated parties.



                                       88
<PAGE>



                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K

(a)  1.  Financial Statements

         The financial statements found in ITEM 8. FINANCIAL STATEMENTS AND
         SUPPLEMENTARY DATA for the year ended December 31, 2001 is incorporated
         herein by reference.

     2.  Financial Statement Schedules

         None

     3.  EXHIBITS

         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         3.1         Amended and Restated Memorandum of Association of
                     Consolidated Water Co. Ltd., dated December 4, 1998
                     (incorporated by reference to the exhibit filed as part of
                     our Form 20-F for the fiscal year ended December 31, 1998,
                     Commission File No. 0-25248).

         3.2         Amended and Restated Articles of Association of
                     Consolidated Water Co. Ltd., dated December 4, 1998
                     (incorporated by reference to the exhibit filed as part of
                     our Form 20-F for the fiscal year ended December 31, 1998,
                     Commission File No. 0-25248).

         10.1        License Agreement, dated July 11, 1990, between Cayman
                     Water Company Limited and the Government of the Cayman
                     Islands (incorporated herein by reference to the exhibit
                     filed as a part of our Form 20-F dated December 7, 1994,
                     Commission File No. 0-25248).

         10.2        First Amendment to License Agreement, dated September 18,
                     1990, between Cayman Water Company Limited and the
                     Government of the Cayman Islands. (incorporated herein by
                     reference to the exhibit filed as a part of our Form 20-F
                     dated December 7, 1994, Commission File No. 0-25248).

         10.3        Second Amendment to License Agreement, dated February 14,
                     1991, between Cayman Water Company Limited and the
                     Government of the Cayman Islands. (incorporated herein by
                     reference to the exhibit filed as a part of our Form 20-F
                     dated December 7, 1994, Commission File No. 0-25248).

         10.4        An Amendment to a License to Produce Potable Water, dated
                     August 15, 2001, between Consolidated Water Co. Ltd. by The
                     Government of The Cayman Islands.



                                       89
<PAGE>



         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         10.5        License Agreement, dated October 26, 1992, between Cayman
                     Island Government-Portfolio of Communications, Works and
                     Agriculture and Cayman Water Company Limited for the supply
                     of non-potable water to SafeHaven Ltd. (incorporated herein
                     by reference to the exhibit filed as a part of our Form
                     20-F dated December 7, 1994, Commission File No. 0-25248).

         10.6        Amendment to License Agreement, dated November 12, 1992,
                     between Cayman Island Government -- Portfolio of
                     Communications, Works and Agriculture and Cayman Water
                     Company Limited for the supply of non-potable water to
                     SafeHaven Ltd. (incorporated herein by reference to the
                     exhibit filed as a part of our Form 20-F dated December 7,
                     1994, Commission File No. 0-25248).

         10.7        Service Agreement, dated October 27, 1992, between Cayman
                     Water Company Limited and SafeHaven Ltd. (incorporated
                     herein by reference to the exhibit filed as a part of our
                     Form 20-F dated December 7, 1994, Commission File No.
                     0-25248).

         10.8        Amendment to Service Agreement, dated November 25, 1992,
                     between Cayman Water Company Limited and SafeHaven Ltd.
                     (incorporated herein by reference to the exhibit filed as a
                     part of our Form 20-F dated December 7, 1994, Commission
                     File No. 0-25248).

         10.9        Amendment to Service Agreement, dated September 4, 1995,
                     between Cayman Water Company Limited and SafeHaven Ltd.
                     (incorporated herein by reference to the exhibit filed as a
                     part of our Registration Statement on Form F-1 dated March
                     26, 1996, Commission File No. 333-00038).

         10.10       Water Purchase Agreement #2, dated October 14, 1994,
                     between Cayman Water Company Limited and Ocean Conversion
                     (Cayman) Limited. (incorporated herein by reference to the
                     exhibit filed as a part of our Form 20-F dated December 7,
                     1994, Commission File No. 0-25248).

         10.11       Water Purchase Agreement #3, dated October 21, 1994,
                     between Cayman Water Company Limited and Ocean Conversion
                     (Cayman) Limited. (incorporated herein by reference to the
                     exhibit filed as a part of our Form 20-F dated December 7,
                     1994, Commission File No. 0-25248).

         10.12       Water Purchase Agreement #3 (Revision #1), dated January
                     10, 1995, between Cayman Water Company Limited and Ocean
                     Conversion (Cayman) Limited. (incorporated herein by
                     reference to the exhibit filed as a part of our Form 10-K
                     dated March 30, 2001, Commission File No. 0-25248).

         10.13       Water Purchase Agreement #3 (Revision #2), dated December
                     29, 2000, between Consolidated Water Co. Ltd. and Ocean
                     Conversion (Cayman) Limited. (incorporated herein by
                     reference to the exhibit filed as a part of our Form 10-K
                     dated March 30, 2001, Commission File No. 0-25248).

         10.14       Water Supply Agreement, dated December 18, 2000, between
                     Consolidated Water Co. Ltd. and South Bimini International
                     Ltd. (incorporated herein by reference to the exhibit filed
                     as a part of our Form 10-K dated March 30, 2001, Commission
                     File No. 0-25248).


                                       90
<PAGE>
         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         10.15       Employment Agreement, dated August 30, 2000, between
                     Consolidated Water Co. Ltd. and Peter D. Ribbins.
                     (incorporated herein by reference to the exhibit filed as a
                     part of our Form 10-K dated March 30, 2001, Commission File
                     No. 0-25248).

         10.16       Engagement Agreement, dated December 30, 1998 between
                     Consolidated Water Co. Ltd. and Jeffrey Parker
                     (incorporated herein by reference to the exhibit filed as
                     part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).

         10.17       Amendment of Engagement Agreement, dated October 26, 1999,
                     between Consolidated Water Co. Ltd. and Jeffrey Parker
                     (incorporated herein by reference to the exhibit filed as
                     part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).

         10.18       Second Amendment of Engagement Agreement, dated March 21,
                     2000, between Consolidated Water Co. Ltd. and Jeffrey
                     Parker (incorporated herein by reference to the exhibit
                     filed as part of our Registration Statement on Form F-2
                     dated May 17, 2000, Commission File No. 333-35356).

         10.19       Employment Contract, dated July 12, 2000, between
                     Consolidated Water Co. Ltd. and Frederick W. McTaggart.
                     (incorporated herein by reference to the exhibit filed as a
                     part of our Form 10-K dated March 30, 2001, Commission File
                     No. 0-25248).

         10.20       Employment Contract, dated August 19, 1998, between Cayman
                     Water Company Limited and Gregory Scott McTaggart
                     (incorporated herein by reference to the exhibit filed as
                     part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).


         10.21       First Amendment to Employment Contract, dated April 17,
                     2000, between Consolidated Water Co. Ltd. and Gregory Scott
                     McTaggart (incorporated herein by reference to the exhibit
                     filed as part of our Registration Statement on Form F-2
                     dated May 17, 2000, Commission File No. 333-35356).

         10.22       Letter Agreement, dated August 2, 1999, between
                     Consolidated Water Co. Ltd. and J. Bruce Bugg (incorporated
                     herein by reference to the exhibit filed as part of our
                     Registration Statement on Form F-2 dated May 17, 2000,
                     Commission File No. 333-35356).

         10.23       Letter Agreement, dated January 19, 2002, between
                     Consolidated Water Co. Ltd. and J. Bruce Bugg.

         10.24       Specimen Service Agreement, between Cayman Water Company
                     Limited and consumers (incorporated herein by reference to
                     the exhibit filed as part of our Registration Statement on
                     Form F-1 dated March 26, 1996).

         10.25       Summary Share Grant Plan for Directors (incorporated herein
                     by reference to the exhibit filed as part of our
                     Registration Statement on Form F-2 dated May 17, 2000,
                     Commission File No. 333-35356).




                                       91
<PAGE>
         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         10.26       Employee Share Option Plan.

         10.27       Agreement, dated March 31, 1998, among Argyle/Cay-Water
                     Limited, J. Bruce Bugg and Cayman Water Company Limited
                     (incorporated herein by reference to the exhibit filed as
                     part of our Form 20-F for the fiscal year ended December
                     31, 1997, Commission File No. 0-25248).

         10.28       Option Deed, dated August 6, 1997, between Cayman Water
                     Company Limited and American Stock Transfer & Trust Company
                     (incorporated herein by reference to the exhibit filed on
                     our Form 6-K, dated August 7, 1997, Commission File No.
                     0-25248).

         10.29       Stock Option Agreement, dated December 15, 1998, between
                     Consolidated Water Co. Ltd. and R. Jerry Falkner
                     (incorporated herein by reference to the exhibit filed as
                     part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).

         10.30       Purchase and Sale Agreement, dated December 10, 2001,
                     between Consolidated Water Co. Ltd., Cayman Hotel and Golf
                     Inc., Ellesmere Britannia Limited and Hyatt Britannia
                     Corporation Ltd.

         10.31       Agreement, dated February 1, 2002, between Consolidated
                     Water Co. Ltd. and Cayman Hotel and Golf Inc.

         10.32       Consulting Agreement, dated November 17, 1998, between
                     Cayman Water Company Limited and R.J. Falkner & Company,
                     Inc. (incorporated herein by reference to the exhibit filed
                     as part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).

         10.33       Agreement, dated July 24, 1995, between Cayman Water
                     Company Limited and Galleon Beach Resort Limited
                     (incorporated herein by reference to the exhibit filed as
                     part of our Registration Statement on Form F-2 dated May
                     17, 2000, Commission File No. 333-35356).

         10.34       Agreement, dated February 9, 1994, between Cayman Water
                     Company Limited and Widar Ltd. (incorporated herein by
                     reference to the exhibit filed as part of our Registration
                     Statement on Form F-2 dated May 17, 2000, Commission File
                     No. 333-35356).

         10.35       Finance Contract, dated October 3, 1991, between European
                     Investment Bank and Cayman Water Company Limited
                     (incorporated herein by reference to the exhibit filed as
                     part of our Form 20-F, dated December 7, 1994, Commission
                     File No. 0-25248).

         10.36       Debenture, dated June 1, 1979, among Cayman Water Company
                     Limited, The Royal Bank of Canada, Philip Lustig and Cayman
                     Public Utilities, Ltd. (incorporated herein by reference to
                     the exhibit filed as part of Post-Effective Amendment No. 1
                     to our Registration Statement on Form F-2 dated May 22,
                     2000).




                                       92
<PAGE>
         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         10.37       Deed, dated April 30, 1981, between Cayman Water Company
                     Limited and The Royal Bank of Canada (incorporated herein
                     by reference to the exhibit filed as part of Post-Effective
                     Amendment No. 1 to our Registration Statement on Form F-2
                     dated May 22, 2000).

         10.38       Second Deed, dated March 10, 1983, between Cayman Water
                     Company Limited and The Royal Bank of Canada (incorporated
                     herein by reference to the exhibit filed as part of
                     Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.39       Third Deed, dated December 6, 1984, between Cayman Water
                     Company Limited and The Royal Bank of Canada (incorporated
                     herein by reference to the exhibit filed as part of
                     Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.40       Fourth Deed, dated August 31, 1989, between Cayman Water
                     Company Limited and The Royal Bank of Canada (incorporated
                     herein by reference to the exhibit filed as part of
                     Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.41       Fifth Deed, dated June 16, 1992, between Cayman Water
                     Company Limited and The Royal Bank of Canada (incorporated
                     herein by reference to the exhibit filed as part of
                     Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.42       Variation of Debenture, dated October 11, 1999, between
                     Consolidated Water Co. Ltd. and The Royal Bank of Canada
                     (incorporated herein by reference to the exhibit filed as
                     part of Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.43       Collateral Charge, dated June 1, 1979, between Cayman Water
                     Company Limited and The Royal Bank of Canada (incorporated
                     herein by reference to the exhibit filed as part of
                     Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.44       Deed, dated June 1, 1979, between Cayman Water Company
                     Limited, The Royal Bank of Canada and Philip Lustig
                     (incorporated herein by reference to the exhibit filed as
                     part of Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.45       Variation of Charge, dated April 30, 1981, between Cayman
                     Water Company Limited and The Royal Bank of Canada
                     (incorporated herein by reference to the exhibit filed as
                     part of Post-Effective Amendment No. 1 to our Registration
                     Statement on Form F-2 dated May 22, 2000).

         10.46       Collateral Charge to a Variation of Debenture, dated
                     October 11, 1999, between Consolidated Water Co. Ltd. and
                     Royal Bank of Canada (incorporated herein by reference to
                     the exhibit filed as part of Post-Effective Amendment No. 1
                     to our Registration Statement on Form F-2 dated May 22,
                     2000).




                                       93
<PAGE>
         EXHIBIT
         NUMBER      EXHIBIT DESCRIPTION
         ------      -------------------

         10.47       Second Debenture of Cayman Water Company Limited, dated
                     July 16, 1992, together with Second Collateral Charge dated
                     July 23, 1992 (incorporated by reference to the exhibit
                     filed as part of our Form 20-F, dated December 7, 1994,
                     Commission file No. 0-25248).

         10.48       Credit Facility Agreement, dated April 25, 2001 between
                     Consolidated Water Co. Ltd. and the Royal Bank of Canada.

         10.49       Variation of Debenture, dated February 22, 2002 between
                     Consolidated Water Co. Ltd. and the Royal Bank of Canada.

         10.50       Second Collateral Change to a Variation of Debenture, dated
                     February 22, 2002 between Consolidated Water Co. Ltd. and
                     the Royal Bank of Canada.

         10.51       Lease of Part, dated October 13, 2000, between Consolidated
                     Water Co. Ltd. and Colmar LTD. (incorporated herein by
                     reference to the exhibit filed as a part of our Form 10-K
                     dated March 30, 2001, Commission File No. 0-25248).

         10.52       Lease, dated December 10, 2001, between Cayman Hotel and
                     Golf Inc. and Consolidated Water Co. Ltd.

         10.53       Lease, dated April 27, 1993, between Government of Belize
                     and Belize Water Ltd.

         21          Subsidiaries of the Registrant.

         23          Consent of PricewaterhouseCoopers.


(b)      Reports on Form 8-K

         None



                                       94
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     CONSOLIDATED WATER CO. LTD.


                                     By: /s/  Jeffrey M. Parker
                                     ------------------------------------------
                                     Jeffrey M. Parker
                                     Chairman of the board of directors and
                                     Chief Executive Officer

Dated: March 27, 2002

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

         SIGNATURE                               TITLE                                 DATE
         ---------                               -----                                 ----
<S>                                              <C>                                   <C>
By:      /s/  Jeffrey M. Parker
         ----------------------------------      Chairman of the board of directors    March 27, 2002
         Jeffrey M. Parker                       and Chief Executive Officer
                                                 (Principal Executive Officer)

By:      /s/  Frederick W. McTaggart
         ----------------------------------      Director, President, Chief            March 27, 2002
         Frederick W. McTaggart                  Operating Officer and Chief
                                                 Financial Officer (Principal
                                                 Financial and Accounting Officer)

By:      /s/  Peter D. Ribbins
         ----------------------------------      Director - Special Projects           March 27, 2002
         Peter D. Ribbins


By:      /s/  J. Bruce Bugg, Jr.
         ----------------------------------      Director and Vice Chairman of the     March 27, 2002
         J. Bruce Bugg, Jr.                      board of directors

By:      /s/  Brian E. Butler
         ----------------------------------      Director                              March 27, 2002
         Brian E. Butler

</TABLE>

                                       95
<PAGE>
<TABLE>
<CAPTION>

         SIGNATURE                               TITLE                                 DATE
         ---------                               -----                                 ----
<S>                                              <C>                                   <C>
By:      /s/  Steven A. Carr
         ----------------------------------      Director                              March 27, 2002
         Steven A. Carr


By:      /s/  Richard L. Finlay
         ----------------------------------      Director                              March 27, 2002
         Richard L. Finlay


By:      /s/  Clarence B. Flowers, Jr.
         ----------------------------------      Director                              March 27, 2002
         Clarence B. Flowers, Jr.


By:      /s/  Wilmer Pergande
         ----------------------------------      Director                              March 27, 2002
         Wilmer Pergande


By:      /s/  Raymond Whittaker
         ----------------------------------      Director                              March 27, 2002
         Raymond Whittaker


By:      /s/  Carson K. Ebanks
         ----------------------------------      Director                              March 27, 2002
         Carson K. Ebanks

</TABLE>





                                       96
<PAGE>




                           CONSOLIDATED WATER CO. LTD.

                        INDEX TO EXHIBITS FILED WITH 10-K

10.4     An Amendment to a License to Produce Potable Water, dated August 15,
         2001, between Consolidated Water Co. Ltd. by The Government of The
         Cayman Islands.

10.23    Letter Agreement, dated January 19, 2002, between Consolidated Water
         Co. Ltd. and J. Bruce Bugg.

10.26    Employee Share Option Plan.

10.30    Purchase and Sale Agreement, dated December10, 2001, between
         Consolidated Water Co. Ltd., Cayman Hotel and Golf Inc., Ellesmere
         Britannia Limited and Hyatt Britannia Corporation Ltd.

10.31    Agreement, dated February 1, 2002, between Consolidated Water Co. Ltd.
         and Cayman Hotel and Golf Inc.

10.48    Credit Facility Agreement, dated April 25, 2001 between Consolidated
         Water Co. Ltd. and the Royal Bank of Canada.

10.49    Variation of Debenture, dated February 22, 2002 between Consolidated
         Water Co. Ltd. and the Royal Bank of Canada.

10.50    Second Collateral Change to a Variation of Debenture, dated February
         22, 2002 between Consolidated Water Co. Ltd. and the Royal Bank of
         Canada.

10.52    Lease, dated December 10, 2001, between Cayman Hotel and Golf Inc. and
         Consolidated Water Co. Ltd.

10.53    Lease, dated April 27, 1993, between Government of Belize and Belize
         Water Ltd.

21       Subsidiaries of the Registrant.

23       Consent of PricewaterhouseCoopers.





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>3
<FILENAME>g75127ex10-4.txt
<DESCRIPTION>AMENDMENT TO LICENSE TO PRODUCE PORTABLE WATER
<TEXT>
<PAGE>
                                                                    Exhibit 10.4


        An amendment To A License To Produce Potable Water From Seawater

                                   Provided to

                           Consolidated Water Co. Ltd.

                     (Formerly Cayman Water Company Limited)

                                       by

                      The Government of The Cayman Islands

            The Water (Production and Supply) Law (Law No 15 of 1979)
                                 (1996 Revision)

IT IS AGREED AND DECLARED by and between the parties hereto that Schedules Three
and Five of the License, signed by the parties on eleventh day of July 1990, are
deleted with effect from the date hereof and replaced by the Schedule Three and
Schedule five hereto attached.

                             Dated 15th August 2001

IN WITNESS WHEREOF this amendment has been made on the date above written.

FOR THE GOVERNMENT OF THE CAYMAN ISLANDS

THE PUBLIC SEAL OF THE GOVERNMENT
Of the Cayman Islands was affixed in the presence of: -

      /s/ PETER SMITH
- -------------------------------------------------------
HIS EXCELLENCY THE GOVERNOR PETER SMITH C.B.E.



FOR CONSOLIDATED WATER CO. LTD.
(Formerly CAYMAN WATER COMPANY LIMITED)

      /s/ JEFFREY M. PARKER
- -------------------------------------------------------
Mr. Jeffrey M. Parker, Chairman



      /s/ FREDERICK W. MCTAGGART
- -------------------------------------------------------
Mr. Frederick W. McTaggart, President and COO


FOR THE WATER AUTHORITY- CAYMAN ISLANDS

     /s/ BRAINARD WALTER
- -------------------------------------------------------
Mr. Brainard Watler, Chairman

    /s/ OTTO WALTER
- -------------------------------------------------------
Mr. Otto Watler, Director


<PAGE>
                                 SCHEDULE THREE

                                     PRICES

      In accordance with clauses 6.1, 6.4 and 6.5 the following prices shall
      apply: -


1.    BASE PRICE OF WATER

      The Base Price of Water sold to any customer by means of the Company's
      pressurized pipeline in the Revoked License Area shall be as follows: -

      Residential consumer first 3,000 CI$ 17.45 per 1,000 gallons Gallons
      supplied in any one month Residential consumer any amount CI$ 18.32 per
      1,000 gallons over 3,000 Gallons supplied in any one-month Commercial
      consumer CI$ 18.32 per 1,000 gallons Public Authority consumer CI$ 17.45
      per 1,000 gallons

      The Base Price of Water sold to the category of customer as described
      below in the Additional Area shall be as follows: -

      Residential consumer first 3,000 CI$ 15.27 per 1,000 gallons Gallons
      supplied in any one month Residential consumer any amount CI$ 18.32 per
      1,000 gallons over 3,000 gallons supplied in any one month Commercial
      consumer CI$ 18.32 per 1,000 gallons Public Authority consumer CI$ 16.57
      per 1,000 gallons

2.    WATER METER RENTAL

      A monthly meter rental fee shall be levied at the following rates for the
      various sizes of meter: -

              20 mm                                           CI$ 3.50
              25mm                                            CI$ 5.00
              38mm                                            CI$ 7.50
              50mm                                            CI$ 10.00
              75mm                                            CI$ 15.00
              100mm                                           CI$ 25.00
              150mm                                           CI$ 40.00

3.    FEE FOR RECONNECTION OF SUPPLY

      A Water supply that has been disconnected for non-payment or by request of
      the customer shall be reconnected on payment of the following fees which
      fee shall depend on the size of the meter: -

              20 mm                                           CI$ 50.00
              25mm                                            CI$ 75.00
              38mm                                            CI$ 110.00
              50mm                                            CI$ 150.00
              75mm                                            CI$ 225.00
              100mm                                           CI$ 300.00
              150mm                                           CI$ 350.00

4.    FEES FOR FIRE HYDRANTS

      CI$ 20.00 per hydrant per month











<PAGE>

                                  SCHEDULE FIVE

                                    INFLATION


      In accordance with clause 6.3, the Base Rate shall be annually adjusted to
      take into account the effects of inflation, by subtracting there from an
      amount equal to fifty five percentum thereof and adding to the resulting
      sum an amount equal to: -

                              (20BP X CI CURRENT) + (35BP X US CURRENT)
                              -------------------   -------------------
                               (100      CI BASE)    (100    US BASE)

      Where: -

            BP is the Base Price

            CI CURRENT and CI BASE are the Cayman Islands Consumer Price Indexes
            at September 30 immediately preceding the Adjustment Date and at
            September 30,1999 respectively;

            USCURRENT and US BASE are the United States Producer Price Indexes
            at September 30 immediately preceding the Adjustment Date and at
            September 30, 1999 respectively

      PROVIDED that in the event that the Cayman Islands Government fails to
      publish a Consumer Price Index at September 30, then the United States
      Producer Price Index shall be used.

      For the avoidance of doubt the intent of the above formula is to provide
      that twenty percentum of the Base Price is adjusted to accommodate any
      changes in the Cayman Islands Consumer Price Index, thirty five percentum
      of the Base Price is adjusted to accommodate any changes in the United
      States Producer Price Index and forty five percentum of the Base Price
      remains constant.

      If at any time the parties hereto agree that the formula for calculating
      the inflation is no longer appropriate to the operation of the Company,
      the formula shall be changed by an amendment to the License.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>4
<FILENAME>g75127ex10-23.txt
<DESCRIPTION>LETTER AGREEMENT
<TEXT>
<PAGE>
                                                                   Exhibit 10.23


January 19, 2002

VIA FAX: 1 210 224 6491

J. Bruce Bugg Jr.,
Vice Chairman,
Consolidated Water Co. Ltd.


Dear Bruce,

Thank you for your fax of January 18, 2002.

I am pleased to confirm that, in accordance with the resolution of the Board on
May 22, 2001, on December 10, 2001, you were granted an option to purchase
30,000 Ordinary Shares of the Company at US$ 11.17 per share. The option may be
exercised by you at any time up to 4:30 p.m. Cayman time on December 10, 2004.

I would add that I have placed an item on the Agenda of the February 1, 2002
Board Meeting in order that these terms may be noted in the Minutes thereof.

We appreciate your continuing efforts on behalf of the Company.

Yours sincerely,
CONSOLIDATED WATER CO. LTD.


/s/ Jeffrey M. Parker

Jeffrey M. Parker
Chairman & C.E.O.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>5
<FILENAME>g75127ex10-26.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION PLAN
<TEXT>
<PAGE>
                                                                   Exhibit 10.26
CONSOLIDATED WATER CO. LTD.
RESOULTION RE EMPLOYEE SHARE OPTIONS

WHEREAS: -

      (1)   over the past several years, miscalculations were made by the
            Company in the number of shares due to employees of the Company free
            of charge and the number of shares which they were entitled to
            purchase at a beneficial price under the Company's Share Incentive
            Plan ("the Plan"), resulting in over-allocations to certain
            employees;

      (2)   on that miscalculation being corrected, certain of the employees
            expressed dissatisfaction with the reduced number of shares to which
            they became entitled to receive free of charge and to purchase under
            the Plan; and

      (2)   the Directors and the relevant employees are prepared to compromise
            their differences by the grant to those employees of the options set
            out below

BE IT RESOLVED:

"THAT the Company grant to each of the following employees (which expression
includes each employee's personal representatives):

                  Abel Castillo
                  Billy Banker
                  Rayburn Conolly
                  Ivan Tabora
                  Maggie Julier
                  Helverth Rodriquez
                  Chet Ritch
                  Louis Wood
                  Elizabeth Triana
                  Dave Hooker

an option to purchase the Number of Shares on the following terms and
conditions:

      1.    Options are granted in 2001 and in each calendar year thereafter so
            long as the employee is, at the Grant Date, a Participant (as
            defined therein) in the Plan.

      2.    The price at which the option may be exercised will be the closing
            market price of the Company's Ordinary Shares on the Grant Date (or
            on the next Trading Day if the Grant Date is not a Trading Day)

      3.    An option may be exercised by written notice to the company,
            accompanied by a remittance for the full amount, at any time during
            the period commencing on the earliest of the following dates:

            a.)   the date of death of the employee, or
            b.)   the date on which the employment of the employee is terminated
                  as a result of permanent disability, or
            c.)   the date on which the employee retires having reached the age
                  of 65 years, or,



<PAGE>

            d.)   the fourth anniversary of the Grant Date

            and ending at 5 p.m. on the thirtieth day after the fourth
            anniversary of the Grant Date or, in the case of the death of the
            employee only, 5 p.m. on the date which is 180 days after the date
            of his or her death, whichever is later.

For the purposes of this resolution, the following terms have the following
meanings: -

      "GRANT DATE" means in each year 40 days after the date of the Company's
      Annual Shareholders' Meeting.

      " NUMBER OF SHARES" means, in respect of each calendar year and in
      relation to each employee, the number of Ordinary shares in the Company,
      which is five times:

      (a)   that number of Redeemable Preference Shares which that employee
            receives without payment, plus

      (b)   that number of Redeemable Preference Shares which that employee
            purchases pursuant to the Plan in that calendar year.

      "PERMANENT DISABILITY" means the inability due to injuries or illness to
      perform the duties for which the employee was employed to the Company
      which inability a physician licensed to practice in the Cayman Islands and
      nominated by the Company advises in his opinion will be permanent.

      " TRADING DAY," means a day on which the Company's shares are traded on
      the NASDAQ National Market.





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>6
<FILENAME>g75127ex10-30.txt
<DESCRIPTION>PURCHASE & SALE AGREEMENT
<TEXT>
<PAGE>
AGREEMENT A-D/BA CWC ELLESMERE WATER PLANT

                                                                   Exhibit 10.30

                           PURCHASE AND SALE AGREEMENT

                           PREPARED BY MYERS & ALBERGA
                                ATTORNEYS-AT-LAW


THIS AGREEMENT is made BETWEEN THE SELLER, THE BUYER, ELLESMERE AND HYATT
BRITANNIA.

1.    In this Agreement and the First Schedule, unless inconsistent with the
      context or subject matter or circumstances:-

      (1)   "AFFILIATE" means with respect to any person, any other person
            directly or indirectly controlling, controlled by or under common
            control with that person. For purposes of this definition, "control"
            (including with correlative meanings, the terms "controlling",
            "controlled by" and "under common control with") as used with
            respect to any person means the possession, directly or indirectly,
            of the power to direct or cause the direction of the management and
            policies of that person, by any means whatever, including without
            limitation through the ownership of voting shares or securities, or
            by contract;

      (2)   "THE BRITANNIA DEVELOPMENT" means the land on West Bay Road, Grand
            Cayman on which are situated the Plant, the Hotel, the Britannia
            Residences and the Undeveloped Lot, comprised in the Land Registers
            referred to in Part II of the Second Schedule;

      (3)   "THE BRITANNIA RESIDENCES" means the houses, villas and condominiums
            in the Britannia Development Phases I (53 strata lots) and II (72
            strata lots and 2 houses), Britannia Estates (25 lots) and Kings
            Court (42 strata lots) comprised in the Land Registers referred to
            in Section A of Part II of the Second Schedule;

      (4)   "THE BUYER" means CONSOLIDATED WATER CO. LTD. a Cayman Islands
            company of P.O. Box 1114, George Town, Grand Cayman B.W.I.
                                        Tel: 945-4277
                                        Fax: 945-4191

            and includes the Buyer's nominees, successors and assigns;

      (5)   "COMPLETION DATE" means the first day of the next succeeding
            calendar month after the satisfaction of the condition in Clause 14
            (unless this Agreement is earlier terminated in accordance with that
            Clause);

      (6)   "THE CONCESSION" means the concession granted to the Buyer under the
            Water (Production & Supply) Law, as amended from time to time.

      (7)   "THE DATE OF THIS AGREEMENT" is the 10TH day of DECEMBER, 2001;


                                       1
<PAGE>


      (8)   "DEPOSIT" means the sum of US$50,000.00 paid to the Seller's
            Attorneys-at-Law as stakeholder as a deposit under this Agreement;

      (9)   "ELLESMERE" means Ellesmere Britannia Limited of P.O. Box 1994 GT,
            Grand Cayman B.W.I.;

      (10)  "THE HOTEL" means the hotel situated on part of the Britannia
            Development presently known as the Hyatt Regency, the Britannia golf
            course, the Hyatt beach club and Hemingway's restaurant and the Rum
            Point restaurant comprised in the Land Registers referred to in
            Section B of Part II of the Second Schedule;

      (11)  "HYATT BRITANNIA" means Hyatt Britannia Corporation Ltd. of P.O. Box
            1698 GT, Grand Cayman B.W.I.;

      (12)  "THE LEASE" means the lease from the Seller to the Buyer of the
            Property in the form of the lease in the Fourth Schedule;

      (13)  "THE MAIN METER" means the water meter edged purple on the Plan
            metering the supply of water to that part of the Britannia
            Development known as "Britannia Villas";

      (14)  "THE PLAN" means the plan attached to this Agreement marked
            `Property Plan' and initialled by the parties for the purposes of
            identification

      (15)  "THE PLANT" means the machinery, equipment and personal property
            described and listed in Part I of the Second Schedule;

      (16)  "THE PRICE" means the total amount payable for the Plant, being One
            Million Five Hundred Thousand United States Dollars
            (US$1,500,000.00);

      (17)  "THE PROPERTY" means the land situated in Grand Cayman being that
            part of the land registered at Block 12D Parcel 79REM1 in the West
            Bay Beach South Registration Section of Grand Cayman, Cayman Islands
            (including that part of the building containing the Plant, an office
            and bathroom erected on the Property and indicated on the Plan) as
            appears outlined in red on the Plan;

      (18)  "THE PROPERTY METER" means the water meter at the boundary of the
            Property to which the Water Pipe is connected, the location of which
            is marked in pink on the Plan;

      (19)  "THE SELLER" means CAYMAN HOTEL & GOLF INC., a Canada corporation of
            P.O. Box 1994 GT, Grand Cayman B.W.I.;
                                        Tel: (345)949-7440
                                        Fax: (345)949-8032

            and includes the Seller's successors in title and transferees.

      (20)  "THE SELLER'S ATTORNEYS AT LAW" means Messrs. Ritch & Conolly, P.O.
            Box 1994 GT, Grand Cayman B.W.I.;



                                       2
<PAGE>

      (21)  "THE STRATA CORPORATIONS" means The Proprietors, Strata Plan No. 79,
            The Proprietors, Strata Plan No. 147 and The Proprietors, Strata
            Plan No. 215;

      (22)  "THE UNDEVELOPED LOT" means the land referred to in Section C of
            Part II of the Second Schedule;

      (23)  "THE WATER PIPE" means the water pipe coloured brown on the Plan
            running from the Property Meter to the Main Meter;

      (24)  the Schedules form part of this Agreement;

      (25)  words of one gender include any other gender;

      (26)  singular words include the plural and vice versa;

      (27)  a commitment by more than one person is joint and separate; and

      (28)  the clause headings are included for convenience only and have no
            legal effect.

2.    The Seller agrees to sell and the Buyer agrees to buy the Plant for the
      Price and on the terms and conditions set out in the First Schedule.

                               THE FIRST SCHEDULE

1.    PAYMENT

      The Price must be paid to the Seller's Attorneys-at-Law on behalf of the
      Seller as follows:-

      (1)   on execution of this Agreement the Deposit, to be held as
            stakeholder until completion or earlier termination of this
            Agreement.

      (2)   at completion, the balance of the Price.

2.    COMPLETION

      (1)   Completion must take place on or before the Completion Date.

      (2)   Unless the Buyer otherwise agrees, completion must take place at the
            offices of Myers & Alberga, One Regis Place, 90 Fort Street, George
            Town, Grand Cayman, Cayman Islands B.W.I., who will have carriage of
            sale.

      (3)   On the execution of this Agreement, the parties must execute the
            Lease and all necessary documents to enable its registration and
            deliver it in triplicate to the Buyer's Attorney-at-Law for stamping
            and registration.



                                       3
<PAGE>

      (4)   At completion, in exchange for payment of the balance of the Price
            and all other money (if any) payable to the Seller under this
            Agreement

            (a)   the Seller must deliver to the Buyer:-

                  (i)   any documents necessary to vest title to the Plant in
                        the Buyer under the terms of this Agreement; and

                  (ii)  water supply agreements in the forms of the Fifth, Sixth
                        and Seventh Schedules executed by the Strata
                        Corporations (the Fifth Schedule), Britannia Estates
                        Home Owners Association Ltd. (the Sixth Schedule) and
                        the other Proprietors (the Seventh Schedule) on the date
                        of this Agreement of the residential lots in Britannia
                        Estates more particularly described in the Section A of
                        Part II of the Schedule for the supply of water by the
                        Buyer to any part of the Britannia Residences; and

            (b)   the parties must complete by filling in the blank spaces and
                  execute an agreement for the Buyer's supply of potable water
                  in the form of the agreement in the Third Schedule.

3.    POSSESSION AND USE OF WATER PIPE

      (1)   The Seller must give vacant possession of the Property (including
            for the avoidance of doubt those items of the Plant as are affixed
            to it, if any) and free possession (by delivery) of those items of
            the Plant as are not affixed to the Property to the Buyer at
            completion.

      (2)   The Seller acknowledges that after completion and for the duration
            of the Lease the Buyer intends to use the Water Pipe for
            distribution of potable water to the owners, tenants, licensees and
            occupiers of the whole of the Britannia Development (other than the
            Property). For this purpose, the Seller:-

            (a)   grants to the Buyer, without prejudice to the Buyer's rights
                  as a concessionaire (as defined in the Water (Production and
                  Supply) Law (1996 Revision)) of an area which includes the
                  Britannia Development or any part of it, for so long as it is
                  such a concessionaire under that Law or until the termination
                  of the Lease (whichever is earlier), but subject to temporary
                  interruption for repair and maintenance, the right to use the
                  Water Pipe for the supply of potable water to all parts of the
                  Britannia Development; and

            (b)   agrees that:-

                  (i)   it will be responsible for the repair and maintenance of
                        the Water Pipe and will keep it in all respects sanitary
                        and free from pollution and any toxic, noxious or other
                        substances prejudicial to health so that the Buyer's
                        potable water passing through it will not be
                        contaminated so as to reduce the quality of the potable
                        water below that required by the Buyer's concession
                        referred to in Clause 3(2)(a);

                  (ii)  if it fails within twenty-four (24) hours of receiving
                        notice from the Buyer to carry out at the Seller's cost
                        any necessary repairs or maintenance of the Water Pipe,
                        then the Buyer may carry out any repairs or maintenance
                        to the Water Pipe in respect of which it has given
                        notice to the Seller and may enter such parts of the
                        Hotel or the


                                       4
<PAGE>

                        Undeveloped Lot as are necessary in order to carry out
                        those repairs or that maintenance, causing as little
                        inconvenience as possible and making good any
                        unnecessary damage caused without delay;

                  (iii) it will not connect anything to the Water Pipe which
                        might either on connection or use cause the water
                        pressure in the Water Pipe to increase above 62 pounds
                        per square inch gauge or to reduce below 35 pounds per
                        square inch gauge and to indemnify the Buyer against all
                        loss, damage or expense (including consequential loss
                        and the full amount of legal expenses and damages paid
                        to third parties to whom the Buyer becomes liable)
                        caused from the Seller's breach of this clause or from
                        the use of the fire pump presently connected to the
                        Water Pipe with the Buyer's knowledge and consent.

                  (iv)  for so long as it remains the owner, legal or
                        beneficial, of any interest in any part of the land
                        under which the Water Pipe runs until the termination of
                        the Lease it will not remove or in any manner interfere
                        with, damage or destroy any part of the Water Pipe or
                        additions to or replacements of it or any part of it
                        made by either the Buyer or the Seller; and

                  (v)   it will not dispose of any legal or beneficial interest
                        in any part of the Hotel (other than the Rum Point
                        restaurant and the Property) or the Undeveloped Lot
                        without obtaining from the transferee of that interest
                        an enforceable covenant by that transferee on behalf of
                        itself and its successors in favour of the Buyer to the
                        same effect as those contained in this subclause (2),
                        including a covenant to obtain the same covenant from
                        any subsequent transferee of that or any lesser
                        interest.

      (3)   The provisions of sub-clause (2) will survive completion of this
            Agreement.

4.    TITLE TO PLANT

      (1)   The Seller warrants to the Buyer that the Plant belongs to him
            absolutely and that it will not at the time of delivery to the Buyer
            be subject to any hire purchase or credit sale agreement or any
            charge, mortgage, bill of sale or encumbrance of any kind. To the
            extent that the Seller is legally able to pass title to the Plant by
            delivery (it being agreed that the only impediment to the passing of
            unencumbered title to the Buyer is the possible fixation to the
            Property of certain items of the Plant), title will so pass on
            Completion. To the extent that the Seller is not legally able to
            pass title to the Plant by delivery for the reason above-mentioned,
            the Seller agrees that the Buyer may at any time prior to the end of
            the Lease detach those items of Plant affixed to the Property and on
            such detachment title will pass to the Buyer without any further act
            or deed.

      (2)   The provisions of sub-clause (1) will survive completion of this
            Agreement.

5.    RISK

      Despite any rule of law, equity or practice to the contrary, risk in the
      Plant will pass to the Buyer on completion.



                                       5
<PAGE>

6.    STATE OF PROPERTY AND PLANT

      (1)   The Plant being open for inspection by or on behalf of the Buyer
            before the Date of this Agreement the Buyer is deemed to buy it with
            full notice of its present state and condition in all respects and
            must accept it in that state and condition at the time of taking
            possession of it fair wear and tear excepted.

      (2)   The Seller warrants that neither as at completion nor at any
            previous time during which it or any Affiliate has had any
            beneficial interest in the Property, has any business activity been
            carried on on the Property which involves the use or handling of
            hazardous materials or waste or which has had to the Seller's
            knowledge any adverse effect on its property, equipment or business
            activities.

      (3)   The Buyer may at any time and from time to time make such
            investigations and tests of the soil of the Property as it deems
            necessary to satisfy itself that no part of the Property is polluted
            by hazardous materials or wastes. The costs of such tests and
            investigations must be borne by the Buyer. If any such pollution is
            found at any time (whether before or after completion) which is
            attributable to the Seller, Ellesmere or Hyatt Britannia, the Seller
            must at its expense immediately with all possible expedition conduct
            all environmental remedial activities which a commercially
            reasonable person would perform in similar circumstances on his own
            land to remedy the pollution. The Seller agrees not at any time
            during the subsistence of the Lease to pollute any of its land
            registered at Block 12D Parcel 79REM1 in the West Bay Beach South
            Registration Section of Grand Cayman in any way which might
            adversely affect the Property or the Plant or the Buyer's business
            carried on on the Property.

7.    SELLER'S RIGHT TO TERMINATE

      If the Buyer does not complete in accordance with Clause 2 of this
      Schedule, the Seller may, at any time after the Completion Date without
      prejudice to any other remedy which he may have, serve notice on the Buyer
      to pay the balance of the Price within fourteen (14) days after the date
      of service of that notice. If the Buyer does not pay the balance of the
      Price within those fourteen (14) days (in respect of which time will be of
      the essence) the Seller may, unless he chooses some other remedy,
      terminate this Agreement and keep the Deposit and all part payments (if
      any) up to an aggregate of ten percent (10%) of the Price as liquidated
      damages together with any interest that may have accrued or been earned on
      it. If he does so this Agreement will immediately end and neither party
      will have any further rights of action or claim of any nature against the
      other in respect of it.

8.    INTEREST ON LATE PAYMENTS

      In addition to any other remedies available to the Seller if the Buyer
      does not pay any sum payable under this Agreement on the due date the
      Seller may charge interest on the unpaid amount calculated from the due
      date until the date of payment at the rate of ten percent (10%) per annum
      calculated on a daily basis, and with monthly rests.

9.    STAMP DUTY AND OTHER FEES

      Each party must bear its own legal fees on this Agreement.



                                       6
<PAGE>

10.   PAYMENT BY CHEQUE

      If the Buyer or anyone on his behalf pays any money under this Agreement
      by cheque, payment is deemed to be received when that cheque has been
      cleared in the Cayman Islands and the funds are under the unconditional
      control of the Seller and the Buyer may not enforce any of his rights or
      remedies until that cheque has been so cleared.

11.   ENTIRE AGREEMENT

      (1)   This Agreement constitutes the entire agreement between the parties
            and may be varied only by agreement in writing.

      (2)   The Seller, the Buyer, Ellesmere and Hyatt Britannia agree that on
            the Completion Date the settlement agreements dated 20th April, 1999
            shall be terminated and be of no further force or effect.

12.   NOTICES

      Any notice or communication under or in connection with this Agreement
      must be in writing and must be delivered personally, or sent by registered
      post to the address of the party to be served stated in clause 1 or at
      such other address as either party notifies the other. Proof of posting or
      delivery will be deemed to be proof of receipt:-

      (1)   in the case of a notice or communication sent by registered post, on
            the fourth day after posting; and

      (2)   in the case of a notice or communication delivered, on the date of
            delivery.

13.   NO WAIVER OF TERMS

      Unless there is a written agreement to the contrary, no neglect, omission
      or forbearance on the Seller's part to take advantage of or enforce any
      right or remedy arising out of any breach or non-observance of any of the
      terms and conditions contained or implied in this Agreement will be deemed
      to be or operate as a general waiver of that term or condition or the
      right to enforce or take advantage of it in respect of any breach or
      non-observance of it either original or recurring.

14.   CONDITIONS PRECEDENT TO COMPLETION

      Completion of this Agreement is subject to:-

      (1)   the consent of the Seller's mortgagee Barclays Bank Plc to the
            transaction contemplated by this agreement including without
            limitation the sale of the Plant and the grant of the Lease;

      (2)   the Buyer's being satisfied that the Property is not polluted or
            that the environmental remedial activities performed by the Seller
            under Clause 6(3) have been or will be successful, it being
            understood that failure by the Buyer to make the investigations and
            tests referred to in Clause 6(3) by the Completion Date will be
            conclusive evidence for the purposes of this Clause that


                                       7
<PAGE>

            the Buyer is satisfied that the Property is not polluted but without
            prejudice to the provisions of Clause 6(3);

      (3)   the Seller's producing to the Buyer water supply agreements in the
            form of the Fifth, Sixth and Seventh Schedules executed by the
            Strata Corporations (the Fifth Schedule), Britannia Estates Home
            Owners Association Ltd. (the Sixth Schedule) and the other
            Proprietors (the Seventh Schedule) on the date of this Agreement of
            the residential lots in Britannia Estates more particularly
            described in the Section A of Part II of the Schedule, for the
            supply of water by the Buyer to any part of the Britannia
            Residences; and

      (4)   the registration of the Lease by the Registrar of Lands.

      If the above conditions have not been satisfied by28th February, 2002, the
      Seller (in respect of condition (1) only) and the Buyer (in respect of all
      the conditions) may at any time thereafter by thirty (30) days' notice to
      the other party terminate this Agreement unless the necessary permissions
      are in fact obtained or the Buyer becomes so satisfied during those thirty
      (30) days. If any condition has not been satisfied by the expiry of those
      thirty (30) days, the Seller must immediately return the Deposit to the
      Buyer and the Buyer must immediately surrender the Lease whereupon this
      Agreement will immediately terminate and neither party will have any
      further rights against the other arising out of it.

15.   NO SALE OF BUSINESS

      It is declared for the avoidance of doubt that this Agreement does not
      constitute a sale of any business of water desalination and distribution
      now carried on by the Seller on the Property. Accordingly, the Seller must
      before the Completion Date procure the termination of the employment of
      all staff presently employed in that business and the payment of all
      severance and other money to which those employees may be entitled on that
      termination. The Buyer may on the Completion Date offer employment to any
      of those former employees whom it wishes to hire.

16.   RELEASE

      For the avoidance of doubt, each of the Buyer, the Seller, Ellesmere and
      Hyatt Britannia releases the others from all claims, demands, liabilities,
      sums of money, actions, proceedings or accounts which each of them now has
      or at any time has had against any of the others in relation to any matter
      raised in and/or any fact or circumstance alleged in the action in Grand
      Court Cause No. 703 of 1996 and/or any other existing fact whether or not
      presently known to any of them.

17.   ACKNOWLEDGMENTS

      The Seller, Ellesmere and Hyatt Britannia each acknowledges the validity
      of the Concession (a copy of which each of them also acknowledges it has
      received) and will not challenge the Buyer's rights under it or act in any
      manner which would cause loss, damage or injury to the Buyer or its
      business carried on through the existence of the Concession. None of the
      Seller, Ellesmere or Hyatt Britannia will at any time while the Buyer is
      the holder of the Concession challenge or impugn the supply of water by
      the Buyer to the Britannia Residences and in particular will not bring any
      proceedings in relation to the Britannia Residences in the Grand Court
      against the Buyer which arises from or is based on any allegation of fact
      and/or law which is the same as and/or



                                       8
<PAGE>

      similar to those raised or relied upon in defending the action in Grand
      Court Cause No. 703 of 1996. The Buyer will not bring any further
      proceedings in relation to the Hotel and the matters raised in the Grand
      Court Action No. 703 of 1996 which arises from or is based on any
      allegation of fact which is the same as and/or similar to those raised or
      relied upon in that action.

                               THE SECOND SCHEDULE

                               PART I - THE PLANT

1     SEAWATER REVERSE OSMOSIS PLANT SKID #4 COMPRISED OF:

             CARTRIDGE FILTER
             Brand Name:                       No Name Plate
             Model #:                          NA
             Serial #:                         NA

             HIGH PRESSURE PUMP
             Brand Name:                       WHEATLEY
             Model #:                          HP165M
             Serial #:                         12834

             MOTOR
             Brand Name:                       TOSHIBA (HOUSTON)
             Model #:                          B-1254FLA4UD
             Serial #:                         AB54699-1

             ENERGY RECOVERY TURBINE
             Brand Name:                       CALDER
             Model #:                          PT8650 E1 (or) NP4840/A
             Serial #:                         NA

             MEMBRANE ELEMENT HOUSINGS
             Description:                      23 Housings and element-single
                                               element per housing
             Membranes                         Dupont

             DRAW BACK TANK
             WATER METER
             CONTROL PANEL

2     SEAWATER REVERSE OSMOSIS PLANT SKID #5 COMPRISED OF:

             CARTRIDGE FILTER
             Brand Name:                       EXCEL
             Model #:                          30EFCS3-3C150
             Serial #:                         NA



                                       9
<PAGE>

             HIGH PRESSURE PUMP
             Brand Name:                       WHEATLEY
             Model #:                          HP165M
             Serial #:                         NA

             MOTOR
             Brand Name:                       SIEMENS
             Order #:                          2-312-LR91633-2
             Serial #:                         NA

             ENERGY RECOVERY TURBINE
             Brand Name:                       CALDER
             Model #:                          PT8650 E1 (or) NP4840/A
             Serial #:                         NA

             MEMBRANE ELEMENT HOUSINGS
             Description:                      12 twin housings-PERMASEP
             Membranes                         Dupont

             DRAW BACK TANK
             WATER METER
             CONTROL PANEL

3     SEAWATER REVERSE OSMOSIS PLANT SKID #6 COMPRISED OF:

             CARTRIDGE FILTER
             Brand Name:                       OSMONICS
             Model #:                          HX1620-3 OT-PVC-D
             Serial #:                         96-A49103-1

             HIGH PRESSURE PUMP
             Brand Name:                       WHEATLEY
             Model #:                          HP165AM  /29613-B
             Serial #:                         22747


             MOTOR
             Brand Name:                       SIEMENS
             Order #:                          2-5106-LR90303-1
             Serial #:                         NA

             ENERGY RECOVERY TURBINE
             Brand Name:                       CALDER
             Model #:                          RO-4034 1390 15
             Serial #:                         NA

             MEMBRANE ELEMENT HOUSINGS
             Description:                      20 B-10 PERMASEP Housings-one
                                               membrane per housing
             Membranes                         DUPONT

             DRAW BACK TANK
             WATER METER
             CONTROL PANEL


                                       10
<PAGE>

4     SEAWATER REVERSE OSMOSIS PLANT SKID #7 COMPRISED OF:

             CARTRIDGE FILTER
             Brand Name:                       EXCEL
             Model #:                          30EFCS3-3C150
             Serial #:                         NA

             HIGH PRESSURE PUMP
             Brand Name:                       WHEATLEY
             Model #:                          HP165AM  /29613-B
             Serial #:                         23852

             MOTOR
             Brand Name:                       TICO AMERICA
             Model #:                          NA
             Serial #:                         NA

             ENERGY RECOVERY TURBINE
             Brand Name:                       CALDER
             Model #:                          RO-290-40
             Serial #:                         021-97-A2316

             MEMBRANE ELEMENT HOUSINGS
             Description:                      1) 4 Triples (3 membranes per
                                                  housing), no name brand on
                                                  housings

                                               2) 2 Doubles(2 membranes per
                                                  housing), PERMASEP
             Membranes                         DUPONT

             DRAW BACK TANK
             WATER METER
             CONTROL PANEL


5     POTABLE WATER OZONATION SYSTEM COMPRISED OF:

             AIR COMPRESSOR PACKAGE
             Brand Name:                       INGERSOLL RAND
             Model #:                          SS-EP15
             Serial #:                         LX0230U98043


                                       11
<PAGE>

             AIR COMPRESSOR MOTOR
             Brand Name:                       US ELECTRIC MOTOR DIVISION OF
                                               EMERSON ELECT CO.
             Model #:                          T589A
             ID #:                             B01A339RO65F

             MOISTURE SEPARATOR
             Brand Name:                       THERMAL TRANSFER PRODUCTS
             Model #:                          S-100-AD
             ID #:                             S-6019

             REFRIGERATED DRYER
             Brand Name:                       INGERSOLL RAND
             Model #:                          DXR50
             Serial #:                         97LDXR5563

             OXYGEN CONCENTRATOR
             Brand Name:                       AIRSEP-NATL BD 72602K-CERTIFIED
                                               BY BRUNNER ENG & MFG INC.

             Model #:                          AS-160/250/450
             Serial #:                         NA

             OXYGEN RECEIVER
             Brand Name:                       NATL.BD NO.182314-CERTIFIED
                                               BY STEEL FAB
                                               ABINGDON VA.
             PART #:                           CRN C7228.1C
             Serial #:                         NA

             OZONE GENERATOR
             Brand Name:                       OSMONICS
             Model #:                          HC-5
             Serial #:                         NA


             OZONE INJECTOR MOTOR
             Brand Name:                       BALDOR
             Cat#:                             JWMDM3616T
             Serial #:                         NA

             CENTRIFUGAL PUMP(OZONE INJECTOR)
             Brand Name:                       WAUKESHA CHERRY BURRELL
             Model #:                          U2065
             Serial #:                         2200989

             DISSOLVED OZONE MONITOR
             Brand Name:                       OREC/OSMONICS
             Model #:                          NA
             Serial #:                         NA



                                       12
<PAGE>

             AC DRIVE
             Brand Name:                       MEGNETEK
             Model #:                          GPD 506   N12-506V-B014
             Serial #:                         34469


6     HIGH SERVICE WATER DISTRIBUTION PUMP SYSTEM COMPRISED OF:

             DWPO4
             CENTRIFUGAL PUMP
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          C820AM
             Serial #:                         152587B

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Cat #:                            JMM2514T
             Spec #:                           39K35W525

             DWPO5
             CENTRIFUGAL PUMP
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          C820AM
             Serial #:                         152587A

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Cat #:                            JMM2514T
             Spec #:                           39K35W528


             DWPO7
             CENTRIFUGAL PUMP
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          C820AM
             Serial #:                         152587C

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       US ELECTRICAL MOTORS
             Model #:                          E685A
             Serial #:                         BO1A287RR087F



                                       13
<PAGE>

7     DOMESTIC WATER TRANSFER PUMP SYSTEM COMPRISED OF:

             CWP01
             CENTRIFUGAL PUMP
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          820A
             Serial #:                         TI57490

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Model #:                          JMM3314T
             Spec #:                           37F196X48

             CWP02
             CENTRIFUGAL PUMP
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          C825AM
             Serial #:                         171953

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Model #:                          JMM3314T
             Spec #:                           37F196X48


8     TRANSFER PUMP TO OZONATION SYSTEM COMPRISED OF:

             CENTRIFUGAL PUMP
             Brand Name:                       AMPCO
             Model #:                          3 x 2 1/2 ZC2
             Serial #:                         CC16867-1-1

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Model #:                          NA
             Spec #:                           07H167W06

9     IRRIGATION TRANSFER PUMP SYSTEM COMPRISED OF:

             IRP01
             CENTRIFUGAL PUMP
             Brand Name:                       PAC_SEAL
             Model #:                          4P940
             Motor Reference #:                G40444/F96Z120R169F

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       DAYTON
             Model #:                          9N114
             Motor Reference #:                G40444/F96Z120R169F

             CWP02
             TRANSFER PUMP TO TANK
             Brand Name:                       PEERLESS PUMP COMPANY
             Model #:                          C825AM
             Serial #:                         171953

             THREE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Model #:                          JMM3314T
             Spec #:                           37F196X48


                                       14
<PAGE>

10    POTABLE WATER DEGASSIFIER COMPRISED OF:

             Brand Name:                       DELEOCH
             Model #:                          NA
             Serial #:                         NA

             BLOWER MOTOR #1
             SINGLE PHASE INDUCTION MOTOR
             Brand Name:                       BALDOR
             Model #:                          VL313
             Serial #:                         NA

             BLOWER MOTOR #2
             THREE PHASE INDUCTION MOTOR
             Brand Name:                       GE MOTORS & INDUSTRIAL SYSTEMS
             Model #:                          5K49ZN2189
             Serial #:                         NMLI42677


11    SEAWATER WELLS AND SUBMERSIBLE PUMPS COMPRISED OF:

              WP #2
              FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
              SUBMERSIBLE PUMP
              Brand Name:                                 JACUZZI
              Model #:                                    S6175-2
              Serial #:                                   92611702



                                       15
<PAGE>

              THREE PHASE MOTOR
              Brand Name:                                 FRANKLIN
              Model #:                                    236 6119 020
              Serial #:                                   99g19-14-0014

              WP #4
              FEEDWATER WELL, CASING AND WELL
              HEAD APPURTENANCES SUBMERSIBLE PUMP
              Brand Name:                                 GRUNFOS
              Model #:                                    300S75-2
              Serial #:                                   14B70002

              THREE PHASE MOTOR
              Brand Name:                                 FRANKLIN
              Model #:                                    236 6119 020
              Serial #:                                   NA

              WP #5
              FEEDWATER WELL, CASING AND WELL
              HEAD APPURTENANCES SUBMERSIBLE PUMP
              Brand Name:                                 GRUNFOS
              Model #:                                    300S75-2
              Serial #:                                   NA

              THREE PHASE MOTOR
              Brand Name:                                 FRANKLIN
              Model #:                                    236 6119 020
              Serial #:                                   NA

              WP #6
              FEEDWATER WELL, CASING AND WELL
              HEAD APPURTENANCES SUBMERSIBLE PUMP
              Brand Name:                                 GRUNFOS
              Model #:                                    300S75-2
              Serial #:                                   14B70002

              THREE PHASE MOTOR
              Brand Name:                                 FRANKLIN
              Model #:                                    236 6119 020
              Serial #:                                   NA



                                       16
<PAGE>

12    DIESEL POWERED GENERATOR COMPRISED OF:

             EMERGENCY GENERATOR ENGINE
             Brand Name:                       KOMATSU LTD
             Model #:                          6491
             Serial #:                         14448

             EMERGENCY GENERATOR
             Brand Name:                       ONAN 60
             Model #:                          60 ODVB-15R/30083B
             Serial #:                         B850750776

             FUEL INJECTION PUMP
             Brand Name:                       DIESEL KIKI
             ASSY  #:                          6207-71-1410
             Serial #:                         450K327320

             MAGNETIC DRIVER
             Brand Name:                       NIKKO ELECT IND CO LTD
             Model #:                          600-815-5560
             Serial #:                         0-47100-3720


13    BOLTED STEEL 816,000 US GALLON POTABLE WATER TANK

             Brand Name:                       Florida Aquastore, Inc.
             Model #:                          NA
             Serial #:                         NA

14    ALL INTERCONNECTING PIPING, CONDUITS AND APPURTENANCES, ABOVE THE GROUND
      WHICH CONNECT ITEMS 1 THROUGH 13 TO EACH OTHER, AND TO THE WATER PIPE, AND
      WHICH DIRECTLY FACILITATE THE OPERATION AND MAINTENANCE OF ITEMS 1 THROUGH
      13.


15    ALL ELECTRICAL EQUIPMENT AND COMPONENTS WHICH CONNECT ITEMS 1 THROUGH 13
      TO EACH OTHER AND TO THE MAIN ELECTRICAL SERVICE IN THE RO BUILDING.

16    ALL CONTROLS AND INSTRUMENTATION ATTACHED TO ITEMS 1 THROUGH 13.

17    ALL TOOLS THAT ARE SPECIFIC TO THE MAINTENANCE OR OPERATION OF THE PLANT.

18    ALL LABORATORY AND TESTING EQUIPMENT USED TO MONITOR WATER PRODUCED BY THE
      PLANT.

19    ALL DRAWINGS, SCHEDULES, OPERATION AND MAINTENANCE MANUALS FOR ITEMS 1
      THROUGH 18.

20    ALL OFFICE EQUIPMENT CURRENTLY LOCATED WITHIN THE RO BUILDING AND USED BY
      THE STAFF OF THE PLANT.

21    ALL SPARE PARTS FOR ITEMS 1 THROUGH 18, STORED MATERIALS SUCH AS CHEMICALS
      AND LUBRICANTS HELD IN STOCK AT THE TIME OF CLOSING.


                                       17
<PAGE>



                       PART II - THE BRITANNIA DEVELOPMENT

                      SECTION A - THE BRITANNIA RESIDENCES

<TABLE>
<CAPTION>
- --------------------------- -------------------------------------------- ---------------------- ----------------------
          PHASE                        REGISTRATION SECTION                      BLOCK                 PARCEL
- --------------------------- -------------------------------------------- ---------------------- ----------------------
<S>                           <C>                                                 <C>                    <C>
            I                          West Bay Beach South                       12D                    25
- --------------------------- -------------------------------------------- ---------------------- ----------------------
            II                         West Bay Beach South                       12D                    40
- --------------------------- -------------------------------------------- ---------------------- ----------------------
            II                         West Bay Beach South                       12D                    38
- --------------------------- -------------------------------------------- ---------------------- ----------------------
            II                         West Bay Beach South                       12D                    39
- --------------------------- -------------------------------------------- ---------------------- ----------------------
    Britannia Estates                  West Bay Beach South                       12D                    65
- --------------------------- -------------------------------------------- ---------------------- ----------------------
    Britannia Estates                  West Bay Beach South                       12D                    77
- --------------------------- -------------------------------------------- ---------------------- ----------------------
    Britannia Estates                  West Bay Beach South                       12D                    74
- --------------------------- -------------------------------------------- ---------------------- ----------------------
                                                                                                 42, 43, 44, 45, 46,
                                                                                                 47, 48, 49, 50, 70,
    Britannia Estates                  West Bay Beach South                       12D            53, 78, 55, 56, 57,
                                                                                                 58, 59, 60, 61,
                                                                                                 62, 63, 64
- --------------------------- -------------------------------------------- ---------------------- ----------------------
       Kings Court                     West Bay Beach South                       12D                    80
- --------------------------- -------------------------------------------- ---------------------- ----------------------

</TABLE>

                              SECTION B - THE HOTEL

<TABLE>
<CAPTION>

- ---------------------------------------- -------------------------------------- --------------------------------------
         REGISTRATION SECTION                            BLOCK                                 PARCEL
- ---------------------------------------- -------------------------------------- --------------------------------------
<S>                                                       <C>                                    <C>
         West Bay Beach South                             12C                                    27
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                    24
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                  79REM1
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    89
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    88
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    94
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12C                                    154
- ---------------------------------------- -------------------------------------- --------------------------------------
               Rum Point                                  33B                                 169 & 173
- ---------------------------------------- -------------------------------------- --------------------------------------

</TABLE>


                         SECTION C - THE UNDEVELOPED LOT

<TABLE>
<CAPTION>

- ---------------------------------------- -------------------------------------- --------------------------------------
         REGISTRATION SECTION                            BLOCK                                 PARCEL
- ---------------------------------------- -------------------------------------- --------------------------------------
<S>                                                       <C>                                    <C>
         West Bay Beach South                             12D                                    26
- ---------------------------------------- -------------------------------------- --------------------------------------

</TABLE>


                                       18
<PAGE>

                               THE THIRD SCHEDULE


THIS AGREEMENT is made this ______ day of __________________, 2001,


BETWEEN:    CONSOLIDATED WATER CO. LTD. a Cayman Islands company having its
            registered office at Trafalgar Place, West Bay Road, P.O. Box 1114,
            George Town, Grand Cayman B.W.I. ("CWC")

AND:        CAYMAN HOTEL & GOLF INC. a Canada corporation having its address for
            service in the Cayman Islands in care of Ritch & Conolly, Queensgate
            House, South Church Street, P.O. Box 1994, George Town, Grand Cayman
            B.W.I.("the Customer")

RECITAL:

The Customer wishes to obtain a supply of potable water in specified volume (i)
by pipe for the Hotel known as the Hyatt Regency, on both sides of the West Bay
Road, Grand Cayman and the irrigation of its golf course and (ii) by the
Customer's truck for the Rum Point restaurant at Rum Point, and CWC has agreed
to supply the water on the terms set out in this Agreement;

AGREEMENT:

1.    SUPPLY OF WATER

      (1)   Subject to sub-clause (4), CWC will supply the Customer from the
            Commencement Date until the expiry of the Term, on the terms and
            conditions set out in this Agreement potable water to the quality
            standard required by its Concession at the meter or meters referred
            to in Clause 2(3) at a maximum rate of 260 gallons per minute at 62
            pounds per square inch gauge.

      (2)   The Volume of water supplied will be a minimum of 170,000 U.S.
            gallons per day. The maximum volumes to be supplied will be the
            amount from time to time agreed by CWC who must use its best
            endeavours to supply the Customer's demands in full.

      (3)   Notwithstanding that CWC has connected any water supply to a hydrant
            or sprinkler system in the Hotel, it is expressly agreed that CWC
            will be under no obligation to provide water for fire fighting
            purposes or to ensure that the Water Tank contains water at any time
            whatever or under any circumstances, and will only supply water for
            those purposes if it is able to do so, and will not be liable for
            any damage whatever to the Hotel or any part of it caused by fire or
            any related cause.

      (4)   For the purposes of this Agreement, the water supplied to the
            Customer is deemed to be the amount of water shown by:-

            (a)   the meter measuring the amount of water passing through the
                  Fire Pump; plus

            (b)   the meter measuring the amount of water flowing into the
                  Irrigation Tank; plus

            (c)   the Property Meter

            less the amount of water shown by the Main Meter.

      (5)   CWC must give not less than twenty-four (24) hours' notice to the
            Customer of any occasion on which to its knowledge the Water Tank
            will for any reason contain less than 250,000 U.S. gallons of water
            and if in circumstances unforeseen by CWC, the water in the Water
            Tank is, or within twenty-four (24) hours will be, reduced below



                                       19
<PAGE>

            250,000 U.S. gallons, CWC must notify the Customer immediately it
            becomes aware of that fact.

2.   PAYMENT

     (1)    From the Commencement Date until the end of the Term, the Customer
            will, subject to sub-clause (6) and clause 4, pay a price per 1,000
            U.S. gallons equal to the total of the following:-

            (a)   for the Required Monthly Gallonage in any calendar month,
                  US$8.50 subject to adjustment on 1st January, 2002 and on each
                  January 1st thereafter in accordance with sub-clause (2);

            (b)   for any volume supplied in excess of the Required Monthly
                  Gallonage in any calendar month, the price charged to
                  commercial consumers from time to time within that part of the
                  Licence Area in which the Hotel is situated; and

            (c)   the Energy Adjustment Factor from time to time.

     (2)    On each 1st January commencing 1st January, 2002 the Consumption
            Charge per 1,000 U.S. gallons of the Required Monthly Gallonage in
            that year will be adjusted to the figure obtained by reference to
            the following formula:-

                                5.41 X USPPIL +  3.09 X CICPIL
                                -------------    -------------
                                  USPPI00          CICPI00

            For the purposes of this clause:-

            USPPIL is the United States Producer Price Index for Industrial
            Commodities at the preceding September 30th and USPPI00 is that
            index at September 30, 2000, and

            CICPIL is the Cayman Islands Consumer Price Index at the preceding
            September 30th and CICPI00 is that index at September 30, 2000.

            BUT if the Cayman Islands Government does not produce a Consumer
            Price Index at any relevant date, the United States Government
            Consumer Price Index for that date and September 30, 2000 must be
            used.

     (3)(a) CWC must furnish, fix and maintain in good repair the Main
            Meter, the Property Meter and the meters measuring the volumes of
            water flowing into the Irrigation Tank and passing through the Fire
            Pump for determining the quantity of water used by the Customer. The
            Customer must pay the rental specified in paragraph (b) for the use
            of the Property Meter and the meter measuring the volume of water
            passing through the Fire Pump only, which will remain the property
            of CWC. If any meter is damaged by the Customer, its servants,
            agents or invitees, CWC will repair or replace the meter but at the
            Customer's expense. The Customer is liable for the cost of all water
            passing through the Property Meter less water passing through the
            Main Meter unless





                                       20
<PAGE>

            any meter is found to be defective after a complaint by the Customer
            to CWC. CWC will charge the Customer for water used based on the
            average water consumption of the previous twelve (12) months when
            the defective meter was working, pro rata for the period when the
            meter was not recording correctly or not recording at all.

        (b) Meter rates are as follows:-

<TABLE>
<CAPTION>
              SIZE           MONTHLY RENTAL           CONNECTION FEE              RECONNECTION FEE
              ----           --------------           --------------              ----------------

<S>                                <C>                    <C>                           <C>
            20 mm (3/4")         CI$ 3.50               CI$ 80.00                     CI$ 50.00
            25 mm (1")           CI$ 5.00               CI$120.00                     CI$ 75.00
            38 mm (1 1/2")       CI$ 7.50               CI$175.00                     CI$110.00
            50 mm (2")           CI$10.00               CI$240.00                     CI$150.00
            75 mm (3")           CI$15.00               CI$360.00                     CI$225.00
            100 mm (4")          CI$25.00               CI$560.00                     CI$300.00
            150 mm (6")          CI$40.00               CI$800.00                     CI$350.00

</TABLE>
      (4)   CWC must invoice the Customer for the Monthly Charge for the
            previous calendar month and any unpaid balance on the account
            (including interest on any late payments at the rate set out below)
            and the Customer must pay each invoice within twenty-one (21) days
            failing which the Customer must pay CWC interest at the rate of 1
            1/2% per month calculated on a daily basis from the due date to the
            date of payment, which CWC may charge whether or not it continues to
            supply water. If any invoice remains unpaid for 30 days from its
            date then CWC may cease supplying water until the Customer pays all
            invoices up to date.

      (5)   The water supply service must be used only by the Customer or his
            tenants or guests and must not be re-sold or otherwise supplied to
            third parties, either within or outside the boundaries of the
            Property.

      (6)   For the period beginning on the date of this agreement and ending on
            31st May, 2002 only, for any gallonage supplied in excess of the
            Required Monthly Gallonage in any calendar month, the Customer will
            pay a price per 1000 U.S. gallons equal to the price payable
            pursuant to subclause 2(1)(a) and (c) in the relevant calendar month
            for the Required Monthly Gallonage.

3.    SECURITY DEPOSIT

      The Customer must pay CWC on the date of this Agreement, a deposit of
      US$50,000.00 which CWC must hold on account of the payment of the Monthly
      Charge during the last month of this Agreement. So long as the Customer
      has paid all charges (including any interest on late payments) due under
      this Agreement during the previous year, CWC must, on every anniversary of
      the payment of the deposit, compute and credit the Customer against the
      following month's bill for water under this Agreement, interest on that
      deposit at the average rate paid by Cayman National Bank during the
      previous year on fixed deposits of US$50,000.00 for periods of one year.
      If at the end of this Agreement any portion of the deposit remains unused,
      CWC must immediately refund it to the Customer without interest.



                                       21
<PAGE>

4.    MINIMUM WATER QUANTITY

      (1)   The Customer must pay the Consumption Charge for at least 170,000
            U.S. gallons of water per day whether or not it is used if CWC was
            able to supply that quantity on the particular day. If CWC could not
            have supplied that quantity of water on any day, the Customer need
            only pay for the quantity which could have been supplied.

      (2)   Notwithstanding sub-clause (1), if in any month after May 2002 the
            Customer does not use the minimum water quantity for which he has
            paid the Consumption Charge, CWC must give credit in succeeding
            months for the Consumption Charge paid in respect of the unused
            water against the Monthly Charge for water used in those months in
            excess of the minimum quantity BUT except in respect of credits
            earned after 31st May, 2026, which will expire on the expiration of
            this Agreement, unused credits earned in each 24 month period which
            commences 1st June during the Term (the first of which will commence
            1st June, 2002) will expire at the end of each such 24 month period.

5.    FORCE MAJEURE

      Notwithstanding anything to the contrary in this Agreement, the Customer's
      rights against CWC and any corresponding obligations of the Customer will
      be suspended during any period in which CWC cannot carry out its
      obligations under this Agreement because of FORCE MAJEURE which includes,
      without limitation, hurricane, fire, flood or other acts of God, accident,
      explosion, war, strike, lockout, labour trouble, expropriation by
      Governmental authority, regulation, orders or requests of Governmental
      agencies or inability by the exercise of reasonable diligence to obtain
      supplies, materials or power.

6.    ASSIGNMENT

      (1)   The Customer may not assign the benefit of this Agreement without
            first obtaining CWC's consent (such consent not to be unreasonably
            withheld or delayed) BUT:-

            (a)   may without that consent and subject to it remaining fully
                  liable to CWC in all respects assign this Agreement to

                  o     any wholly owned subsidiary company or any company which
                        owns all of the Customer's shares; or

                  o     any successor to the Customer by consolidation, merger
                        or other corporate action; or

                  o     the operator of the Hotel (currently the Hyatt Regency,
                        Grand Cayman) from time to time; or

                  o     any purchaser of the Customer or purchaser of the Hotel.

            (b)   in every case, each assignee of the Customer must assume and
                  will be taken to have assumed the obligations under this
                  Agreement and will be liable in addition to



                                       22
<PAGE>

            the Customer, from the date of the assignment, to comply with all
            the Customer's obligations in it.

            The Customer must give notice to CWC within one month after any
            transaction under this clause, supplying a copy of the instrument.

            On CWC's giving consent to any assignment and the assignee agreeing
            to accept all of the Customer's obligations under this Agreement,
            the Customer will be released from all those obligations as of the
            date of CWC's consent, but without prejudice to CWC's right of
            action in respect of any antecedent breaches by the Customer.

      (2)   CWC agrees that if at any time CWC assigns or transfers the
            Concession or the Concession is granted to another company in which
            CWC has an interest, it will assign this Agreement to the assignee,
            transferee or grantee (as the case may be) of the Concession.

7.    TERMINATION

      (1)   This Agreement may, without prejudice to any other rights which the
            terminating party may have against the other, be terminated by
            either party before the end of the Term if the other party:-

            (a)   does not comply with any of its representations, warranties or
                  agreements set out in this Agreement and does not remedy the
                  breach (if capable of remedy) within 30 days of service on it
                  of notice so to do; or

            (b)   is prohibited from performing its obligations under this
                  Agreement as a result of any applicable law or regulation.

      (2)   The Customer may terminate this Agreement at any time after the
            Lease has been terminated by the Customer pursuant to the
            termination provisions contained in the Lease.

8.    NOTICES

      (1)   A notice or other communication under or in connection with this
            Agreement shall be in writing and shall be delivered personally or
            sent by telefax, as follows:-

            (a)   if to CWC, to:-

                      Trafalgar Place
                      West Bay Road, West Bay
                      P.O. Box 1114
                      George Town, Grand Cayman B.W.I.
                      Telefax:  (345) 945-4191

                  with a copy to:-
                      Myers & Alberga
                      One Regis Place, 90 Fort Street
                      P.O. Box 472
                      George Town, Grand Cayman B.W.I.
                      Attn:  Mr. Bryan L. Ashenheim
                      Telefax: (345) 949-8171



                                       23
<PAGE>

            (b)   if to the Customer, to:-

                      P.O. Box 1698
                      George Town, Grand Cayman B.W.I.
                      Telefax:  (345) 949-8032

                   with a copy to:-
                      Ritch & Conolly
                      P.O. Box 1994
                      George Town, Grand Cayman B.W.I.
                      Attn:  Mr. Angus Charlton
                      Telefax:  (345) 949-8652 or 949-0673

            or to another person, address or telefax number specified by a party
            by written notice to the others.

      (2)   In the absence of evidence of earlier receipt, a notice or other
            communication is deemed given:-

            (a)   if delivered personally, when left at the address referred to
                  in Clause 8(1).

            (b)   if sent by telefax, on completion of its transmission or, if
                  sent on a day which is not a working day at the recipient's
                  address, at 9:00 a.m. (recipient's time) on the next
                  succeeding working day at the recipient's address.

9.    ENTIRE AGREEMENT, BINDING EFFECT AND MODIFICATION

      This Agreement is binding on the parties and their respective successors
      and assigns and may be amended or modified only by a further written
      agreement signed by both parties. This Agreement sets out the entire
      agreement of the parties with respect to its subject matter and supersedes
      all previous agreements and understandings whether oral or written
      relating to it.

10.   NO WAIVER OF TERMS

      Unless there is a written agreement to the contrary, no neglect, omission
      or forbearance on CWC's part to take advantage of or enforce any right or
      remedy arising out of any breach or non-observance of any of the terms and
      conditions contained or implied in this Agreement will be deemed to be or
      operate as a general waiver of that term or condition or the right to
      enforce or take advantage of it in respect of any breach or non-observance
      of it either original or recurring.



                                       24
<PAGE>

11.   DEFINITIONS

      For the purposes of this Agreement:-

      (1)   "the Commencement Date" means the 1st day of [FILL IN NEXT MONTH
            AFTER COMPLETION OF AGREEMENT].

      (2)   "the Concession" means the concession granted to CWC under the Law,
            as amended from time to time.

      (3)   "the Consumption Charge" means the charge in sub-clause 2(1)(a)
            subject to adjustment in accordance with sub-clause 2(2).

      (4)   "the Energy Adjustment Factor" means the Energy Adjustment Factor as
            defined in the Concession.

      (5)   "the Fire Pump" means the Customer's fire pump connected to the
            Water Tank.

      (6)   "the Hotel" means the hotel presently known as the Hyatt Regency,
            the Britannia golf course, the Hyatt beach club and Hemingway's
            restaurant and the Rum Point restaurant comprised in the Land
            Registers referred to in the Schedule.

      (7)   "the Irrigation Tank" means the Customer's irrigation tank marked as
            such on the Plan.

      (8)   "the Law" means the Water (Production and Supply) Law (1996
            Revision) which expression includes any amendment, consolidation or
            re-enactment of it.

      (9)   "the Lease" means the lease under the Registered Land Law between
            the Customer as landlord and CWC as tenant of part of the land
            comprised in Registration Section West Bay Beach South Block 12D
            Parcel 79REM1.

      (10)  "the Licence Area" means the area for which CWC has been granted the
            Concession under the Law.

      (11)  "the Main Meter" means the water meter edged purple on the Plan
            metering the supply of water to that part of the Britannia
            Development known as "Britannia Villas".

      (12)  "the Monthly Charge" means the total of the Consumption Charge and
            the Energy Adjustment Factor in respect of each month.

      (13)  "the Plan" means the plan attached to this Agreement marked
            `Property Plan' and initialled by the parties for the purposes of
            identification.

      (14)  "the Property" means the land situated in Grand Cayman being that
            part of the land registered at Block 12D Parcel 79 REM 1 in the West
            Bay Beach South Registration Section of Grand Cayman, Cayman Islands
            as appears outlined in red on the Plan.

      (15)  "the Property Meter" means the water meter at the boundary of the
            Property to which the Water Pipe is connected, the location of which
            is marked in pink on the Plan.



                                       25
<PAGE>

      (16)  "the Required Monthly Gallonage" means 170,000 multiplied by the
            number of days in the relevant calendar month.

      (17)  "the Term" means the period of twenty-five (25) years or until the
            earlier expiry of the Concession or any renewal of it, commencing on
            the Commencement Date.

      (18)  "the Water Pipe" means the water pipe coloured brown on the Plan
            running from the Property Meter to the Main Meter.

      (19)  "the Water Tank" means the water tank owned by CWC located on the
            Property and marked as such on the Plan.

12.   APPLICABLE LAW AND FORUM

      This Agreement is governed by and must be construed in accordance with the
      laws of the Cayman Islands and both parties submit to the non-exclusive
      jurisdiction of the Cayman Islands Courts.

                                  THE SCHEDULE

                                    THE HOTEL

<TABLE>
<CAPTION>
- ---------------------------------------- -------------------------------------- --------------------------------------
         REGISTRATION SECTION                            BLOCK                                 PARCEL
- ---------------------------------------- -------------------------------------- --------------------------------------
<S>                                                       <C>                                    <C>
         West Bay Beach South                             12C                                    27
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                  24 & 26
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                  79REM1
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    89
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    88
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    94
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12C                                    154
- ---------------------------------------- -------------------------------------- --------------------------------------
               Rum Point                                  33B                                 169 & 173
- ---------------------------------------- -------------------------------------- --------------------------------------

</TABLE>


SIGNED for and on behalf of            )        CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER CO. LTD. by         )
                                       )
a Director, in the presence of:-       )
                                       )        Per:_________________________
____________________________________   )                    Director
Witness


SIGNED on behalf of CAYMAN             )        CAYMAN HOTEL & GOLF INC.
HOTEL & GOLF INC. by                   )
                       , a Director,   )
and by                                 )        Per:____________________________
the presence of:-                      )                   Director
                                       )
____________________________________   )        Per:____________________________
Witness



                                       26
<PAGE>



                               THE FOURTH SCHEDULE

                                    THE LEASE

THIS LEASE is made the ________ day of _______________________, 2001,


BETWEEN:    CAYMAN HOTEL & GOLF INC., a Canada corporation, of P.O. Box 1698,
            George Town, Grand Cayman B.W.I. ("the Landlord")

AND:        CONSOLIDATED WATER CO. LTD., a Cayman Islands company, of P.O. Box
            1114, George Town, Grand Cayman B.W.I. ("the Tenant")

AND WITNESSES as follows:-

1.    In this Lease:-

      (1)   unless inconsistent with the context or subject matter or
            circumstances the following expressions have the following
            meanings:-

            (a)   "the Adjoining Property" means the lands comprised in West Bay
                  Beach South Registration Section Block 12C Parcels 27 and 154,
                  Block 12D Parcels 24, 26 and 79REM1 (other than the Land) and
                  Block 12E Parcels 88, 89 and 94 and any other land which
                  adjoins the Land in which the Landlord during the Term
                  acquires an interest as proprietor or tenant.

            (b)   "the Building" means the building on the Land in which the
                  Tenant's water plant and the laundry for the Hotel are
                  situated shown edged blue on the Plan.

            (c)   "the Common Areas" means all those parts of the Landlord's
                  adjoining land shown hatched in red on the Plan.

            (d)   "Conduits" includes wires, cisterns, chutes or pipes for the
                  supply of water, telephone, electricity and gas and the
                  disposal of domestic waste in, under or over the Land.

            (e)   "the Land" means the land and buildings comprised in this
                  Lease and shown for the purposes of identification only edged
                  red on the Plan but excluding the Landlord's Building.

            (f)   "the Landlord's Building" means the building marked "Golf Cart
                  Maintenance" hatched green on the Plan, and any of its
                  contents from time to time.

            (g)   "the Landlord" and "the Tenant" include their respective
                  successors in title.

            (h)   "Notice" includes demand and vice versa.

            (i)   "the Plan" means the plan of the Land attached marked "Lease
                  Plan".


                                       27
<PAGE>

            (j)   "the Plant" means the machinery, equipment and personal
                  property described and listed in the Schedule.

            (k)   "the Right of Way" means all that part of the Land shown
                  delineated in red on the Plan.

            (l)   "the RO Area" means the area of the Building edged in red and
                  shown on the Plan.

            (m)   "share(d)" means share(d) with the Landlord.

            (n)   "the Term" means twenty-five (25) years starting on 1st]. -

            (o)   "the Water Supply Agreement" means an agreement for the supply
                  of water to the Hotel dated the same day as this Lease and
                  made between the Landlord and the Tenant.

      (2)   (a)   An obligation not to do something includes an obligation not
                  to permit or suffer others to do it.

            (b)   An obligation imposed is to be performed and a power or right
                  conferred is exercisable, in each case from time to time.

            (c)   Consent, approval and notice must be in writing.

            (d)   The headings are for convenience only and have no legal
                  effect.

            (e)   References to the Laundry include parts of it.

            (f)   References to the Land include parts of it.

            (g)   Words of one gender include words of any other gender.

            (h)   Singular words include the plural and vice versa and where
                  there are two or more persons included in the expression "the
                  Tenant", agreements made by the Tenant are joint and separate.

2.    RENT

      The Landlord LEASES the Land to the Tenant for the Term together with the
      rights set out in sub-clause 5(ii) but excepting and reserving to the
      Landlord the rights set out in sub-clause 5(i), subject to the right of
      re-entry in Clause 5(iv), at the rent of One United States Dollars
      (US$1.00) per year. The Tenant must pay the rent in United States Dollars
      to the Landlord in advance on or before the 1st day of.



                                       28
<PAGE>

3.    TENANT'S AGREEMENTS

      The Tenant agrees with the Landlord:-

            (i)   PAYMENTS

                  to pay:-

                  (a)   the rent without any set off or counterclaim in
                        accordance with Clause 2;

                  (b)   all rates, taxes, assessments, duties, charges,
                        impositions and outgoings that are or now or may at any
                        time during the Term be charged, assessed or imposed
                        upon the Land or upon the owner or occupier of it. The
                        Tenant must also pay and indemnify the Landlord against
                        the proportion reasonably attributable to the Land of
                        all rates, taxes, assessments, duties, charges,
                        impositions and outgoings that are now or may at any
                        time during the term be charged, assessed or imposed on
                        the Land and any other property including Adjoining
                        Property or on their owners or occupiers;

                  (c)   the stamp duty on this Lease and on one copy and its own
                        legal fees; and

                  (d)   to the Landlord on an indemnity basis all costs, fees,
                        charges, disbursements and expenses including without
                        prejudice to the generality of the above those payable
                        to counsel, solicitors, surveyors and bailiffs incurred
                        by the Landlord in relation to or incidental:-

                        (1)   Every application made by the Tenant for a consent
                              or licence required by the provisions of this
                              Lease whether it is granted, refused or offered
                              subject to any qualification or condition or the
                              application is withdrawn

                        (2)   The contemplation, preparation and service of any
                              notices under this Lease or in contemplation of
                              proceedings against the Tenant even if forfeiture
                              is avoided otherwise than by relief granted by the
                              court

                        (3)   The recovery or attempted recovery of arrears of
                              rent or other sums due under this Lease and any
                              steps taken in contemplation of or in connection
                              with the preparation and service of a schedule of
                              dilapidation during or after the end of the Term.

     REPAIR

          (ii)(a) to keep every part of the Land (other than the Building) and
                  the interior of the RO Area and all fixtures, fittings and
                  equipment in it owned by the Landlord in good condition,
                  clean, tidy and well-decorated, fair wear and tear and damage
                  of which the Tenant, its licensees, invitees or visitors are
                  not the cause excepted; and

              (b) to permit the Landlord and its agents to paint or treat the
                  outside of the Building and all doors leading into the RO Area
                  and the outside of all windows and walls in the RO Area in
                  such colour and manner as the Landlord decides.

     NO ALTERATION

            (iii) not to alter, cut or damage the RO Area or any other part of
                  the Building without the Landlord's consent (which is deemed
                  to be given to the extent that it is within the RO Area and is
                  required for the operation of the Tenant's business situated
                  therein) and not to make any exterior alteration in the
                  appearance of the Building; and if it does so, to pay the
                  Landlord on demand the entire cost which the Landlord incurs
                  in repairing or replacing that damage.


                                       29
<PAGE>

     NUISANCE

         (iv)     save as may be required for the normal operation of the
                  Tenant's business, not to do on or in the Land or any part of
                  the Building anything which in the Landlord's opinion:-

                  (a)   is a nuisance to others;

                  (b)   is dangerous; or

                  (c)   might prejudice the Landlord's insurance cover or
                        increase the premium

                  and in particular, but without prejudice to the generality of
                  the foregoing or of the exception referred to, not to use on
                  the Land any chemicals which either individually or in
                  combination are noxious or explosive.

     ENTRY

         (v)(a)   to permit the Landlord and its agents to enter at all
                  reasonable times on reasonable notice except in an emergency
                  (when no notice is required) to:-

                  (1)   ascertain whether or not the covenants and conditions of
                        this Lease have been observed and performed and to view
                        the state of repair and condition of the Land;

                  (2)   carry out repairs;

                  (3)   do any work which the Tenant should have done under this
                        Lease;

                  (4)   comply with its other obligations under this Lease;

                  (5)   give to the Tenant or leave on the Land a notice
                        specifying the works required to remedy any breach of
                        the Tenant's obligations in this Lease.

            (b)   to carry out the work specified in any such notice to repair
                  as soon as possible.

            (c)   if within one month of service of a notice to repair the
                  Tenant has not started to execute the work referred to in that
                  notice or is not proceeding diligently with it or if the
                  Tenant fails to finish the work within two months, to permit
                  the Landlord to enter the premises to execute the outstanding
                  works and pay to the Landlord the cost of so doing and all
                  expenses incurred by the Landlord including legal costs and
                  surveyors fees within seven days of demand.



                                       30
<PAGE>

     ASSIGNMENT & SUB-LETTING

        (vi)(a)   not to assign, sublet or charge part only of the Land.

            (b)   save in respect of the floating Charge under the Tenant's
                  existing Debenture granted to the Royal Bank of Canada or any
                  Debenture replacing it, not to assign, sub-let or charge the
                  whole of the Land without the consent of the Landlord whose
                  consent may not be unreasonably withheld except that the
                  Tenant may without that consent and subject to it remaining
                  fully liable to the Landlord in all respects assign this Lease
                  to

                  o     any wholly owned subsidiary company or any company which
                        owns all of the Tenant's shares, or

                  o     any successor to the Tenant by consolidation, merger or
                        other corporate action;

                 in every case, each assignee of the Tenant assuming and being
                 taken to have assumed this Lease and being liable in addition
                 to the Tenant, from the date of the assignment, to comply with
                 all the Tenant's obligations in it but:-

                  (1)   if any of the following circumstances apply either at
                        the date when application for consent to assign is made
                        to the Landlord or after that date but before the
                        Landlord's consent is given the Landlord may withhold
                        its consent and if, after the Landlord's consent has
                        been given but before the assignment has taken place,
                        any such circumstances apply the Landlord may revoke his
                        consent. The circumstances are:-

                        (i)   That any sum due from the Tenant under this Lease
                              remains unpaid.

                        (ii)  That in the Landlord's reasonable opinion the
                              assignee is not a person who is likely to be able
                              to comply with the Tenant's covenants of this
                              Lease and to continue to be able to comply with
                              them following the assignment.

                        (iii) That the assignee or any guarantor for the
                              assignee is a corporation registered or otherwise
                              resident in a jurisdiction in which the order of a
                              court obtained in the Cayman Islands will not
                              necessarily be enforced against the assignee or
                              guarantor without any consideration of the merits
                              of the case.

                  (2)   The Landlord may impose any or all of the following
                        conditions on giving any consent for an assignment by
                        the Tenant and any such consent is to be treated as
                        being subject to each of the following:-

                        (i)   A condition if reasonably so required by the
                              Landlord on an assignment to a limited company
                              that the assignee must ensure that at least two
                              directors of the company or some other guarantor
                              or guarantors acceptable to the Landlord enter
                              into direct covenants with the Landlord in such
                              form as the Landlord shall specify.

                        (ii)  A condition that if at any time before the
                              assignment the circumstances specified in clause
                              (c) above or any one of them apply the Landlord
                              may revoke the consent by written notice to the
                              Tenant.




                                       31
<PAGE>

            (c)   not to grant a permitted sublease with a fine or premium and
                  to grant it on similar terms to this Lease containing
                  provisions:-

                  (1)   Prohibiting the sub-tenant from doing or allowing
                        anything in relation to the Land inconsistent with or in
                        breach of the provisions of this Lease.

                  (2)   For re-entry by the sub-landlord on breach of any
                        covenant by the sub-tenant imposing an absolute
                        prohibition against all dealings with the premises other
                        than an assignment.

                  (3)   Requiring the assignee on any assignment of the sublease
                        to enter into direct covenants with the Landlord in such
                        form as the Landlord shall require.

                  (4)   Prohibiting the sub-tenant from holding on trust for
                        another or permitting another to share or occupy the
                        whole or any part of the Land.

                  (5)   Imposing in relation to any permitted assignment the
                        same obligations for registration with the Landlord as
                        are contained in this Lease in relation to dispositions
                        by the Tenant.

            (d)   before any permitted subletting, to ensure that the sub-tenant
                  enters into a direct covenant with the Landlord that during
                  the period of the sublease the sub-tenant will observe and
                  perform the Tenant's covenants contained in this Lease.

     NOTICE OF ASSIGNMENT & SUB-LETTING

         (vii)    save in respect of the floating Charge under the Tenant's
                  existing Debenture granted to the Royal Bank of Canada or any
                  Debenture replacing it, to give notice to the Landlord within
                  one month after any transaction under Clause 3(vi) or any
                  charge over this Lease, supplying a copy of the instrument.

     TELEPHONE AND ELECTRICITY AND OTHER SERVICES

         (viii)   to pay to the suppliers or reimburse the Landlord for its due
                  proportion of (as the case may be) all charges for the
                  installation of telephones (if required) and all bills for
                  their use and pay to the suppliers or reimburse the Landlord
                  for its due proportion of (as the case may be) all charges for
                  the use of electricity and all other services on the Land.

     COMPLY WITH LAWS

         (ix)     to comply as if it were the freeholder with the legitimate
                  requirements of any authority relating to the Land; and to
                  give the Landlord promptly a copy of any permission, notice or
                  order relating to the Land which any authority serves on or
                  issues to the Tenant; and, if the Landlord requires, to make
                  either alone or jointly with the Landlord objections or
                  representations against the notice or order as the Landlord
                  directs.

     LICENCES

         (x)      to obtain and whenever necessary renew all licences and make
                  all returns which are necessary to enable it to operate its
                  business and to pay all licence and other annual fees when
                  they fall due.



                                       32
<PAGE>

     INSURANCE

        (xi)      to pay for all insurance effected by the Tenant, and not to
                  insure the RO Area against any risk which the Landlord insures
                  against; and to insure against public liability in respect of
                  injury or damage to persons when on the Land in an amount of
                  not less than One Million United States Dollars
                  (US$1,000,000.00) per accident.

     GIVE UP POSSESSION

        (xii)     subject to Clause 5(ii)(b), to leave the Land when this Lease
                  ends clean and secure in every respect and in repair in
                  accordance with the Tenant's obligations in this Lease.

     INDEMNITY

        (xiii)    to keep the Landlord, Hyatt Corporation and Hyatt Britannia
                  Corporation, Ltd., as agent of Cayman Hotel & Golf Club
                  Partnership, an Ontario Limited Partnership, d/b/a Hyatt
                  Regency Grand Cayman, fully indemnified against all losses
                  arising directly or indirectly out of any act, omission or
                  negligence of the Tenant or any persons at the Land or the
                  Common Areas expressly or impliedly with his authority or out
                  of any breach or non-observance by the Tenant of the
                  covenants, conditions or other provisions of this Lease or any
                  other matters to which this Lease is subject.

     INTEREST ON ARREARS

        (xiv)     to pay interest at the rate of 3% above the prime lending rate
                  of Barclays Bank Plc from time to time on any sums due under
                  this Lease that are not paid when due whether formally
                  demanded or not. Nothing in this clause entitles the Tenant to
                  withhold or delay any payment of sum due under this Lease or
                  affects the rights of the Landlord in relation to any
                  non-payment.

     ENVIRONMENTAL PROTECTION

        (xv)(a)   not to cause or permit any noxious or offensive emissions from
                  any apparatus on the Land.

            (b)   not to permit any oil or grease or any deleterious
                  objectionable, noxious, dangerous, poisonous or explosive
                  matter or substance to be discharged into any of the Conduits
                  and take all measures to ensure that any effluent discharged
                  into the Conduits does not harm the environment or corrode or
                  otherwise harm the Conduits or cause any obstruction or
                  deposit in them.

            (c)   to take all practical precautions to ensure that no noxious
                  substances are spilled or deposited on the Land and that
                  contamination does not occur.

            (d)   within 14 days of the spilling or deposit on the Land of any
                  noxious substance in a quantity that may cause serious damage
                  to or pollution of the environment or serious damage to
                  property or serious harm to human health, to inform the
                  Landlord of this and permit him to enter and inspect the Land.


                                       33
<PAGE>

            (e)   to indemnify the Landlord and keep him indemnified against any
                  losses in respect of damage to or pollution of the environment
                  or damage to property or harm to human health caused by the
                  Tenant's operations on the Land whether in liquid or solid
                  form or in the form of gas or vapour.

            For the purposes of this sub-clause, the expression "Conduits" does
            not include conduits which are part of the Plant.

      ROOF AND FLOOR LOADING

        (xvi)     not to bring into the RO Area any machinery or other articles
                  that will or may strain or damage the Building or any part of
                  it.

4.    LANDLORD'S AGREEMENTS

      The Landlord agrees with the Tenant:-

      QUIET ENJOYMENT

        (i)       that if the Tenant complies with all its agreements and
                  obligations it will, subject to the terms of this Lease and
                  subject to the rights reserved to the Landlord under this
                  Lease, occupy the Land during this Lease free from disturbance
                  and without any interruption by the Landlord or any person
                  rightfully claiming under or in trust for it.

      INSURANCE

        (ii)      to insure the Building with a reputable insurance company.

      REPAIR

        (iii)     to put and keep the Building in good repair (except in respect
                  of repairs for which the Tenant is responsible).

      INDEMNITY

        (iv)      to keep the Tenant, its servants, agents and visitors fully
                  indemnified against all losses arising directly or indirectly
                  out of any act, omission or negligence of the Landlord or any
                  persons at the Land or the Common Areas expressly or impliedly
                  with his authority or out of any breach or non-observance by
                  the Landlord of the covenants, conditions or other provisions
                  of this Lease or any other matters to which this Lease is
                  subject.

      ENVIRONMENTAL PROTECTION

        (v)(a)    not to cause or permit any noxious or offensive emissions from
                  any apparatus in the Landlord's Building.

           (b)    not to permit any oil or grease or any deleterious
                  objectionable, noxious, dangerous, poisonous or explosive
                  matter or substance to be discharged into any of the Conduits





                                       34
<PAGE>

                  and take all measures to ensure that any effluent discharged
                  into the Conduits does not harm the environment or corrode or
                  otherwise harm the Plant or cause any obstruction or deposit
                  in any of the Conduits forming part of it.

            (c)   to take all practical precautions to ensure that no noxious
                  substances are spilled or deposited on the Land and that
                  contamination does not occur.

            (d)   within 14 days of the spilling or deposit on the Land of any
                  noxious substance in a quantity that may cause serious damage
                  to or pollution of the environment or serious damage to
                  property or serious harm to human health, to inform the Tenant
                  of this.

            (e)   to indemnify the Tenant and keep it indemnified against any
                  losses in respect of damage to or pollution of the environment
                  or damage to property or harm to human health caused by the
                  Landlord's operations in the Landlord's Building or the
                  Adjoining Land whether in liquid or solid form or in the form
                  of gas or vapour.

5.    IT IS AGREED:-

      LANDLORD'S RIGHTS

        (i) The rights set out below are excepted and reserved from the Lease in
            favour of the Landlord and all others now entitled or who may become
            entitled:-

            (a)   The free and uninterrupted passage and running of all
                  appropriate services and supplies from and to other parts of
                  the Adjoining Property and the Landlord's Building in and
                  through any Conduits other than those forming part of the
                  Plant.

            (b)(i)      The right to construct and maintain at any time during
                        the Term any pipes, sewers, drains, mains, ducts,
                        conduits, gutters, watercourses, wires, cables,
                        channels, flues and all other conducting media including
                        any fixings and ancillary apparatus for the benefit of
                        any part of the Adjoining Property and the Landlord's
                        Building making good any damage caused by the exercise
                        of the right.

               (ii)     The right to relocate any existing pipes, sewers,
                        drains, mains, ducts, gutters, watercourses, channels,
                        flues and other conducting media other than those
                        forming part of the Plant in any manner whatsoever.

            (c)   The right for the Landlord and all persons expressly or by
                  implication authorised by it to pass and repass to and from
                  the Adjoining Property at all times for all purposes connected
                  with the use and enjoyment of the Landlord's Building.

            (d)   The right to enter or in emergency to break into and enter the
                  Land at any time during the Term at reasonable times and on
                  reasonable notice except in emergency:-

                (i)     To inspect, clean, connect with, repair, remove, replace
                        with others, alter or execute any works whatever to or
                        in connection with the conduits, easements or services
                        referred to in this Clause 5.

                (ii)    To carry out work or do anything whatsoever that the
                        Landlord is obliged to do under this Lease.


                                       35
<PAGE>

                (iii)   To exercise any of the rights granted to the Landlord by
                        this Lease.

            (e)   The right to erect scaffolding for the purposes of inspecting,
                  repairing or cleaning the Building.

            (f)   The rights of light, air, support, shelter, protection and all
                  other easements and rights at the date of this Lease belonging
                  to or enjoyed by other parts of the Building or any other
                  buildings and any Adjoining Property.

            (g)   For the right and liberty at any time after the date of this
                  Lease, to alter, raise the height of or rebuild any building
                  on any Adjoining Property.

            (h)   The right for the Landlord and the lessees and occupiers for
                  the time being of the Landlord's Building at all times with or
                  without motor vehicles to pass and repass along and over the
                  Right of Way to and from the Adjoining Property during the
                  Term but the Landlord will keep the Tenant indemnified from
                  and against any act, loss, damage or liability suffered by the
                  Tenant in the exercise of the rights in this sub-clause (h).

     TENANT'S RIGHTS

        (ii)(a)   the Tenant and its servants, agents and visitors have the
                  right to share the use of:-

                  o     a right of access 12 feet wide with or without vehicles
                        and equipment to well pump #1 shown on the Plan and
                        including an area 10 feet in radius from the centre of
                        the well head;

                  o     the Common Areas to get to and from the Land with or
                        without motor vehicles;

                  o     the conduits in the Building which serve the RO Area;

            (b)   on or at any time before termination of this Lease for any
                  reason (including under Clause 5(iv)), the Tenant may detach
                  all items affixed to the Land and used for the purposes of its
                  business and remove them without interference by the Landlord.
                  In the case of termination by expiry of the Term, the Tenant
                  must complete the detachment and removal by the end of the
                  Term, but in case of termination for any other reason
                  (including under Clause 5(iv)), the Tenant will have an
                  additional thirty (30) days after termination during which it
                  will be entitled to enter on the Land with or without vehicles
                  and workmen to detach and remove those items. In either case,
                  the Tenant must do as little damage to the Property as
                  possible during such detachment and removal but otherwise has
                  no obligation to repair or restore the Land or any building on
                  it after completion of the detachment and removal.

     TERMINATION ON DAMAGE

        (iii)(a)  If and whenever the Building or any part of it is damaged or
                  destroyed and payment of the insurance money is not wholly or
                  partly refused because of any act or default of the Tenant or
                  anyone at the Building or on the Land expressly or by
                  implication with his authority the Landlord must use his
                  reasonable endeavours to obtain all





                                       36
<PAGE>

                  planning permissions or other permits and consents
                  ("permissions") that are required under the planning laws or
                  otherwise to enable him to rebuild and reinstate the Building.

            (b)   Subject to the provisions of clause (c) and, if any
                  permissions are required, after they have been obtained the
                  Landlord must as soon as reasonably practicable apply all
                  money received in respect of the insurance in rebuilding or
                  reinstating the Building.

            (c)   The Landlord need not rebuild or reinstate the Building if and
                  for so long as rebuilding or reinstatement is prevented
                  because:-

                  (i)   the Landlord despite using his reasonable endeavours
                        cannot obtain any necessary permission.

                  (ii)  any permission is granted subject to a condition with
                        which it is unreasonable to expect the Landlord to
                        comply.

                  (iii) there is some defect or deficiency on the site on which
                        the rebuilding or reinstatement is to take place that
                        means it can only be undertaken at a cost that is
                        unreasonable in all the circumstances.

                  (iv)  it is unable to obtain access to the Land to rebuild or
                        reinstate.

                  (v)   of any other circumstances beyond the Landlord's
                        control.

            (d)   If at the end of the period of one year commencing on the date
                  of damage or destruction the Building is still not fit for the
                  Tenant's occupation and use either the Landlord or the Tenant
                  may by notice served at any time within three months of the
                  end of that period terminate this Lease and upon service of
                  such notice the Term is to cease absolutely but without
                  prejudice to any rights or arrears that may have accrued to
                  either party for breach of the terms of this Lease including
                  this Clause 5(iii) and all money received in respect of the
                  insurance effected by the Landlord is to belong to the
                  Landlord absolutely.

     TERMINATION

        (iv)  If and whenever during the Term:-

            (a)   the Tenant breaches any of the covenants or conditions of this
                  Lease and any such breach is not remedied within thirty (30)
                  days of receipt of notice of any such breach from the
                  Landlord;

            (b)   the Tenant being an individual becomes bankrupt or being a
                  company enters into liquidation either compulsorily or
                  voluntarily (except for the purpose of reconstruction or
                  amalgamation);

            (c)   the Tenant enters into any arrangement or composition for the
                  benefit of its creditors;

            (d)   any distress or execution is levied on the Tenant's goods and
                  is not remedied within thirty (30) days of the date of the
                  levying of any such distress or execution;



                                       37
<PAGE>

            (e)   the Tenant is unable to pay its debts within the meaning of
                  The Companies Law (2001 Second Revision) or any amendment,
                  alteration or re-enactment of it; or

            (f)   the Water Supply Agreement is lawfully terminated by the
                  Landlord

            then the Landlord may at any time, and despite the waiver of any
            previous right of entry, enter the Land or any part of it in the
            name of the whole so ending this Lease, but without prejudice to any
            rights or remedies which may have accrued to the Landlord under it.

     INSPECTION OF POLICIES

      (v)   the Landlord and the Tenant each has the right to inspect the
            insurance policies issued to the other pursuant to this Lease.

     MAKE GOOD DAMAGES

      (vi)  the Landlord must make good any damage done when exercising its
            rights, except to the extent that the damage results from the
            Tenant's negligence or breach of obligation; but the Landlord will
            not be liable for any inconvenience or consequential loss resulting
            from the exercise of its rights.

     ACCIDENT & INJURY

      (vii) the Landlord will not be responsible to the Tenant for any accident
            or injury to any individual or for damage to or loss of any goods or
            other property sustained on the Land unless the accident or injury
            results from the negligence of the Landlord or its agents.

     NEGLECT & FORBEARANCE

      (viii) no neglect, forbearance or omission by the Landlord to take
            advantage of or enforce any right or privilege arising out of any
            breach by the Tenant (whether original or recurring) of any
            obligation (express or implied) will operate as or be deemed to be a
            general waiver of the its entitlement to take advantage of or
            enforce that right or privilege.

     TENANT'S FAILURE TO INSURE

      (ix)  if the Tenant at any time does not insure in accordance with its
            obligations under this Lease, the Landlord may do so and the Tenant
            must pay on demand any money which the Landlord spends for that
            purpose.

     REGISTERED LAND LAW

      (x)   the terms of this Lease, where inconsistent with the provisions of
            The Registered Land Law, will where permitted by law prevail; and
            the covenants implied by sections 52 and 53 of the Registered Land
            Law are excluded.




                                       38
<PAGE>

     RIGHT TO SELL

     (xi)   if after the Tenant has vacated the Land at the end of this Lease
            any of the Tenant's property remains in the RO Area and the Tenant
            does not remove it within the thirty (30) days referred to in Clause
            5(ii)(c), the Landlord may as the Tenant's agent sell that property
            and after deducting from the proceeds of sale the costs and expenses
            of removal storage and sale, the Landlord will hold the balance to
            the Tenant's order; and the Tenant must indemnify the Landlord
            against any liability which it incurs to any third party whose
            property the Landlord sells in good faith and in the mistaken belief
            (which will be assumed unless the contrary is proved) that the
            property belonged to the Tenant.

     NO REPRESENTATIONS

     (xii)  this Lease contains the entire agreement between the parties; each
            party acknowledges that it has not entered into this Lease in
            reliance wholly or partly on any statement or representation made by
            or on behalf of the other unless it is expressly set out in this
            Lease.

     EXCEPTIONS

     (xiii) despite anything to the contrary in this Lease, the Tenant has no
            responsibility to repair or maintain or in any way to take care of
            the Landlord's Building or the Common Areas.

     NOTICES

      (xiv) a notice or other document will be deemed to be duly served by a
            party either delivering or sending it by prepaid registered mail
            addressed to the other party at the address stated at the beginning
            of this Lease or to its registered office or last-known address. The
            notice or other document will be deemed to be received by the other
            party on delivery or seventy-two (72) hours after posting, as the
            case may be.

     GOVERNING LAW

      (xv)  this Lease is governed by and must be construed in accordance with
            the laws of the Cayman Islands and the parties agree to submit to
            the jurisdiction of the courts of the Cayman Islands.





                                       39
<PAGE>

                                  THE SCHEDULE

                                    THE PLANT


1     SEAWATER REVERSE OSMOSIS PLANT SKID #4 COMPRISED OF:

            CARTRIDGE FILTER
            Brand Name:                           No Name Plate
            Model #:                              NA
            Serial #:                             NA

            HIGH PRESSURE PUMP
            Brand Name:                           WHEATLEY
            Model #:                              HP165M
            Serial #:                             12834

            MOTOR
            Brand Name:                           TOSHIBA (HOUSTON)
            Model #:                              B-1254FLA4UD
            Serial #:                             AB54699-1

            ENERGY RECOVERY TURBINE
            Brand Name:                           CALDER
            Model #:                              PT8650 E1 (or) NP4840/A
            Serial #:                             NA

            MEMBRANE ELEMENT HOUSINGS
            Description:                          23 Housings and element-single
                                                  element per housing
            Membranes                             Dupont

            DRAW BACK TANK
            WATER METER
            CONTROL PANEL

2     SEAWATER REVERSE OSMOSIS PLANT SKID #5 COMPRISED OF:


            CARTRIDGE FILTER
            Brand Name:                           EXCEL
            Model #:                              30EFCS3-3C150
            Serial #:                             NA

            HIGH PRESSURE PUMP
            Brand Name:                           WHEATLEY
            Model #:                              HP165M
            Serial #:                             NA

            MOTOR
            Brand Name:                           SIEMENS
            Order #:                              2-312-LR91633-2
            Serial #:                             NA

            ENERGY RECOVERY TURBINE
            Brand Name:                           CALDER
            Model #:                              PT8650 E1 (or) NP4840/A
            Serial #:                             NA

            MEMBRANE ELEMENT HOUSINGS
            Description:                          12 twin housings-PERMASEP
            Membranes                             Dupont

            DRAW BACK TANK
            WATER METER
            CONTROL PANEL


                                       40
<PAGE>

3     SEAWATER REVERSE OSMOSIS PLANT SKID #6 COMPRISED OF:

            CARTRIDGE FILTER
            Brand Name:                           OSMONICS
            Model #:                              HX1620-3 OT-PVC-D
            Serial #:                             96-A49103-1

            HIGH PRESSURE PUMP
            Brand Name:                           WHEATLEY
            Model #:                              HP165AM  /29613-B
            Serial #:                             22747

            MOTOR
            Brand Name:                           SIEMENS
            Order #:                              2-5106-LR90303-1
            Serial #:                             NA

            ENERGY RECOVERY TURBINE
            Brand Name:                           CALDER
            Model #:                              RO-4034 1390 15
            Serial #:                             NA

            MEMBRANE ELEMENT HOUSINGS
            Description:                          20 B-10 PERMASEP Housings-one
                                                  membrane per housing
            Membranes                             DUPONT

            DRAW BACK TANK
            WATER METER
            CONTROL PANEL

4     SEAWATER REVERSE OSMOSIS PLANT SKID #7 COMPRISED OF:

            CARTRIDGE FILTER
            Brand Name:                           EXCEL
            Model #:                              30EFCS3-3C150
            Serial #:                             NA

            HIGH PRESSURE PUMP
            Brand Name:                           WHEATLEY
            Model #:                              HP165AM  /29613-B
            Serial #:                             23852

            MOTOR
            Brand Name:                           TICO AMERICA
            Model #:                              NA
            Serial #:                             NA



                                       41
<PAGE>

            ENERGY RECOVERY TURBINE
            Brand Name:                           CALDER
            Model #:                              RO-290-40
            Serial #:                             021-97-A2316

            MEMBRANE ELEMENT HOUSINGS
            Description:                          1) 4 Triples (3 membranes per
                                                     housing), no name brand on
                                                     housings

                                                  2) 2 Doubles(2 membranes per
                                                     housing), PERMASEP
            Membranes                             DUPONT

            DRAW BACK TANK
            WATER METER
            CONTROL PANEL

5     POTABLE WATER OZONATION SYSTEM COMPRISED OF:

            AIR COMPRESSOR PACKAGE
            Brand Name:                           INGERSOLL RAND
            Model #:                              SS-EP15
            Serial #:                             LX0230U98043

            AIR COMPRESSOR MOTOR
            Brand Name:                           US ELECTRIC MOTOR DIVISION OF
                                                  EMERSON ELECT CO.
            Model #:                              T589A
            ID #:                                 B01A339RO65F



            MOISTURE SEPARATOR
            Brand Name:                           THERMAL TRANSFER PRODUCTS
            Model #:                              S-100-AD
            ID #:                                 S-6019

            REFRIGERATED DRYER
            Brand Name:                           INGERSOLL RAND
            Model #:                              DXR50
            Serial #:                             97LDXR5563

            OXYGEN CONCENTRATOR
            Brand Name:                           AIRSEP-NATL BD 72602K-
                                                  CERTIFIED BY BRUNNER ENG
                                                  & MFG INC.

            Model #:                              AS-160/250/450
            Serial #:                             NA



                                       42
<PAGE>

            OXYGEN RECEIVER
            Brand Name:                           NATL.BD NO.182314-CERTIFIED
                                                  BY STEEL FAB ABINGDON VA.
            PART #:                               CRN C7228.1C
            Serial #:                             NA

            OZONE GENERATOR
            Brand Name:                           OSMONICS
            Model #:                              HC-5
            Serial #:                             NA

            OZONE INJECTOR MOTOR
            Brand Name:                           BALDOR
            Cat#:                                 JWMDM3616T
            Serial #:                             NA

            CENTRIFUGAL PUMP(OZONE INJECTOR)
            Brand Name:                           WAUKESHA CHERRY BURRELL
            Model #:                              U2065
            Serial #:                             2200989

            DISSOLVED OZONE MONITOR
            Brand Name:                           OREC/OSMONICS
            Model #:                              NA
            Serial #:                             NA

            AC DRIVE
            Brand Name:                           MEGNETEK
            Model #:                              GPD 506   N12-506V-B014
            Serial #:                             34469


6     HIGH SERVICE WATER DISTRIBUTION PUMP SYSTEM COMPRISED OF:

            DWPO4
            CENTRIFUGAL PUMP
            Brand Name:                           PEERLESS PUMP COMPANY
            Model #:                              C820AM
            Serial #:                             152587B

            THREE PHASE INDUCTION MOTOR
            Brand Name:                           BALDOR
            Cat #:                                JMM2514T
            Spec #:                               39K35W525



                                       43
<PAGE>

            DWPO5
            CENTRIFUGAL PUMP
            Brand Name:                           PEERLESS PUMP COMPANY
            Model #:                              C820AM
            Serial #:                             152587A

            THREE PHASE INDUCTION MOTOR
            Brand Name:                           BALDOR
            Cat #:                                JMM2514T
            Spec #:                               39K35W528

            DWPO7
            CENTRIFUGAL PUMP
            Brand Name:                           PEERLESS PUMP COMPANY
            Model #:                              C820AM
            Serial #:                             152587C

            THREE PHASE INDUCTION MOTOR
            Brand Name:                           US ELECTRICAL MOTORS
            Model #:                              E685A
            Serial #:                             BO1A287RR087F

7     DOMESTIC WATER TRANSFER PUMP SYSTEM COMPRISED OF:

           CWP01
           CENTRIFUGAL PUMP
           Brand Name:                            PEERLESS PUMP COMPANY
           Model #:                               820A
           Serial #:                              TI57490

           THREE PHASE INDUCTION MOTOR
           Brand Name:                            BALDOR
           Model #:                               JMM3314T
           Spec #:                                37F196X48


           CWP02
           CENTRIFUGAL PUMP
           Brand Name:                            PEERLESS PUMP COMPANY
           Model #:                               C825AM
           Serial #:                              171953

           THREE PHASE INDUCTION MOTOR
           Brand Name:                            BALDOR
           Model #:                               JMM3314T
           Spec #:                                37F196X48

                                       44
<PAGE>

8     TRANSFER PUMP TO OZONATION SYSTEM COMPRISED OF:

            CENTRIFUGAL PUMP
            Brand Name:                           AMPCO
            Model #:                              3 x 2 1/2 ZC2
            Serial #:                             CC16867-1-1

            THREE PHASE INDUCTION MOTOR
            Brand Name:                           BALDOR
            Model #:                              NA
            Spec #:                               07H167W06

9     IRRIGATION TRANSFER PUMP SYSTEM COMPRISED OF:

            IRP01
            CENTRIFUGAL PUMP
            Brand Name:                           PAC_SEAL
            Model #:                              4P940
            Motor Reference #:                    G40444/F96Z120R169F

            THREE PHASE INDUCTION MOTOR
            Brand Name:                           DAYTON
            Model #:                              9N114
            Motor Reference #:                    G40444/F96Z120R169F

            CWP02
            TRANSFER PUMP TO TANK
            Brand Name:                           PEERLESS PUMP COMPANY
            Model #:                              C825AM
            Serial #:                             171953


            THREE PHASE INDUCTION MOTOR
            Brand Name:                           BALDOR
            Model #:                              JMM3314T
            Spec #:                               37F196X48


10    POTABLE WATER DEGASSIFIER COMPRISED OF:

            Brand Name:                           DELEOCH
            Model #:                              NA
            Serial #:                             NA

            BLOWER MOTOR #1
            SINGLE PHASE INDUCTION MOTOR
            Brand Name:                           BALDOR
            Model #:                              VL313
            Serial #:                             NA



                                       45
<PAGE>

            BLOWER MOTOR #2
            THREE PHASE INDUCTION MOTOR
            Brand Name:                           GE MOTORS & INDUSTRIAL SYSTEMS
            Model #:                              5K49ZN2189
            Serial #:                             NMLI42677

11    SEAWATER WELLS AND SUBMERSIBLE PUMPS COMPRISED OF:

            WP #2
            FEEDWATER WELL, CASING AND WELL
            HEAD APPURTENANCES SUBMERSIBLE PUMP
            Brand Name:                           JACUZZI
            Model #:                              S6175-2
            Serial #:                             92611702

            THREE PHASE MOTOR
            Brand Name:                           FRANKLIN
            Model #:                              236 6119 020
            Serial #:                             99g19-14-0014

            WP #4
            FEEDWATER WELL, CASING AND WELL
            HEAD APPURTENANCES SUBMERSIBLE PUMP
            Brand Name:                           GRUNFOS
            Model #:                              300S75-2
            Serial #:                             14B70002

            THREE PHASE MOTOR
            Brand Name:                           FRANKLIN
            Model #:                              236 6119 020
            Serial #:                             NA


            WP #5
            FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
            SUBMERSIBLE PUMP
            Brand Name:                           GRUNFOS
            Model #:                              300S75-2
            Serial #:                             NA

            THREE PHASE MOTOR
            Brand Name:                           FRANKLIN
            Model #:                              236 6119 020
            Serial #:                             NA



                                       46
<PAGE>

            WP #6
            FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
            SUBMERSIBLE PUMP
            Brand Name:                           GRUNFOS
            Model #:                              300S75-2
            Serial #:                             14B70002

            THREE PHASE MOTOR
            Brand Name:                           FRANKLIN
            Model #:                              236 6119 020
            Serial #:                             NA

12    EMERGENCY DIESEL POWERED GENERATOR COMPRISED OF:

            EMERGENCY GENERATOR ENGINE
            Brand Name:                           KOMATSU LTD
            Model #:                              6491
            Serial #:                             14448

            EMERGENCY GENERATOR
            Brand Name:                           ONAN 60
            Model #:                              60 ODVB-15R/30083B
            Serial #:                             B850750776

            FUEL INJECTION PUMP
            Brand Name:                           DIESEL KIKI
            ASSY  #:                              6207-71-1410
            Serial #:                             450K327320

            MAGNETIC DRIVER
            Brand Name:                           NIKKO ELECT IND CO LTD
            Model #:                              600-815-5560
            Serial #:                             0-47100-3720


13    BOLTED STEEL 816,000 US GALLON POTABLE WATER TANK

            Brand Name:                           Florida Aquastore, Inc.
            Model #:                              NA
            Serial #:                             NA

14    ALL INTERCONNECTING PIPING, CONDUITS AND APPURTENANCES, ABOVE THE GROUND
      WHICH CONNECT ITEMS 1 THROUGH 13 TO EACH OTHER, AND TO THE WATER PIPE, AND
      WHICH DIRECTLY FACILITATE THE OPERATION AND MAINTENANCE OF ITEMS 1 THROUGH
      13.


15    ALL ELECTRICAL EQUIPMENT AND COMPONENTS WHICH CONNECT ITEMS 1 THROUGH 13
      TO EACH OTHER AND TO THE MAIN ELECTRICAL SERVICE IN THE RO BUILDING.

16    ALL CONTROLS AND INSTRUMENTATION ATTACHED TO ITEMS 1 THROUGH 13.

17    ALL TOOLS SPECIFIC TO THE MAINTENANCE OR OPERATION OF THE PLANT.

18    ALL LABORATORY AND TESTING EQUIPMENT USED TO MONITOR WATER PRODUCED BY THE
      PLANT.


                                       47
<PAGE>

19    ALL DRAWINGS, SCHEDULES, OPERATION AND MAINTENANCE MANUALS FOR ITEMS 1
      THROUGH 18.

20    ALL OFFICE EQUIPMENT CURRENTLY LOCATED WITHIN THE RO BUILDING AND USED BY
      THE STAFF OF THE PLANT.

21    ALL SPARE PARTS FOR ITEMS 1 THROUGH 18, STORED MATERIALS SUCH AS CHEMICALS
      AND LUBRICANTS HELD IN STOCK AT THE TIME OF CLOSING.





THE COMMON SEAL of CAYMAN       )          CAYMAN HOTEL & GOLF INC.
HOTEL & GOLF INC. was hereunto  )
affixed by                      )
Director and by                 )
   Director/Secretary           )
by authority of the Board       )
   of Directors in              )         Per:___________________________
the presence of:-               )                     Director
                                )
                                )
____________________________    )         Per:___________________________
Notary Public                                     Director/Secretary



THE COMMON SEAL of              )        CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER CO. LTD.     )
was hereunto affixed by         )
Director, and by                )        Per:___________________________
    Director/Secretary          )                     Director
by authority of the Board of    )
    Directors in                )
the presence of:-               )
                                )
_____________________________   )        Per:___________________________
Notary Public                                     Director/Secretary




                                       48
<PAGE>




                               THE FIFTH SCHEDULE


                      BRITANNIA RESORT STRATA CORPORATIONS


AN AGREEMENT made the _____ day of _______________, 200__,


BETWEEN:          CONSOLIDATED WATER CO. LTD., a Cayman company ("CWC")


AND:              ________________________________________,
                  ("the Consumer")


THE PARTIES AGREE that:-

1.    CWC will during the subsistence of its licence so to do from the
      Government of the Cayman Islands or an extension or renewal of it ("the
      Licence") supply potable water by pipe to the Consumer's property
      described in the First Schedule ("the Property") on the terms and
      conditions specified in this Agreement and in the Second Schedule.

2.    For the purpose of this Agreement, the Consumer is deemed to be the owner
      or his agent of the Property. The Consumer must settle bills of account
      for the supply of water within the prescribed periods.

      CWC must bill the Consumer monthly for water supplied. The Consumer must
      pay invoices in full on the later of:-

      a.    ten (10) days after the invoice date, or

      b.    the 21st day of the month following the month in respect of which
            the invoice relates.

      The Consumer must pay interest on overdue amounts at the rate of 1 1/2%
      per month calculated from the due date to the date of payment, with
      monthly rests.

      If the Consumer fails to pay any invoice in full within the greater of ten
      (10) days and such other period as may be required by the Licence, CWC may
      disconnect the Property from its water supply. On payment in full of the
      invoice and any interest due together with the reconnection fee set out in
      the Second Schedule, CWC will at the Consumer's request reconnect the
      water supply to the Property.

3.    CWC must supply at least one main meter to the Property in accordance with
      Clause 7. The Consumer may supply and install individual meters within the
      Property. CWC will bill the Consumer based on the readings of the main
      meter or meters and it will be the Consumer's responsibility to deal with
      any tenants. The Consumer's attention is drawn to the provisions of the
      Water (Production and Supply) Law set out in the Second Schedule.



                                       49
<PAGE>

4.    CWC need not supply water if there is any deficiency in CWC's source of
      supply of water due to any contingency affecting its machinery and works
      or due to any accidental or other interruption of its water supply.

5.    CWC will have such rights of access to the Property as are necessary for
      constructing, maintaining and operating its water supply BUT it must
      repair any damage done by its servants or agents in the exercise of those
      rights of access.

6.    The Consumer must pay CWC, at its offices at Trafalgar Place, West Bay
      Road, P.O. Box 1114 GT, Grand Cayman, or any other place provided by CWC
      for the purpose from time to time, for water supplied at the rates
      specified in the Second Schedule and in this Agreement adjusted annually
      as provided in this Agreement. The Consumer is also subject to the minimum
      monthly charges specified in the Second Schedule and must pay minimum
      charges even if it makes no use at all of CWC's water supply or if it uses
      less than the specified minimum quantity per month. For the purposes of
      this Agreement and until individual meters for each property are
      installed, the water supplied to the Consumer is deemed to be the amount
      of water shown by the meter to the Property less the amount of water shown
      by the meter to the adjoining property to the East (if any) within the
      Britannia Resort.

7.    CWC must furnish, fix and maintain in good repair a meter or meters for
      determining the quantity of water used by the Consumer. The Consumer must
      pay the rental specified in the Second Schedule for the use of the meter
      or meters, which will remain the property of CWC. If any meter is damaged
      by the Consumer, its servants, agents or invitees, CWC will repair or
      replace the meter but at the Consumer's expense. The Consumer is liable
      for the cost of all water computed in accordance with Clause 6 unless the
      meter to the Property or those to the adjoining property immediately to
      the East (if any) within the Britannia Resort are found to be defective
      after a complaint by the Consumer to CWC. CWC will charge the Consumer for
      water used based on the average water consumption of the previous twelve
      (12) months when the defective meter was working, pro rata for the period
      when the meter was not recording correctly or not recording at all.

8.    (1)   CWC must lay the necessary water lines to the boundary of the
            Property at a location to be determined by CWC. The Consumer must
            pay the cost of connecting the Property to CWC's line. The
            connections must be made by or under the supervision of an employee
            of CWC.

      (2)   To the extent necessary to enable CWC to provide water to properties
            to the East of the Property, the Consumer grants the right in
            perpetuity to CWC to use such of the pipes, valves, meters and other
            attached equipment and ancillary pipework on or under the Property
            as are necessary for this purpose ("the Pipework") and to enter on
            the Property at any time with or without vehicles and equipment for
            the purpose of maintaining, repairing and, if necessary, replacing
            any part of the Pipework.

      (3)   The Consumer must not interfere with the Pipework, CWC water mains,
            control valves or meters and must not connect any water pump or
            other apparatus direct to the Pipework or any water line provided by
            CWC at any time.

9.    All pipes for water supply on the Property must be fitted at the meter
      with screw-down shut-off valves or equivalent at the Consumer's expense.



                                       50
<PAGE>

10.   CWC will deliver water to the Property at the pressure, from time to time,
      in its water system. The Consumer must bear the cost of constructing and
      operating storage and pressure boosting facilities on the Property, if
      required.

11.   The quality of water that CWC supplies must be within its present
      standards required by the Licence which are a maximum of 500 mg/L total
      dissolved solids. If at any time Government requires CWC to supply water
      of a higher quality, then CWC will make an appropriate price adjustment to
      the cost of water supplied, which it will agree with Government before
      supplying higher quality water.

12.   On January 1st in each year, CWC will adjust the water charges by the
      formula based on the change in the previous year of the Cayman Islands
      Government Consumer Price Index and the United States Producer Price Index
      for Industrial Commodities as at each September 30th, as set out in the
      Licence. CWC may from time to time without notice to the Consumer increase
      its charges to the extent permitted by the Licence.

13.   The water supply service must be used only by the Consumer or his tenants
      or guests and must not be re-sold or otherwise supplied to third parties,
      either within or outside the boundaries of the Property.

14.   Notwithstanding that CWC has connected any water supply to a hydrant or
      sprinkler system on the Property, it is expressly agreed that CWC will be
      under no obligation to provide water for fire fighting purposes, at any
      time whatever or under any circumstances, and will only supply water for
      those purposes if it is able to do so, and will not be liable for any
      damage to the Property whatever caused by fire or any related cause.

15.   The Consumer may terminate this Agreement at any time by written notice to
      CWC which will be effective only when all money owed to CWC in respect of
      CWC's supply of water to the Property has been paid in full. In
      particular, the Consumer remains responsible under this Agreement unless
      and until he terminates it even after disposal of the Property.

16.   CWC may amend the terms of this Agreement at any time on written notice to
      the Consumer posted to him at his address on CWC's records, but only if
      and to the extent that the new terms do not conflict with the requirements
      of the Licence.

                                 FIRST SCHEDULE

                                  THE PROPERTY


                                       51
<PAGE>



                                 SECOND SCHEDULE

                            SEVEN MILE BEACH SERVICE

                 Minimum water pressure 30 lbs. per square inch.


WATER TARIFF BASE RATES

Rates apply to amounts for the billing period and are exclusive of the Energy
Adjustment Factor provided for by the Licence.

<TABLE>
<S>                                                                   <C>
(1)      Residential consumers using less than 3,000
         U.S. gallons per month                                       CI$17.45 per 1,000 U.S. gallons

(2)      Residential consumers using more than 3,000
         U.S. gallons per month                                       CI$18.76 per 1,000 U.S. gallons

(3)      Commercial/Industrial consumers                              CI$18.76 per 1,000 U.S. gallons

(4)      Public Authority                                             CI$17.45 per 1,000 U.S. gallons

         Minimum Monthly Charge is for 1,000 U.S. gallons.

</TABLE>

METER CHARGES

<TABLE>
<CAPTION>
   SIZE                    MONTHLY RENTAL            CONNECTION FEE                RECONNECTION FEE**
   ----                    --------------            --------------                ----------------
<S>                              <C>                      <C>                             <C>
 20 mm (3/4")                  CI$ 3.50                 CI$ 80.00                       CI$ 50.00
 25 mm (1")                    CI$ 5.00                 CI$120.00                       CI$ 75.00
 38 mm (1 1/2")                CI$ 7.50                 CI$175.00                       CI$110.00
 50 mm (2")                    CI$10.00                 CI$240.00                       CI$150.00
 75 mm (3")                    CI$15.00                 CI$360.00                       CI$225.00
100 mm (4")                    CI$25.00                 CI$560.00                       CI$300.00
150 mm (6")                    CI$40.00                 CI$800.00                       CI$350.00


</TABLE>

** This charge relates to work completed by CWC employees outside the boundaries
of the Property. Any work carried out by CWC employees within the boundaries at
the Consumer's request will be charged to the Consumer at cost plus thirty
percent (30%). Such work will be undertaken entirely at CWC's discretion and
must be previously requested in writing.


PLEASE NOTE:-
===========

Under The Water (Production and Supply) Law, 1979 (Law 15 of 1979), it is
illegal except in certain specified limited circumstances for anyone other than
CWC to supply water for reward within the area licensed to CWC. Further, whoever
unlawfully interferes with CWC's water system or obstructs the execution of any
works by an employee of CWC in his duties as such is guilty of an offence, and
may be liable to be fined or imprisoned in accordance with provisions of the
Law.


<PAGE>



SIGNED by THE CONSUMER in           )
the presence of:-                   )
                                    )
                                    )         --------------------------------
                                    )
- ------------------------------      )
Witness



SIGNED on behalf of                 )          CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER                  )
CO. LTD. in the presence of:-       )
                                    )
                                    )          Per:
- ------------------------------      )               -------------------------
Witness


                               THE SIXTH SCHEDULE


                          BRITANNIA RESORT COMMON AREAS


AN AGREEMENT made the _____ day of _______________, 200__,


BETWEEN:    CONSOLIDATED WATER CO. LTD., a Cayman company ("CWC")


AND:        BRITANNIA ESTATES HOME OWNERS ASSOCIATION LTD.,
            a Cayman Company ("the Consumer")


THE PARTIES AGREE that:-

1.    CWC will during the subsistence of its licence so to do from the
      Government of the Cayman Islands or an extension or renewal of it ("the
      Licence") supply potable water by pipe to the Consumer's property
      described in the First Schedule ("the Property") on the terms and
      conditions specified in this Agreement and in the Second Schedule.

2.    For the purpose of this Agreement, the Consumer is deemed to be the owner
      or his agent of the Property. The Consumer must settle bills of account
      for the supply of water within the prescribed periods.

      CWC must bill the Consumer monthly for water supplied. The Consumer must
      pay invoices in full on the later of:-

            a.    ten (10) days after the invoice date, or

            b.    the 21st day of the month following the month in respect of
                  which the invoice relates.


<PAGE>



            The Consumer must pay interest on overdue amounts at the rate of 1
            1/2% per month calculated from the due date to the date of payment,
            with monthly rests.

            If the Consumer fails to pay any invoice in full within the greater
            of ten (10) days and such other period as may be required by the
            Licence, CWC may disconnect the Property from its water supply. On
            payment in full of the invoice and any interest due together with
            the reconnection fee set out in the Second Schedule, CWC will at the
            Consumer's request reconnect the water supply to the Property.

3.    CWC must supply at least one main meter to the Property in accordance with
      Clause 7. The Consumer may supply and install individual meters within the
      Property. CWC will bill the Consumer based on the readings of the main
      meter or meters and it will be the Consumer's responsibility to deal with
      any tenants. The Consumer's attention is drawn to the provisions of the
      Water (Production and Supply) Law set out in the Second Schedule.

4.    CWC need not supply water if there is any deficiency in CWC's source of
      supply of water due to any contingency affecting its machinery and works
      or due to any accidental or other interruption of its water supply.

5.    CWC will have such rights of access to the Property as are necessary for
      constructing, maintaining and operating its water supply BUT it must
      repair any damage done by its servants or agents in the exercise of those
      rights of access.

6.    The Consumer must pay CWC, at its offices at Trafalgar Place, West Bay
      Road, P.O. Box 1114 GT, Grand Cayman, or any other place provided by CWC
      for the purpose from time to time, for water supplied at the rates
      specified in the Second Schedule and in this Agreement adjusted annually
      as provided in this Agreement. The Consumer is also subject to the minimum
      monthly charges specified in the Second Schedule and must pay minimum
      charges even if it makes no use at all of CWC's water supply or if it uses
      less than the specified minimum quantity per month.

7.    CWC must furnish, fix and maintain in good repair a meter or meters for
      determining the quantity of water used by the Consumer. The Consumer must
      pay the rental specified in the Second Schedule for the use of the meter
      or meters, which will remain the property of CWC. If any meter is damaged
      by the Consumer, its servants, agents or invitees, CWC will repair or
      replace the meter but at the Consumer's expense. The Consumer is liable
      for the cost of all water passing through the meter unless the meter is
      found to be defective after a complaint by the Consumer to CWC. CWC will
      charge the Consumer for water used based on the average water consumption
      of the previous twelve (12) months when the defective meter was working,
      pro rata for the period when the meter was not recording correctly or not
      recording at all.


8.    (1)   CWC must lay the necessary water lines to the boundary of the
            Property at a location to be determined by CWC. The Consumer must
            pay the cost of connecting the Property to CWC's line. The
            connections must be made by or under the supervision of an employee
            of CWC.

      (2)   To the extent necessary to enable CWC to provide water to properties
            to the East of the Property, the Consumer grants the right in
            perpetuity to CWC to use such of the pipes,




<PAGE>

            valves, meters and other attached equipment and ancillary pipework
            on or under the Property as are necessary for this purpose ("the
            Pipework") and to enter on the Property at any time with or without
            vehicles and equipment for the purpose of maintaining, repairing
            and, if necessary, replacing any part of the Pipework.

      (3)   The Consumer must not interfere with the Pipework, CWC water mains,
            control valves or meters and must not connect any water pump or
            other apparatus direct to the Pipework or any water line provided by
            CWC at any time.

9.    All pipes for water supply on the Property must be fitted at the meter
      with screw-down shut-off valves or equivalent at the Consumer's expense.

10.   CWC will deliver water to the Property at the pressure, from time to time,
      in its water system. The Consumer must bear the cost of constructing and
      operating storage and pressure boosting facilities on the Property, if
      required.

11.   The quality of water that CWC supplies must be within its present
      standards required by the Licence which are a maximum of 500 mg/L total
      dissolved solids. If at any time Government requires CWC to supply water
      of a higher quality, then CWC will make an appropriate price adjustment to
      the cost of water supplied, which it will agree with Government before
      supplying higher quality water.

12.   On January 1st in each year, CWC will adjust the water charges by the
      formula based on the change in the previous year of the Cayman Islands
      Government Consumer Price Index and the United States Producer Price Index
      for Industrial Commodities as at each September 30th, as set out in the
      Licence. CWC may from time to time without notice to the Consumer increase
      its charges to the extent permitted by the Licence.

13.      The water supply service must be used only by the Consumer or his
         tenants or guests and must not be re-sold or otherwise supplied to
         third parties, either within or outside the boundaries of the Property.

14.      Notwithstanding that CWC has connected any water supply to a hydrant or
         sprinkler system on the Property, it is expressly agreed that CWC will
         be under no obligation to provide water for fire fighting purposes, at
         any time whatever or under any circumstances, and will only supply
         water for those purposes if it is able to do so, and will not be liable
         for any damage to the Property whatever caused by fire or any related
         cause.

15.      The Consumer may terminate this Agreement at any time by written notice
         to CWC which will be effective only when all money owed to CWC in
         respect of CWC's supply of water to the Property has been paid in full.
         In particular, the Consumer remains responsible under this Agreement
         unless and until he terminates it even after disposal of the Property.

16.      CWC may amend the terms of this Agreement at any time on written notice
         to the Consumer posted to him at his address on CWC's records, but only
         if and to the extent that the new terms do not conflict with the
         requirements of the Licence.



                                 FIRST SCHEDULE

                                  THE PROPERTY


Those Common Areas of the Britannia Resort registered at Registration Section
West Bay Beach South Block 12D Parcels 65, 74 and 77.


<PAGE>


                                 SECOND SCHEDULE

                            SEVEN MILE BEACH SERVICE

                 Minimum water pressure 30 lbs. per square inch.


WATER TARIFF BASE RATES

Rates apply to amounts for the billing period and are exclusive of the Energy
Adjustment Factor provided for by the Licence.

<TABLE>
<S>                                                                     <C>
(1)      Residential consumers using less than 3,000
         U.S. gallons per month                                         CI$17.45 per 1,000 U.S. gallons

(2)      Residential consumers using more than 3,000
         U.S. gallons per month                                         CI$18.76 per 1,000 U.S. gallons

(3)      Commercial/Industrial consumers                                CI$18.76 per 1,000 U.S. gallons

(4)      Public Authority                                               CI$17.45 per 1,000 U.S. gallons

         Minimum Monthly Charge is for 1,000 U.S. gallons.

</TABLE>

METER CHARGES

<TABLE>
<CAPTION>
   SIZE                    MONTHLY RENTAL           CONNECTION FEE         RECONNECTION FEE**
   ----                    --------------           --------------         ------------------
<S>                              <C>                      <C>                     <C>
 20 mm (3/4")                  CI$ 3.50                 CI$ 80.00               CI$ 50.00
 25 mm (1")                    CI$ 5.00                 CI$120.00               CI$ 75.00
 38 mm (1 1/2")                CI$ 7.50                 CI$175.00               CI$110.00
 50 mm (2")                    CI$10.00                 CI$240.00               CI$150.00
 75 mm (3")                    CI$15.00                 CI$360.00               CI$225.00
100 mm (4")                    CI$25.00                 CI$560.00               CI$300.00
150 mm (6")                    CI$40.00                 CI$800.00               CI$350.00

</TABLE>

** This charge relates to work completed by CWC employees outside the boundaries
of the Property. Any work carried out by CWC employees within the boundaries at
the Consumer's request will be charged to the Consumer at cost plus thirty
percent (30%). Such work will be undertaken entirely at CWC's discretion and
must be previously requested in writing.




PLEASE NOTE:-
===========

Under The Water (Production and Supply) Law, 1979 (Law 15 of 1979), it is
illegal except in certain specified limited circumstances for anyone other than
CWC to supply water for reward within the area licensed to CWC. Further, whoever
unlawfully interferes with CWC's water system or obstructs the execution of any
works by an employee of CWC in his duties as such is guilty of an offence, and
may be liable to be fined or imprisoned in accordance with provisions of the
Law.


<PAGE>


SIGNED by THE CONSUMER in       )           BRITANNIA ESTATES HOME
the presence of:-               )           OWNERS ASSOCIATION LTD.
                                )
                                )
                                )           Per:    _________________________
- ------------------------------  )
Witness


SIGNED on behalf of             )           CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER              )
CO. LTD. in the presence of:-   )
                                )
                                )           Per:     _________________________
- ------------------------------  )
Witness


                              THE SEVENTH SCHEDULE


AN AGREEMENT made the _____ day of _______________, 200__,


BETWEEN:          CONSOLIDATED WATER CO. LTD., a Cayman company ("CWC")


AND:              ______________________________________,
                  ("the Consumer")


THE PARTIES AGREE that:-

1.    CWC will during the subsistence of its licence so to do from the
      Government of the Cayman Islands or an extension or renewal of it ("the
      Licence") supply potable water by pipe to the Consumer's property
      described in the First Schedule ("the Property") on the terms and
      conditions specified in this Agreement and in the Second Schedule.

2.    For the purpose of this Agreement, the Consumer is deemed to be the owner
      or his agent of the Property. The Consumer must settle bills of account
      for the supply of water within the prescribed periods.



<PAGE>
      CWC must bill the Consumer monthly for water supplied. The Consumer must
      pay invoices in full on the later of:-

      a.    ten (10) days after the invoice date, or

      b.    the 21st day of the month following the month in respect of which
            the invoice relates.

      The Consumer must pay interest on overdue amounts at the rate of 1 1/2%
      per month calculated from the due date to the date of payment, with
      monthly rests.

      If the Consumer fails to pay any invoice in full within the greater of ten
      (10) days and such other period as may be required by the Licence, CWC may
      disconnect the Property from its water supply. On payment in full of the
      invoice and any interest due together with the reconnection fee set out in
      the Second Schedule, CWC will at the Consumer's request reconnect the
      water supply to the Property.

3.    CWC must supply at least one main meter to the Property in accordance with
      Clause 7. The Consumer may supply and install individual meters within the
      Property. CWC will bill the Consumer based on the readings of the main
      meter or meters and it will be the Consumer's responsibility to deal with
      any tenants. The Consumer's attention is drawn to the provisions of the
      Water (Production and Supply) Law set out in the Second Schedule.

4.    CWC need not supply water if there is any deficiency in CWC's source of
      supply of water due to any contingency affecting its machinery and works
      or due to any accidental or other interruption of its water supply.

5.    CWC will have such rights of access to the Property as are necessary for
      constructing, maintaining and operating its water supply BUT it must
      repair any damage done by its servants or agents in the exercise of those
      rights of access.

6.    The Consumer must pay CWC, at its offices at Trafalgar Place, West Bay
      Road, P.O. Box 1114 GT, Grand Cayman, or any other place provided by CWC
      for the purpose from time to time, for water supplied at the rates
      specified in the Second Schedule and in this Agreement adjusted annually
      as provided in this Agreement. The Consumer is also subject to the minimum
      monthly charges specified in the Second Schedule and must pay minimum
      charges even if it makes no use at all of CWC's water supply or if it uses
      less than the specified minimum quantity per month.

7.    CWC must furnish, fix and maintain in good repair a meter or meters for
      determining the quantity of water used by the Consumer. The Consumer must
      pay the rental specified in the Second Schedule for the use of the meter
      or meters, which will remain the property of CWC. If any meter is damaged
      by the Consumer, its servants, agents or invitees, CWC will repair or
      replace the meter but at the Consumer's expense. The Consumer is liable
      for the cost of all water passing through the meter unless the meter is
      found to be defective after a complaint by the Consumer to CWC. CWC will
      charge the Consumer for water used based on the average water consumption
      of the previous twelve (12) months when the defective meter was working,
      pro rata for the period when the meter was not recording correctly or not
      recording at all.

8.    CWC must lay the necessary water lines to the boundary of the Property at
      a location to be determined by CWC. The Consumer must pay the cost of
      connecting the Property to CWC's line. The connections must be made by or
      under the supervision of an employee of CWC. The Consumer must not
      interfere with the CWC water mains, control valves or meters and must



<PAGE>

      not connect any water pump or other apparatus direct to any water line
      provided by CWC at any time.

9.    All pipes for water supply on the Property must be fitted at the meter
      with screw-down shut-off valves or equivalent at the Consumer's expense.

10.   CWC will deliver water to the Property at the pressure, from time to time,
      in its water system. The Consumer must bear the cost of constructing and
      operating storage and pressure boosting facilities on the Property, if
      required.

11.   The quality of water that CWC supplies must be within its present
      standards required by the Licence which are a maximum of 500 mg/L total
      dissolved solids. If at any time Government requires CWC to supply water
      of a higher quality, then CWC will make an appropriate price adjustment to
      the cost of water supplied, which it will agree with Government before
      supplying higher quality water.

12.   On January 1st in each year, CWC will adjust the water charges by the
      formula based on the change in the previous year of the Cayman Islands
      Government Consumer Price Index and the United States Producer Price Index
      for Industrial Commodities as at each September 30th, as set out in the
      Licence. CWC may from time to time without notice to the Consumer increase
      its charges to the extent permitted by the Licence.

13.   The water supply service must be used only by the Consumer or his tenants
      or guests and must not be re-sold or otherwise supplied to third parties,
      either within or outside the boundaries of the Property.

14.   Notwithstanding that CWC has connected any water supply to a hydrant or
      sprinkler system on the Property, it is expressly agreed that CWC will be
      under no obligation to provide water for fire fighting purposes, at any
      time whatever or under any circumstances, and will only supply water for
      those purposes if it is able to do so, and will not be liable for any
      damage to the Property whatever caused by fire or any related cause.

15.   The Consumer may terminate this Agreement at any time by written notice to
      CWC which will be effective only when all money owed to CWC in respect of
      CWC's supply of water to the Property has been paid in full. In
      particular, the Consumer remains responsible under this Agreement unless
      and until he terminates it even after disposal of the Property.

16.   CWC may amend the terms of this Agreement at any time on written notice to
      the Consumer posted to him at his address on CWC's records, but only if
      and to the extent that the new terms do not conflict with the requirements
      of the Licence.



                                 FIRST SCHEDULE

                                  THE PROPERTY


         [INSERT DESCRIPTION OF PROPERTY INCLUDING REGISTRATION SECTION,
                            BLOCK AND PARCEL NUMBER]



<PAGE>

                                 SECOND SCHEDULE

                            SEVEN MILE BEACH SERVICE

                 Minimum water pressure 30 lbs. per square inch.


WATER TARIFF BASE RATES

Rates apply to amounts for the billing period and are exclusive of the Energy
Adjustment Factor provided for by the Licence.

<TABLE>
<S>                                                                                 <C>
(1)      Residential consumers using less than 3,000
         U.S. gallons per month                                                     CI$17.45 per 1,000 U.S. gallons

(2)      Residential consumers using more than 3,000
         U.S. gallons per month                                                     CI$18.76 per 1,000 U.S. gallons

(3)      Commercial/Industrial consumers                                            CI$18.76 per 1,000 U.S. gallons

(4)      Public Authority                                                           CI$17.45 per 1,000 U.S. gallons

         Minimum Monthly Charge is for 1,000 U.S. gallons.
</TABLE>

METER CHARGES

<TABLE>
<CAPTION>
   SIZE                    MONTHLY RENTAL            CONNECTION FEE           RECONNECTION FEE**
   ----                    --------------            --------------           ----------------

<S>                              <C>                      <C>                       <C>
 20 mm (3/4")                  CI$ 3.50                 CI$  80.00                CI$ 50.00
 25 mm (1")                    CI$ 5.00                 CI$120.00                 CI$ 75.00
 38 mm (1 1/2")                CI$ 7.50                 CI$175.00                 CI$110.00
 50 mm (2")                    CI$10.00                 CI$240.00                 CI$150.00
 75 mm (3")                    CI$15.00                 CI$360.00                 CI$225.00
100 mm (4")                    CI$25.00                 CI$560.00                 CI$300.00
150 mm (6")                    CI$40.00                 CI$800.00                 CI$350.00

</TABLE>

** This charge relates to work completed by CWC employees outside the boundaries
of the Property. Any work carried out by CWC employees within the boundaries at
the Consumer's request will be charged to the Consumer at cost plus thirty
percent (30%). Such work will be undertaken entirely at CWC's discretion and
must be previously requested in writing.


PLEASE NOTE:-
===========

Under The Water (Production and Supply) Law, 1979 (Law 15 of 1979), it is
illegal except in certain specified limited circumstances for anyone other than
CWC to supply water for reward within the area licensed to CWC. Further, whoever
unlawfully interferes with CWC's water system or obstructs the execution of any
works by an employee of CWC in his duties as such is guilty of an offence, and
may be liable to be fined or imprisoned in accordance with provisions of the
Law.


<PAGE>


SIGNED by THE CONSUMER in           )
the presence of:-                   )
                                    )
                                    )
                                    )         Per:    _________________________
- ------------------------------      )
Witness


SIGNED on behalf of                 )         CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER                  )
CO. LTD. in the presence of:-       )
                                    )
                                    )         Per:     _________________________
- ------------------------------      )
Witness

                    ----------------------------------------

EXECUTED by the parties on the Date of this Agreement.

SIGNED for and on behalf of               )        CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER CO. LTD. by            )
                                          )
Director, in the presence of:-            )
                                          )        Per: /s/ JEFFREY M. PARKER
                                          )             -----------------------
  /s/ PETER D. RIBBINS                    )                    Director
- -------------------------------------
Witness



SIGNED for and on behalf of               )        ELLESMERE BRITANNIA LTD.
ELLESMERE BRITANNIA LTD. by               )
         S. Prasad Director, in           )
the presence of:-                         )
                                          )        Per: /s/ SURESH PRASAD
                                          )             -----------------------
  /s/ ILLEGIBLE                           )                    Director
- -------------------------------------
Witness



SIGNED for and on behalf of                 )        HYATT BRITANNIA CORPORATION
HYATT BRITANNIA CORPORATION                 )        LTD.
LTD. by T.D. Riegelman, Director,           )
in the presence of:-                        )
                                            )
                                            )        Per: /s/ T.D. RIEGELMAN
                                            )             ---------------------
       /s/ TERESA C. GAMBON                 )                    Director
- -------------------------------------
Witness

<PAGE>

SIGNED for and on behalf of CAYMAN          )       CAYMAN HOTEL & GOLF INC.
HOTEL & GOLF INC. by                        )
         S. Prasad Director,                )
and by                                      )       Per: /s/ SURESH PRASAD
                                            )            ----------------------
in the presence of:-                        )                  Director
                                            )
                                            )
      /s/ ILLEGIBLE                         )       Per:
- -------------------------------------                    ----------------------
Witness







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>7
<FILENAME>g75127ex10-31.txt
<DESCRIPTION>AGREEMENT
<TEXT>
<PAGE>
                                                                   Exhibit 10.31
                                    AGREEMENT

THIS AGREEMENT is made this 1st day of February, 2002,



BETWEEN:          CONSOLIDATED WATER CO. LTD.
                  a Cayman Islands company having its registered office at
                  Trafalgar Place, West Bay Road, P.O. Box 1114, George Town,
                  Grand Cayman B.W.I. ("CWC")

AND:              CAYMAN HOTEL & GOLF INC.
                  a Canada corporation having its address for service in the
                  Cayman Islands in care of Ritch & Conolly, Queensgate House,
                  South Church Street, P.O. Box 1994, George Town, Grand Cayman
                  B.W.I.("the Customer")


RECITAL:

The Customer wishes to obtain a supply of potable water in specified volume (i)
by pipe for the Hotel known as the Hyatt Regency, on both sides of the West Bay
Road, Grand Cayman and the irrigation of its golf course and (ii) by the
Customer's truck for the Rum Point restaurant at Rum Point, and CWC has agreed
to supply the water on the terms set out in this Agreement;

AGREEMENT:

1.       SUPPLY OF WATER

         (1)      Subject to sub-clause (4), CWC will supply the Customer from
                  the Commencement Date until the expiry of the Term, on the
                  terms and conditions set out in this Agreement potable water
                  to the quality standard required by its Concession at the
                  meter or meters referred to in Clause 2(3) at a maximum rate
                  of 260 gallons per minute at 62 pounds per square inch gauge.

         (2)      The Volume of water supplied will be a minimum of 170,000 U.S.
                  gallons per day. The maximum volumes to be supplied will be
                  the amount from time to time agreed by CWC who must use its
                  best endeavours to supply the Customer's demands in full.

         (3)      Notwithstanding that CWC has connected any water supply to a
                  hydrant or sprinkler system in the Hotel, it is expressly
                  agreed that CWC will be under no obligation to provide water
                  for fire fighting purposes or to ensure that the Water Tank
                  contains water at any time whatever or under any
                  circumstances, and will only supply water for those purposes
                  if it is able to do so, and will not be liable for any damage
                  whatever to the Hotel or any part of it caused by fire or any
                  related cause.

         (4)      For the purposes of this Agreement, the water supplied to the
                  Customer is deemed to be the amount of water shown by:-

                                       1
<PAGE>

         (a)      the meter measuring the amount of water passing through the
                  Fire Pump; plus

         (b)      the meter measuring the amount of water flowing into the
                  Irrigation Tank; plus

         (c)      the Property Meter

                  less the amount of water shown by the Main Meter.

         (5)      CWC must give not less than twenty-four (24) hours' notice to
                  the Customer of any occasion on which to its knowledge the
                  Water Tank will for any reason contain less than 250,000 U.S.
                  gallons of water and if in circumstances unforeseen by CWC,
                  the water in the Water Tank is, or within twenty-four (24)
                  hours will be, reduced below 250,000 U.S. gallons, CWC must
                  notify the Customer immediately it becomes aware of that fact.

2.       PAYMENT

         (1)      From the Commencement Date until the end of the Term, the
                  Customer will, subject to sub-clause (6) and clause 4, pay a
                  price per 1,000 U.S. gallons equal to the total of the
                  following:-

                  (a)      for the Required Monthly Gallonage in any calendar
                           month, US$8.50 subject to adjustment on 1st January,
                           2003 and on each January 1st thereafter in accordance
                           with sub-clause (2);

                  (b)      for any volume supplied in excess of the Required
                           Monthly Gallonage in any calendar month, the price
                           charged to commercial consumers from time to time
                           within that part of the Licence Area in which the
                           Hotel is situated; and

                  (c)      the Energy Adjustment Factor from time to time.

         (2)      On each 1st January commencing 1st January, 2003 the
                  Consumption Charge per 1,000 U.S. gallons of the Required
                  Monthly Gallonage in that year will be adjusted to the figure
                  obtained by reference to the following formula:-

                          5.41 X USPPIL + 3.09 X CICPIL
                          -------------   -------------
                              USPPI00        CICPI00

                  For the purposes of this clause:-

                  USPPIL is the United States Producer Price Index for
                  Industrial Commodities at the preceding September 30th and
                  USPPI00 is that index at September 30, 2000, and

                  CICPIL is the Cayman Islands Consumer Price Index at the
                  preceding September 30th and CICPI00 is that index at
                  September 30, 2000.

                  BUT if the Cayman Islands Government does not produce a
                  Consumer Price Index at any relevant date, the United States
                  Government Consumer Price Index for that date and September
                  30, 2000 must be used.

                                       2
<PAGE>

         (3)      (a)      CWC must furnish, fix and maintain in good repair the
                           Main Meter, the Property Meter and the meters
                           measuring the volumes of water flowing into the
                           Irrigation Tank and passing through the Fire Pump for
                           determining the quantity of water used by the
                           Customer. The Customer must pay the rental specified
                           in paragraph (b) for the use of the Property Meter
                           and the meter measuring the volume of water passing
                           through the Fire Pump only, which will remain the
                           property of CWC. If any meter is damaged by the
                           Customer, its servants, agents or invitees, CWC will
                           repair or replace the meter but at the Customer's
                           expense. The Customer is liable for the cost of all
                           water passing through (i) the Property Meter and (ii)
                           the meters measuring the volumes of water flowing
                           into the Irrigation Tank and passing through the Fire
                           Pump, less water passing through the Main Meter
                           unless any meter is found to be defective after a
                           complaint by the Customer to CWC. CWC will charge the
                           Customer for water used based on the average water
                           consumption of the previous twelve (12) months when
                           the defective meter was working, pro rata for the
                           period when the meter was not recording correctly or
                           not recording at all.

                  (b)      Meter rates are as follows:-
<TABLE>
<CAPTION>

                              SIZE           MONTHLY RENTAL           CONNECTION FEE           RECONNECTION FEE
                              ----           --------------           --------------           ----------------
                           <S>               <C>                      <C>                      <C>

                           20 mm (3/4")         CI$ 3.50               CI$ 80.00                     CI$ 50.00
                           25 mm (1")           CI$ 5.00               CI$120.00                     CI$ 75.00
                           38 mm (1 1/2")       CI$ 7.50               CI$175.00                     CI$110.00
                           50 mm (2")           CI$10.00               CI$240.00                     CI$150.00
                           75 mm (3")           CI$15.00               CI$360.00                     CI$225.00
                           100 mm (4")          CI$25.00               CI$560.00                     CI$300.00
                           150 mm (6")          CI$40.00               CI$800.00                     CI$350.00
</TABLE>

         (4)      CWC must invoice the Customer for the Monthly Charge for the
                  previous calendar month and any unpaid balance on the account
                  (including interest on any late payments at the rate set out
                  below) and the Customer must pay each invoice within
                  twenty-one (21) days failing which the Customer must pay CWC
                  interest at the rate of 1 1/2% per month calculated on a daily
                  basis from the due date to the date of payment, which CWC may
                  charge whether or not it continues to supply water. If any
                  invoice remains unpaid for 30 days from its date then CWC may
                  cease supplying water until the Customer pays all invoices up
                  to date.

         (5)      The water supply service must be used only by the Customer or
                  his tenants or guests and must not be re-sold or otherwise
                  supplied to third parties, either within or outside the
                  boundaries of the Hotel.

         (6)      For the period beginning on the date of this agreement and
                  ending on 31st May, 2002 only, for any gallonage supplied in
                  excess of the Required Monthly Gallonage in any calendar
                  month, the Customer will pay a price per 1000 U.S. gallons
                  equal to the price payable pursuant to subclause 2(1)(a) and
                  (c) in the relevant calendar month for the Required Monthly
                  Gallonage.

                                       3
<PAGE>

3.       SECURITY DEPOSIT

         The Customer must pay CWC on the date of this Agreement, a deposit of
         US$50,000.00 which CWC must hold on account of the payment of the
         Monthly Charge during the last month of this Agreement. So long as the
         Customer has paid all charges (including any interest on late payments)
         due under this Agreement during the previous year, CWC must, on every
         anniversary of the payment of the deposit, compute and credit the
         Customer against the following month's bill for water under this
         Agreement, interest on that deposit at the average rate paid by Cayman
         National Bank during the previous year on fixed deposits of
         US$50,000.00 for periods of one year. If at the end of this Agreement
         any portion of the deposit remains unused, CWC must immediately refund
         it to the Customer without interest.

4.       MINIMUM WATER QUANTITY

         (1)      The Customer must pay the Consumption Charge for at least
                  170,000 U.S. gallons of water per day whether or not it is
                  used if CWC was able to supply that quantity on the particular
                  day. If CWC could not have supplied that quantity of water on
                  any day, the Customer need only pay for the quantity which
                  could have been supplied.

         (2)      Notwithstanding sub-clause (1), if in any month after May 2002
                  the Customer does not use the minimum water quantity for which
                  he has paid the Consumption Charge, CWC must give credit in
                  succeeding months for the Consumption Charge paid in respect
                  of the unused water against the Monthly Charge for water used
                  in those months in excess of the minimum quantity BUT except
                  in respect of credits earned after 31st May, 2026, which will
                  expire on the expiration of this Agreement, unused credits
                  earned in each 24 month period which commences 1st June during
                  the Term (the first of which will commence 1st June, 2002)
                  will expire at the end of each such 24 month period.

5.       FORCE MAJEURE

         Notwithstanding anything to the contrary in this Agreement, the
         Customer's rights against CWC and any corresponding obligations of the
         Customer will be suspended during any period in which CWC cannot carry
         out its obligations under this Agreement because of FORCE MAJEURE which
         includes, without limitation, hurricane, fire, flood or other acts of
         God, accident, explosion, war, strike, lockout, labour trouble,
         expropriation by Governmental authority, regulation, orders or requests
         of Governmental agencies or inability by the exercise of reasonable
         diligence to obtain supplies, materials or power.

6.       ASSIGNMENT

         (1)      The Customer may not assign the benefit of this Agreement
                  without first obtaining CWC's consent (such consent not to be
                  unreasonably withheld or delayed) BUT:-

                  (a) may without that consent and subject to it remaining fully
                      liable to CWC in all  respects  assign this Agreement to

                     o     any wholly owned subsidiary company or any company
                           which owns all of the Customer's shares; or

                                       4
<PAGE>

                     o     any successor to the Customer by consolidation,
                           merger or other corporate action; or

                     o     the operator of the Hotel (currently the Hyatt
                           Regency, Grand Cayman) from time to time; or

                     o     any purchaser of the Customer or purchaser of the
                           Hotel.

                  (b) in every case, each assignee of the Customer must assume
                      and will be taken to have assumed the obligations under
                      this Agreement and will be liable in addition to the
                      Customer, from the date of the assignment, to comply with
                      all the Customer's obligations in it.

                  The Customer must give notice to CWC within one month after
                  any transaction under this clause, supplying a copy of the
                  instrument.

                  On CWC's giving consent to any assignment and the assignee
                  agreeing to accept all of the Customer's obligations under
                  this Agreement, the Customer will be released from all those
                  obligations as of the date of CWC's consent, but without
                  prejudice to CWC's right of action in respect of any
                  antecedent breaches by the Customer.

         (2)      CWC agrees that if at any time CWC assigns or transfers the
                  Concession or the Concession is granted to another company in
                  which CWC has an interest, it will assign this Agreement to
                  the assignee, transferee or grantee (as the case may be) of
                  the Concession.

7.       TERMINATION

         (1)      This Agreement may, without prejudice to any other rights
                  which the terminating party may have against the other, be
                  terminated by either party before the end of the Term if the
                  other party:-

                  (a) does not comply with any of its representations,
                      warranties or agreements set out in this Agreement and
                      does not remedy the breach (if capable of remedy) within
                      30 days of service on it of notice so to do; or

                  (b) is prohibited from performing its obligations under this
                      Agreement as a result of any applicable law or regulation.

         (2)      The Customer may terminate this Agreement at any time after
                  the Lease has been terminated by the Customer pursuant to the
                  termination provisions contained in the Lease.

8.       NOTICES

         (1)      A notice or other communication under or in connection with
                  this Agreement shall be in writing and shall be delivered
                  personally or sent by telefax, as follows:-

                                       5
<PAGE>

                 (a) if to CWC, to:-

                                    Trafalgar Place
                                    West Bay Road, West Bay
                                    P.O. Box 1114
                                    George Town, Grand Cayman B.W.I.
                                    Telefax:  (345) 945-4191

                     with a copy to:-

                                    Myers & Alberga
                                    One Regis Place, 90 Fort Street
                                    P.O. Box 472
                                    George Town, Grand Cayman B.W.I.
                                    Attn:  Mr. Bryan L. Ashenheim
                                    Telefax: (345) 949-8171

                  (b) if to the Customer, to:-

                                    P.O. Box 1698
                                    George Town, Grand Cayman B.W.I.
                                    Telefax:  (345) 949-8032

                      with a copy to:-

                                    Ritch & Conolly
                                    P.O. Box 1994
                                    George Town, Grand Cayman B.W.I.
                                    Attn:  Mr. Angus Charlton
                                    Telefax:  (345) 949-8652 or 949-0673

                  or to another person, address or telefax number specified by a
                  party by written notice to the others.

         (2)      In the absence of evidence of earlier receipt, a notice or
                  other communication is deemed given:-

                  (a) if delivered personally, when left at the address referred
                      to in Clause 8(1).

                  (b) if sent by telefax, on completion of its transmission or,
                      if sent on a day which is not a working day at the
                      recipient's address, at 9:00 a.m. (recipient's time) on
                      the next succeeding working day at the recipient's
                      address.

9.       ENTIRE AGREEMENT, BINDING EFFECT AND MODIFICATION

         This Agreement is binding on the parties and their respective
         successors and assigns and may be amended or modified only by a further
         written agreement signed by both parties. This Agreement sets out the
         entire agreement of the parties with respect to its subject matter and
         supersedes all previous agreements and understandings whether oral or
         written relating to it.

                                       6
<PAGE>

10.      NO WAIVER OF TERMS

         Unless there is a written agreement to the contrary, no neglect,
         omission or forbearance on CWC's part to take advantage of or enforce
         any right or remedy arising out of any breach or non-observance of any
         of the terms and conditions contained or implied in this Agreement will
         be deemed to be or operate as a general waiver of that term or
         condition or the right to enforce or take advantage of it in respect of
         any breach or non-observance of it either original or recurring.

11.      DEFINITIONS

         For the purposes of this Agreement:-

         (1) "the Commencement Date" means the 1st day of February, 2002.

         (2) "the Concession" means the concession granted to CWC under the Law,
             as amended from time to time.

         (3) "the Consumption Charge" means the charge in sub-clause 2(1)(a)
             subject to adjustment in accordance with sub-clause 2(2).

         (4) "the Energy Adjustment Factor" means the Energy Adjustment Factor
             as defined in the Concession.

         (5) "the Fire Pump" means the Customer's fire pump connected to the
             Water Tank.

         (6) "the Hotel" means the hotel presently known as the Hyatt Regency,
             the Britannia golf course, the Hyatt beach club and Hemingway's
             restaurant and the Rum Point restaurant comprised in the Land
             Registers referred to in the Schedule.

         (7) "the Irrigation Tank" means the Customer's irrigation tank marked
             as such on the Plan.

         (8) "the Law" means the Water (Production and Supply) Law (1996
             Revision) which expression includes any amendment, consolidation or
             re-enactment of it.

         (9) "the Lease" means the lease under the Registered Land Law between
             the Customer as landlord and CWC as tenant of part of the land
             comprised in Registration Section West Bay Beach South Block 12D
             Parcel 79REM1.

         (10) "the Licence Area" means the area for which CWC has been granted
              the Concession under the Law.

         (11) "the Main Meter" means the water meter edged purple on the Plan
              metering the supply of water to that part of the Britannia
              Development known as "Britannia Villas".

         (12) "the Monthly Charge" means the total of the Consumption Charge and
              the Energy Adjustment Factor in respect of each month.

         (13) "the Plan" means the plan attached to this Agreement marked
              `Property Plan' and initialled by the parties for the purposes of
              identification.

                                       7
<PAGE>

         (14) "the Property Meter" means the water meter at the boundary of the
              Property to which the Water Pipe is connected, the location of
              which is marked in pink on the Plan.

         (15) "the Required Monthly Gallonage" means 170,000 multiplied by the
              number of days in the relevant calendar month.

         (16) "the Term" means the period of twenty-five (25) years or until the
              earlier expiry of the Concession or any renewal of it, commencing
              on the Commencement Date.

         (17) "the Water Pipe" means the water pipe coloured brown on the Plan
              running from the Property Meter to the Main Meter.

         (18) "the Water Tank" means the water tank owned by CWC located on the
              Property and marked as such on the Plan.

12.      APPLICABLE LAW AND FORUM

         This Agreement is governed by and must be construed in accordance with
         the laws of the Cayman Islands and both parties submit to the
         non-exclusive jurisdiction of the Cayman Islands Courts.

                                  THE SCHEDULE

<TABLE>
<CAPTION>
                                                       THE HOTEL

<S>                                     <C>                                    <C>
         REGISTRATION SECTION                            BLOCK                                 PARCEL
- --------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12C                                    27
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                  24 & 26
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12D                                  79REM1
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    89
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    88
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12E                                    94
- ---------------------------------------- -------------------------------------- --------------------------------------
         West Bay Beach South                             12C                                    154
- ---------------------------------------- -------------------------------------- --------------------------------------
               Rum Point                                  33B                                 169 & 173
- ---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>



SIGNED for and on behalf of          )           CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER CO. LTD. by       )
                                     )
a Director, in the presence of:-  )
                                                 Per: /s/ Jeffrey M. Parker
                                     )                --------------------------
     /s/ Frederick Mctaggart         )                        Director
- -----------------------------------
Witness

SIGNED on behalf of CAYMAN           )           CAYMAN HOTEL & GOLF INC.
HOTEL & GOLF INC. by                 )
Scott McCaw         , a Director,    )
and by Peter Janson     , a Director )           Per: /s/ Scott Mccaw
                                                     ---------------------------
the presence of:- Marilyn Rolfe      )                        Director
                                     )
   /s/ Marilyn Rolfe                 )           Per: /s/ Peter Janson
- -----------------------------------                  ---------------------------
Witness                                                       Director


                                       8



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.48
<SEQUENCE>8
<FILENAME>g75127ex10-48.txt
<DESCRIPTION>CREDIT FACILITY AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.48

April 25, 2001

PRIVATE & CONFIDENTIAL
- ----------------------
Consolidated Water Co. Ltd.
Box 1114
Grand Cayman, B.W.I.

ATTENTION: RICK MCTAGGART

Dear Sir:

RE: CONFIRMATION OF CREDIT FACILITIES

Further to our recent discussions, and subject to the undernoted terms and
conditions, we are pleased to offer you financing as follows:

LENDER:                           ROYAL BANK OF CANADA (The "Bank")

BORROWER:                         CONSOLIDATED WATER CO. LTD.(The "Borrower")

AMOUNT:                           Segment 1) $1,000,000 - Overdraft, revolving
                                  Segment 2) $3,500,000 - Standby Line

CURRENCY:                         All dollar amounts in this letter refer to
                                  United States funds, unless otherwise
                                  specified.

PURPOSE:                          Segment 1) General Operating purposes
                                  Segment 2) General Corporate purposes

INTEREST RATES:                   Segment 1) USD/KYD Prime + 1%/LIBOR + 1.50%
                                  Segment 2) LIBOR + 1.50%

                                  The Borrower shall pay interest monthly in
                                  arrears on Prime-based facilities at the
                                  annual rate set out above calculated on a
                                  daily basis and based on the actual number of
                                  days elapsed in the period for which interest
                                  is being calculated divided by 365. The annual
                                  rates of interest to which the rates
                                  calculated in accordance with the foregoing
                                  provisions are equivalent, are the rates so
                                  determined multiplied by the actual number of
                                  days in a one year period calculated from the
                                  first day on which interest is to be
                                  calculated and divided by 365. These rates
                                  apply after as well as before maturity,
                                  default, and judgement, with interest on
                                  overdue interest at the same rate as on the
                                  principal.

                                                                     Page 1 of 9
<PAGE>


                                  LIBOR LOANS:

                                   Interest on LIBOR loans shall be payable on
                                   each LIBOR interest date. The yearly rates of
                                   interest to which the rates determined in
                                   accordance with the LIBOR provisions of this
                                   agreement are equivalent, are rates so
                                   determined multiplied by the actual number of
                                   days in a year and divided by 360.

SERVICE PRICING:                  a)    An annual review fee of 1/16% ($2,800
                                        this year) will be charged to cover the
                                        administration involved in reviewing the
                                        company's financial information and
                                        re-establishing facilities.

                                  b)    Any temporary excesses/amendments and
                                        additional credit requirements are
                                        subject to approval and may be assessed
                                        a fee of up to 1/2%, minimum $1,000.

                                  c)    A fee of 1/2% will be associated with
                                        each draw down under Segment 2.

REPAYMENT:                        Segment 1)  Revolving; repayment in full upon
                                              demand.

                                  Segment 2)  Undrawn portion - 1 year,
                                              extendable term. Drawn amounts -
                                              Monthly payments over a maximum 5
                                              year term, 10 year amortization.

                                  PROHIBITED INTEREST - Nothing in this
                                  agreement shall be construed as obliging the
                                  Borrower to pay any interest, charges or other
                                  expenses as provided by this agreement or in
                                  any other security agreement related thereto
                                  in excess of what is permitted by law.

PREPAYMENTS:                      Segment 1) may be prepaid in whole or in part
                                  without penalty.

                                  Segment 2) may only be repaid at maturity
                                  (maturity of each term, i.e., 30 days, 60
                                  days, 90 days etc.).

SECURITY:                         GENERAL SECURITY FOR ALL LOANS

                                  Certified copy of directors' resolutions,
                                  bylaws, legal opinions and attendant documents
                                  as may be requested by the Bank.

                                                                     Page 2 of 9
<PAGE>

                                  Fixed & floating charge debenture for
                                  USD$2,500,000, with fixed charge covering West
                                  Bay Beach North, Block 11D, Parcel 8 and
                                  collateral charge covering Governor's Harbour
                                  property and floating charge covering all
                                  other assets of the Borrower (To be up stamped
                                  to USD$4,500,000 as Segment 2) drawn down).

                                  Guarantee & Postponement of Claim in favour of
                                  Consolidated Water Co. Ltd. signed by Cayman
                                  Water Company Limited.

INSURANCE:                        The Borrower will lodge with the Bank
                                  comprehensive insurance policies satisfactory
                                  to the Bank, covering buildings, equipment and
                                  inventory with loss made payable firstly to
                                  the Bank.

REPRESENTATIONS,
WARRANTIES &
ACKNOWLEDGMENTS:                  The Borrower represents and warrants to the
                                  Bank that:

                                  1)    it is a corporation validly incorporated
                                        and subsisting under the laws of Cayman
                                        Islands, and that it is duly registered
                                        or qualified to carry on business in all
                                        jurisdictions where the character of the
                                        properties owned by it or the nature of
                                        its business transacted makes such
                                        registration or qualification necessary;

                                  2)    the execution and delivery of this
                                        Agreement has been duly authorized by
                                        all necessary actions and does not (i)
                                        violate any law or, any provision of the
                                        charter or any unanimous shareholders
                                        agreement to which it is subject or,
                                        (ii) result in a breach of, a default
                                        under, or the creation of any
                                        encumbrance on the properties and assets
                                        of it under any agreement or instrument
                                        to which it or any of its properties and
                                        assets may be bound or affected.

                                  3)    There is no provision in the Borrower's
                                        articles, bylaws or any unanimous
                                        shareholder agreement respecting the
                                        ability of the Borrower to:

                                        a)    borrow money upon the credit of
                                              the Borrower;



                                                                     Page 3 of 9
<PAGE>
                                        b)    issue, reissue, sell or pledge
                                              debt obligations of the Borrower;

                                        c)    give a guarantee on behalf of the
                                              Borrower to secure performance of
                                              an obligation to any person; and

                                        d)    mortgage, hypothecate, pledge or
                                              otherwise create a security
                                              interest in all or any property of
                                              the Borrower, owned or
                                              subsequently acquired, to secure
                                              any debt obligation of the
                                              Borrower.




                                                                     Page 4 of 9
<PAGE>


                                  4)    The Borrower is in compliance with all
                                        applicable statutes, regulations, orders
                                        and bylaws enacted or adopted for the
                                        protection and conservation of the
                                        natural environment.

                                  5)    The Borrower has obtained all
                                        certificates, approvals, permits,
                                        consents, orders and directions required
                                        concerning the installation or operation
                                        of any machinery, equipment or facility
                                        constituting assets of the Borrower, or
                                        required concerning any land of the
                                        Borrower, or required concerning any
                                        structure, activity or facility on or in
                                        any land of the Borrower, and the
                                        Borrower is not aware of any
                                        circumstance which might give rise to
                                        the revocation of any such certificates,
                                        approvals, permits, consents, orders and
                                        directions or the implementation of
                                        further orders or directions relating to
                                        the above which might affect the land or
                                        the business of the Borrower which the
                                        Borrower has not disclosed fully in
                                        writing to the Bank.

COVENANTS:                        The Borrower, by accepting this Offer, agrees:

                                  1)    to deliver to the Bank such financial
                                        and other information as the Bank may
                                        reasonably request from time to time,
                                        including but not limited to the
                                        following:

                                        a)    audited financial statements
                                              within 90 days after each fiscal
                                              year end.

                                        b)    quarterly company prepared
                                              financial statements within 30
                                              days following each quarter end.

                                  2)    not to grant or create any security
                                        interest, lien, charge or encumbrance
                                        affecting any of its properties or
                                        assets, except for any security interest
                                        granted to secure an obligation created
                                        solely for the purchase of additional
                                        fixed assets required for the efficient
                                        operation of its business with any such
                                        security to cover only the assets
                                        purchased.

                                  3)    Debt to Equity shall not exceed 0.85.
                                        "Equity" is defined as the total of
                                        share capital, contributed surplus,
                                        retained earnings and postponed
                                        shareholder loans MINUS intangible
                                        assets and amounts owed to the
                                        Borrower by shareholders/associated
                                        companies.


                                                                     Page 5 of 9
<PAGE>

                                  4)    to maintain a Debt Servicing ratio of
                                        not less than 1.25 (earnings before
                                        interest, depreciation and amortization
                                        divided by principal and interest on all
                                        debt).

                                  All covenants in this agreement or any other
                                  agreement between the Borrower and the Bank or
                                  other documentation or security will remain in
                                  force for the benefit of the Bank at all times
                                  before and after the making of advances
                                  hereunder and/or the taking of security
                                  pursuant hereto.

OTHER CONDITIONS:                 If the Bank chooses to grant forbearance or a
                                  waiver of any of the terms and conditions of
                                  this letter, this action will not affect the
                                  Bank's ability to act on any subsequent breach
                                  or default or the rights of the Bank resulting
                                  therefrom.

EVIDENCE OF
INDEBTEDNESS:                     The Bank shall open and maintain at the Branch
                                  of Account, accounts and records evidencing
                                  the Borrowings made available to the Borrower
                                  by the Bank under this agreement. The Bank
                                  shall record the principal amount of such
                                  Borrowings, the payment of principal and
                                  interest on account of the loans, and all
                                  other amounts becoming due to the Bank under
                                  this agreement.

                                  The Bank's accounts and records constitute, in
                                  the absence of manifest error, PRIMA FACIE
                                  evidence of the indebtedness of the Borrower
                                  to the Bank pursuant to this agreement.

                                  The Borrower authorizes and directs the Bank
                                  to automatically debit, by mechanical,
                                  electronic or manual means, any bank account
                                  of the Borrower for all amounts payable under
                                  this agreement, including but not limited to,
                                  the repayment of principal and the payment of
                                  interest, fees and all charges for the keeping
                                  of such account.

EVENTS OF DEFAULT:                Without limiting the Bank's right to make
                                  demand for payment at any time on demand
                                  loans, the Bank may immediately withdraw the
                                  Borrower's right to further borrow under this
                                  agreement, demand immediate repayment of all
                                  amounts outstanding, together with outstanding
                                  accrued interest and realize on all or any
                                  portion of the security granted to the Bank if
                                  any of the following events of default occur:



                                                                     Page 6 of 9
<PAGE>



                                  1)    Failure of the Borrower to pay any
                                        principal, interest or other amounts
                                        when due pursuant to this agreement;

                                  2)    Failure of the Borrower to observe or
                                        perform any covenant, condition or
                                        provision in this agreement or other
                                        documentation or security;

                                  3)    If the Borrower becomes insolvent,
                                        commits an act of bankruptcy, makes an
                                        assignment of property for the benefit
                                        of its creditors, or enters into a bulk
                                        sale of its assets without the prior
                                        written approval of the Bank;

                                  4)    If any proceeding is taken with respect
                                        to a compromise or arrangement with the
                                        creditors of the Borrower, including
                                        under the Companies' Creditors
                                        Arrangement Act or to have the Borrower
                                        declared bankrupt or wound up, or to
                                        have a Receiver or Receiver Manager
                                        appointed of any part of the mortgaged
                                        property or if any encumbrancer takes
                                        possession of any part thereof;

                                  5)    There occurs, in the sole opinion of
                                        the Bank:

                                        (a)   a material adverse change in the
                                              financial condition of the
                                              Borrower; or

                                        (b)   an unacceptable change in
                                              ownership of the Borrower; or

                                        (c)   legal implications detrimental to
                                              the affairs of the Borrower;

CONDITIONS PRECEDENT:             The obligation of the Bank to make these
                                  credit facilities available to the Borrower is
                                  subject to and conditional upon all security
                                  and/or documentation being completed and
                                  registered in form and substance satisfactory
                                  to the Bank.

REVISION DATE:                    Without limiting any rights the Bank may have
                                  to demand payment, these credit facilities
                                  will be subject to review at the Bank's
                                  discretion and at least annually.




                                                                     Page 7 of 9
<PAGE>


LEGAL COSTS:                      All legal costs, fees, expenses, etc.
                                  incurred in establishing these credit
                                  facilities, preparation and maintenance of
                                  security and documentation are for account of
                                  the Borrower.

ACCEPTANCE:                       This offer expires if not accepted in writing
                                  by May 15th, 2001, unless extended in writing
                                  by the Bank.

Please acknowledge your acceptance of the above terms and conditions by signing
the attached copy of this Offer to Finance in the space provided below and
returning to the undersigned. This Offer to Finance cancels and supersedes any
previous Offers.

                                       Yours truly,

                                       ROYAL BANK OF CANADA



                                       /s/ G.C. Plamondon
                                       -----------------------------------------
                                       G.C. PLAMONDON,
                                       Sr. Assistant Manager

                                                                     Page 8 of 9

<PAGE>


WE ACKNOWLEDGE AND ACCEPT THE WITHIN TERMS AND CONDITIONS THIS 27TH DAY OF
            APRIL               , 2001.
- --------------------------------


CONSOLIDATED WATER CO. LTD.


PER: /s/ Frederick W. Mctaggart
     ----------------------------------
     President and COO


PER: /s/ Peter D. Ribbins
     -----------------------------------
         Director/Secretary







                                                                     Page 9 of 9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.49
<SEQUENCE>9
<FILENAME>g75127ex10-49.txt
<DESCRIPTION>VARIATION OF DEBENTURE
<TEXT>
<PAGE>
                                                                   Exhibit 10.49

THIS VARIATION OF DEBENTURE is made the 22ND day of February 2002 (A Variation
of the Collateral Charge is registered over West Bay Beach North, Block 11D,
Parcel 40 and West Bay Beach North, Block 11D, Parcel 8)


BETWEEN:

(1)      CONSOLIDATED WATER CO. LTD., a company incorporated under the laws of
         the Cayman Islands and having its registered office at the offices of
         Consolidated Water Co. Ltd., Trafalgar Place, West Bay Road, P.O. Box
         1114 GT, Grand Cayman (hereinafter called "the Borrower") of the ONE
         PART; and


(2)      ROYAL BANK OF CANADA., a banking corporation licensed to carry on
         business in the Cayman Islands with offices at P.O. Box 245, George
         Town, Grand Cayman (hereinafter called "the Bank") of the OTHER PART.

WHEREAS:

         (1)   The Bank and the Borrower entered into a form of Debenture dated
               the 1st day of June 1979 (the "Debenture") to secure the loan of
               CI$200,000.00 borrowed from the Bank. A Supplemental Deed was
               entered into on the 30th day of April 1981 for an additional
               borrowing of CI$ 275,000.00. A second supplemental Deed to the
               Debenture was entered into on the 10th day of March 1983 for an
               additional borrowing. A third supplemental Deed to the Debenture
               was entered into on the 6th day of December 1984 for additional
               borrowing. A fourth Supplemental Deed to the Debenture was
               entered into on the 31st day of August 1989. A further Variation
               to the Debenture was entered into on the 11th day of October
               1999;

         (2)   The Bank and the Borrower have now agreed to enter into this
               Variation of Debenture to secure a further borrowing from the
               Bank of US$500,000.00 so that the total amount of the loan to the
               borrower shall be us$3,000,000.00;

         (3)   The Bank and the Borrower have now agreed that the interest rate
               shall be at the Bank's US$ LIBOR rate plus 1.5%;

         (4)   The Bank and the Borrower have now agreed to that the repayment
               of the loan shall be revolving.



<PAGE>
                                       2


NOW THIS DEED WITNESSES as follows:

1.       Words and terms defined in this Variation of Debenture shall bear the
         same meaning herein as in the Debenture unless expressly provided to
         the contrary.

2.       In consideration of the said agreement the Borrower and the Bank hereby
         agree the Debenture and the Variation of Debenture shall hereafter
         stand as security for all sums owing to the Bank from time to time up
         to maximum of US$3,000,000.00 (Three Million United States Dollars)
         altogether with interest thereon;

3.       The rate of interest payable shall be the Bank's US$ LIBOR plus 1.5%;

4.       The repayment of the loan by the Borrower shall be revolving;

5.       The Bank hereby consents to the registration of a Variation of
         Collateral Charge over property being held as collateral security to
         the loan and being mentioned in the Schedule to this Variation of
         Debenture;

6.       All other terms and conditions of the Debentures shall remain in full
         force and effect;

7.       This Variation of Debenture shall be governed by and interpreted in
         accordance with Cayman Islands Law.



<PAGE>
                                       3

IN WITNESS WHEREOF the parties have executed this Variation of Debenture as a
deed the day and year first before written.

                                    SCHEDULE

All those parcels of land on Grand Cayman comprised within Registration Section
West Bay Beach North Block 11D Parcel 8 and West Bay Beach North, Block 11D,
Parcel 40

THE COMMON SEAL of                  )
CONSOLIDATED WATER CO. LTD.         )
Was hereunto affixed by             )
                                    )
In the presence of                  )           /s/ Frederick Mctaggart
                                                --------------------------------
                                    )               Director
                                    )
                                    )           /s/ Peter Ribbins
                                                --------------------------------
/s/ Jeffrey M. Parker               )               Secretary
- -------------------------
Witness

THE COMMON SEAL of                  )
ROYAL BANK OF CANADA)
Was hereunto affixed by             )            /s/ G. Plamondon
                                                 -------------------------------
And by                              )                Director
In the presence of                  )
                                    )            /s/ Denise Ebanks
                                                 -------------------------------
                                    )                Asst. Secretary
/s/ John Broadbent                  )
- -------------------------
Witness





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.50
<SEQUENCE>10
<FILENAME>g75127ex10-50.txt
<DESCRIPTION>2ND COLLATERAL CHANGE TO VARIATION OF DEBENTURE
<TEXT>
<PAGE>
                                                                   Exhibit 10.50


                                 CAYMAN ISLANDS

                     The Registered Land Law (1995 Revision)
                    The Registered Land Rules (2000 Revision)

                                 Third Schedule

              SECOND COLLATERAL CHARGE TO A VARIATION OF DEBENTURE

                           DATED 22ND OF FEBRUARY 2002

  REGISTRATION SECTION                     BLOCK                       PARCEL
  WEST BAY BEACH NORTH                      11D                           8
- ----------------------------------         -----                       ------
WE, CONSOLIDATED WATER CO. LTD.
    (hereinafter called " the Chargor")

of P.O. Box 1114 GT, Grand Cayman

HEREBY CHARGE our interest in the above mentioned title to secure the payment

To ROYAL BANK OF CANADA

Of P.O. Box 245 GT, Grand Cayman

Of the principal sum of US$3,000,000.00

With interest at the rate as set our in the attached Schedule,

Payable as set within the attached schedule, subject to Section 67 of the above
Law, save as negatived, modified or added to , in the manner as set out in the
attached Schedule. The Chargee reserves the right to tack and/or consolidate
Charges as set out in the attached Schedule.

         The principle sum shall be repaid on demand together with any interest
or any other monies then due in accordance with attached Schedule.

         And We the above named Chargor hereby acknowledge that We understand
the effect of Section 72 of the Registered Land Law, (1995 Revision).

         Dated this 22nd day of February 2002

                           CONSOLIDATED WATER CO. LTD.

Signed by the Chargor /s/ Frederick Mctaggart       /s/ Peter Ribbins
                     ----------------------------   ----------------------------
                          Director                  Secretary

In the presence of:-
                     -----------------------------------------------------------

Signed by the Chargee            /s/ G. Plamondon
                     -----------------------------------------------------------
                               ROYAL BANK OF CANADA

In the presence of:-            /s/ Denise Ebanks
                     -----------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------

                              FOR OFFICIAL USE ONLY

    I, the Registrar of Lands in the Cayman Islands hereby certify that this
  document was Received by me for registration on the 6TH day of MARCH 2002 And
    that stamp duty assessed/adjudicated by me/Treasury at CI$ 30.00 and Land
           Registry fees at CI$ 50.00 relating thereto have been paid.

                      REGISTERED this 8TH day of MARCH 2002

                                /s/ illegible
                        ---------------------------------
                             ASST REGISTRAR OF LANDS
                                 CAYMAN ISLANDS

                          CERTIFICATE OF IDENTIFICATION

                           CONSOLIDATED WATER CO. LTD.

                  Name: Frederick W. McTaggart             Director

I HEREBY CERTIFY that the above-named person appeared before me on the...15...
Of ...February, 2002, and being known to me acknowledged the above signature or
mark to be his and that he had freely and voluntarily executed this instrument
and understood its contents.

                               /s/ Jeffrey Parker
               --------------------------------------------------
               Signature and designation of the person certifying


                          CERTIFICATE OF IDENTIFICATION

                           CONSOLIDATED WATER CO. LTD.

                  Name: Peter D. Ribbins                   Secretary

I HEREBY CERTIFY that the above-named person appeared before me on the...15...
Of ......February, 2002, and being known to me acknowledged the above signature
or mark to be his and that he had freely and voluntarily executed this
instrument and understood its contents.

                               /s/ Jeffrey Parker
               --------------------------------------------------
               Signature and designation of the person certifying


<PAGE>



                                 CAYMAN ISLANDS

                     The Registered Land Law (1995 Revision)
                    The Registered Land Rules (2000 Revision)

                                 Third Schedule
              SECOND COLLATERAL CHARGE TO A VARIATION OF DEBENTURE
                           Dated 22nd of February 2002

  REGISTRATION SECTION                     BLOCK                       PARCEL
  WEST BAY BEACH NORTH                      11D                          40
- ---------------------------                ------                      ------
WE, CONSOLIDATED WATER CO. LTD.
    (hereinafter called " the Chargor")

of P.O. Box 1114 GT, Grand Cayman

HEREBY CHARGE our interest in the above mentioned title to secure the payment

To ROYAL BANK OF CANADA

Of P.O. Box 245 GT, Grand Cayman

Of the principal sum of US$3,000,000.00

With interest at the rate as set our in the attached Schedule,

Payable as set within the attached schedule, subject to Section 67 of the above
Law, save as negatived, modified or added to , in the manner as set out in the
attached Schedule. The Chargee reserves the right to tack and/or consolidate
Charges as set out in the attached Schedule.

         The principle sum shall be repaid on demand together with any interest
or any other monies then due in accordance with attached Schedule.

         And We the above named Chargor hereby acknowledge that We understand
the effect of Section 72 of the Registered Land Law, (1995 Revision).

         Dated this 22nd day of February 2002

                           CONSOLIDATED WATER CO. LTD.

Signed by the Chargor  /s/ Frederick Mctaggart        /s/ Peter Ribbins
                       ----------------------------   --------------------------
                       Director                       Secretary

In the presence of:-
                     -----------------------------------------------------------

Signed by the Chargee                     /s/ G. Plamondon
                      ----------------------------------------------------------
                                        ROYAL BANK OF CANADA

In the presence of:-                      /s/ Denise Ebanks
                     -----------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------

                              FOR OFFICIAL USE ONLY

    I, the Registrar of Lands in the Cayman Islands hereby certify that this
   document was Received by me for registration on the 6TH day of MARCH 2002
             And that stamp duty assessed/adjudicated by me/Treasury
                at CI$ 30.00 and Land Registry fees at CI$ 50.00
                        relating thereto have been paid.

                      Registered This 8th Day of March 2002

                                  /s/ illegible
                        ---------------------------------
                             ASST REGISTRAR OF LANDS
                                 CAYMAN ISLANDS

                          CERTIFICATE OF IDENTIFICATION

                           CONSOLIDATED WATER CO. LTD.

                Name: Frederick W. McTaggart          Director

I HEREBY CERTIFY that the above-named person appeared before me on the...15...
Of ...February, 2002, and being known to me acknowledged the above signature or
mark to be his and that he had freely and voluntarily executed this instrument
and understood its contents.

                               /s/ Jeffrey Parker
               --------------------------------------------------
               Signature and designation of the person certifying


                          CERTIFICATE OF IDENTIFICATION

                           CONSOLIDATED WATER CO. LTD.

                  Name:  Peter D. Ribbins            Secretary

I HEREBY CERTIFY that the above-named person appeared before me on the...15...
Of ......February, 2002, and being known to me acknowledged the above signature
or mark to be his and that he had freely and voluntarily executed this
instrument and understood its contents.

                               /s/ Jeffrey Parker
               --------------------------------------------------
               Signature and designation of the person certifying




<PAGE>

                  THE REGISTRAR OF LANDS IS HEREBY REQUESTED:-

(a)      to register this Charge in favor of the Chargee,


(b)      to note on the register that the attached Schedule contains an
         agreement by the Chargor with the Chargee that the Chargor will not
         without first obtaining the prior written consent of the Chargee lease
         or sub-lease or agree to lease or sub-lease or accept surrenders of
         leases or sub-leases or transfer or otherwise part with the possession
         of the Charged Premises or any part thereof,

(c)      to note on the register that the right to tack and rank in priority to
         any subsequent charge is expressly reserved to the Chargee,


(d)      to note on the register that the attached Schedule reserves to the
         Chargee the right to consolidate this Charge with any other charge,


(e)      to note on the register that the attached Schedule contains an
         agreement by the Chargor with the Chargee that the Chargor will not
         without first obtaining the prior written consent of the chargee create
         or purport or attempt to create any charge incumbrance or mortgage
         which by virtue of any law or regulation will rank pari passu with or
         in priority to this Charge or second or subsidiary to this Charge.




<PAGE>

                                  THE SCHEDULE

                               Within referred to

It is hereby further agreed and the Chargor and the Chargee hereby respectively
covenant with each other as follows:-

1.(a)    That the Chargor shall repay to the Chargee all Sum and/or interest and
         any other monies payable in accordance with the terms and conditions,
         covenants and agreements contained herein and in the Debenture and
         subsequent Supplemental Debentures and Variation of Debenture and
         Commitment letter,

  (b)    The rate of interest payable hereunder shall be such rate as is
         ascertained by the Chargee (as well after as before any judgment ) to
         be 1 1/2% above US$LIBOR. The interest rate shall be ascertained by the
         Chargee on the date hereof and shall be recalculated periodically I
         line with variations in the general level of interest rates until the
         Principal Sum and interest thereon or on the balance thereof
         outstanding from time to time and all other sums payable hereunder
         shall have been paid to the Chargee PROVIDED THAT if the date for
         calculation of interest hereunder shall fall on a day which is not a
         business day such calculating shall be made on the next succeeding
         business day and for the purposes of this sub-clause the words "
         business day" shall mean a day when banks are open for business in the
         Cayman Islands and New York City, U.S.A.

  (c)    The Chargor shall be at liberty during the continuance of this security
         to make Repayment of any part of the Principal Sum in accordance with
         the terms and conditions as set our in the Commitment Letter dated 25th
         April 2001. Repayment will be accepted by the Chargee provided that any
         such repayment of part must be of at least One Thousand United States
         Dollars or a multiple thereof and provided that any such repayment of
         part must be made on a monthly installment date hereinbefore mentioned
         and upon such additional payment being made principal and interest
         shall continue to be payable at a rate not less than that provided for
         in sub-clause 1 (a) hereof,

  (d)    The Chargor shall be at liberty at any time during the continuance of
         this security make repayment in accordance with the terms and
         conditions as set out in the Commitment Letter dated 25th April 2001.
         Any repayment of the whole of the Remaining balance of the Principal
         Sum and interest and any other monies due at The date of repayment
         shall be made as notified in writing by the Chargee to the Chargor.

2.(a)    If the Chargor shall repay to the Chargee the Principal Sum and
         interest thereon by the installments and at the times and in manner
         hereinbefore provided within seven(7) days after the dates on which the
         same are hereinbefore made payable and if the Chargor shall also
         perform and observe all the covenants conditions and stipulations
         herein contained or implied and on the Charger's part to be performed
         and observed other than the covenants for payment of the said
         installments then the Chargee shall accept such repayments of principal
         and interest by the said installments as aforesaid and the Chargee will
         not take steps to enforce the payment of the Principal Sum and interest
         or any part thereof.





<PAGE>

(b)      Provided always and it is hereby agreed that upon payment to the
         Chargee of the Principal Sum and interest and all other monies payable
         hereunder as notified in writing by the Chargee to the Chargor the
         Chargee will at any time thereafter upon reasonable notice and upon the
         request and at the cost of the Chargor discharge this Charge.

3.       Sub section (c) of Section 67 of the Registered Land Law (1995
         Revision) (hereinafter called "the above Law") (and sub-section (j)
         thereof only so far as it relates to the said sub-section (c)) shall
         not apply to this Charge nor to any instrument of variation executed
         pursuant to this Charge and instead thereof the Chargor shall keep or
         cause to be kept the Charged Premises and all such buildings or
         erections as may become for the time being subject hereto in good and
         substantial repair and condition and permit the Chargee and the agents
         of the Chargee at all reasonable time during the day time and without
         any further consent to enter into and upon the Charged Premises and
         inspect the same and view the state thereof and upon receipt of notice
         in writing from the Chargee shall immediately remedy restore repair
         amend and make good all such effects decays wants of reparation
         amendments and upkeep of the said buildings and erections and the gates
         walls and fences on the Charged Premises as the Chargee may require and
         if the Chargor shall neglect to do so that the Chargee may enter upon
         the Charged Premises with or without workmen or others from time to
         time in order to repair and keep in repair the same and without thereby
         becoming liable as a Chargee in possession and that the expenses of so
         doing shall be repaid by the Chargor to the Chargee on demand and in
         the meantime shall be added to the Principal Sum and bear interest
         accordingly.

4.       Sub-section (d) of Section 67 of the above Law (and sub-section (j)
         thereof only so far as it relates to the said sub-section (d)) shall
         not apply to this Charge nor to any instrument of variation executed
         pursuant to this Charge and instead thereof the Chargor shall so long
         as any money shall remain owing on the security of this Charge or any
         variation thereof insure and keep insured in their full insurable value
         any buildings or erections from time to time erected or in the course
         of erection on the Charged Premises with an insurance office of repute
         approved from time to time by the Chargee and against riot strike
         public liabilities fire lightning flood earthquake volcanic eruption
         hurricane cyclone tornado windstorm and any such other hazards and
         risks as the Chargee may from time to time require AND will punctually
         pay every sum from time to time payable for keeping on foot every such
         insurance or within seven (7) days after the first day upon which it
         becomes payable and will cause a note of this Charge's interest
         hereunder to be endorsed as aforesaid or other proper evidence of the
         subsistence thereof and also on demand deliver to the Chargee the
         receipt for or other sufficient evidence of payment of every sum
         payable as aforesaid AND that if the Chargor shall make default in any
         of the above matters the Chargee may insure and keep insured all or any
         of the said buildings in manner aforesaid and that the expense of so
         doing shall be paid by the Chargor to the Chargee on demand and in the
         meantime shall be added to the Principal Sum hereby secured and bear
         interest accordingly AND it is hereby agreed and declared that all
         monies received under or by virtue of any insurance as aforesaid
         whether received by the Chargor the Chargee or any receiver appointed
         by the Chargee (notwithstanding the provisions of Section 73 (7 ) of
         the above Law ) shall at the option of the Chargee either be forthwith
         applied in or towards substantially rebuilding reinstating or repairing
         the buildings or erections destroyed or damaged or in or towards
         payment of the monies for the time being secured by these presents
         including any premiums paid under the aforesaid power.

5.       The Chargor shall on the date hereof effect an insurance policy in
         respect of damage to the charges premises in a sum at least equal to
         the Principal Sum and interest and any other sums owing or outstanding
         upon the security of this Charge with an insurance company approved by
         the Chargee.




                                       2
<PAGE>

6.       Sub-section (f) and (g) of Section 67 of the above Law shall not apply
         to this Charge nor to any instrument of variation executed pursuant to
         this Charge and instead thereof the Chargor shall not during the
         continuance of this Charge without first obtaining the prior written
         consent of the Chargee lease or sub-lease or agree to lease or
         sub-lease or accept surrenders of leases or sub-leases or transfer or
         otherwise part with the possession of the charges premises or any part
         thereof.

7.       The right contained in Section 82 of the above Law to consolidate this
         Charge with any other charge is expressly reserved to the Chargee and
         the right to tack and rank in priority to any subsequent charge as
         contained in Section 81 of the above Law in respect of further advances
         made to the Chargor is also expressly reserved to the Chargee.

8.       The Chargor shall not create or purport or attempt to create any charge
         incumbrance or mortgage which by virtue of any law or regulation will
         rank pari passu with or in priority to this Charge or second or
         subsidiary to this Charge to act in any way which shall have the effect
         of diminishing or decreasing the valued of the security of this Charge
         without first obtaining the prior written consent of the Chargee.

9.       The Chargor shall not without the prior written consent of the Chargee
         make or permit or suffer to be made any material change to or addition
         whatsoever inn or to the Charged Premises or the use thereof.

10.      The Chargor shall pay all reasonable lawyer's costs and other costs and
         expenses that may be incurred by the Chargee of and incidental to the
         preparation completion stamping and registration of this Charge or any
         variation hereto and the protection and enforcement from time to time
         of the Chargee's rights hereunder.

11.      The Chargor covenants that the Chargor will on demand both before and
         after the security constituted hereby has become enforceable at the
         Chargor's own cost and expense during the continuance of this Charge do
         and execute or cause to be done and executed all such instruments acts
         deeds and things to perfect this security and to preserve and protect
         the rights and privileges of the Chargee granted by this Charge or by
         operation of law and to this end the Chargor hereby undertakes and
         agrees on demand to execute cause to be verified and delivered to the
         Chargee a power of attorney in form required by the Chargee in favour
         of the Chargee to enable the Chargee to register the same in the
         register of powers of attorney at the expense of the Chargor or with
         consent of the Registrar of Lands to file a copy thereof certified by
         the Registrar of Lands in the file of powers of attorney.

12.      In the event that the Chargor shall fail to discharge all monies and
         liabilities in full in accordance with the terms hereof or in the event
         that the Chargor shall be in breach of any of the Chargor's covenants
         or obligations herein contained whether expressed or implied or in the
         event that the Chargor commits any act of bankruptcy or makes any
         assignment or composition for the benefit of the Chargor's creditors or
         being a company goes into liquidation (other than a voluntary
         liquidation for the purposes of a reconstruction only the terms of
         which have been previously approved in writing by the Chargee ) or
         suffers the appointment of a receiver over any part of the Chargor's
         assets then in any such event the whole of the Principal Sum and all
         interest thereon and any other sums owing hereunder to the Chargee
         shall become immediately due and payable and the provisions of Sections
         72 to 75 of the above Law shall apply subject to the modifications
         hereinafter set forth;-



                                       3
<PAGE>

         (i)      the power of sale and of appointing a receiver and any other
                  remedies available to the Chargee shall become immediately
                  exercisable without further notice.

         (ii)     in addition to the remedies provided by Section 72 of the
                  above Law the Chargee shall have the right to foreclose or
                  enter into possession of the charges premises or both in the
                  same circumstances as would allow the Chargee to exercise its
                  power of sale or appoint a receiver.

         (iii)    in the event that the Chargee does appoint a receiver or enter
                  into possession of the Charged Premises the Chargee shall be
                  entitled to exercise its power of sale or Foreclosure at any
                  time thereafter without further notice

         (iv)     upon the exercise of its power of sale the Chargee shall have
                  the right to sell the Charged Premises by private treaty as
                  well as by public auction

         (v)      wherever there is a reference in Section 73 (6) of the above
                  Law to "five percent" this shall be read as "ten percent"

         (vi)     a receiver appointed by the Chargee shall have such powers in
                  addition to those set out in the above Law or any other law
                  relating thereto as the Chargee shall deem necessary
                  (including the right to sell the Charged Premises ) for the
                  proper enforcement and protection of the Chargee's rights
                  hereunder.

PROVIDED ALWAYS and its is herby expressly declared and agreed that in any case
where any such modification of the above Law (or any other modification provided
for in this Charge) shall require the sanction of the Court the Chargee shall
have the right at its option to waive any modification where it is in favor of
the Chargee to do so or to seek the sanction of the Court thereto and should the
Chargee fail to obtain the sanction of the Court to any particular modification
or should the Chargee elect to waive its rights under any modification then the
original provisions of the above Law shall apply without modification.

13.      This Charge is not assignable alienable or transferable by the Chargor.


14.      The Chargee may at any time transfer and assign the benefit of this
         Charge.


15.      No neglect omission or forbearance on the part of the Chargee to take
         advantage of or enforce any right arising out of any breach
         non-observance or non-performance of any covenant or condition herein
         contained or by law implied shall be deemed to operate as a general
         waiver of such covenant or condition or the right to take advantage
         thereof either original or recurring.

16.      The taking of judgment or judgments on any covenants contained in this
         Charge shall not operate as a merger of the said covenant or covenants
         or affect the Chargee's right to interest pursuant to the terms of this
         Charge.




                                       4
<PAGE>

17.      The Chargee shall not be liable for any loss which may occur by reason
         of the exercise or execution of any or all of its remedies and powers
         conferred given or implied by this Charge or by the Laws of the Cayman
         Islands.

18.      In the event that the Chargor is a Company the Chargor hereby
         represents and warrants to the Chargee that it is duly incorporated and
         existing in good standing under the Laws of the Cayman Islands (or
         under the Laws of some other jurisdiction and duly registered to carry
         on business in the Cayman Islands) and that it is qualified to do
         business wherever necessary to carry on its present operations and that
         the making and performance of this Charge is within its corporate
         powers having been properly authorized by all necessary governmental
         and corporate approvals and does not contravene any law or any
         contractual restriction binding on the Chargor and that the Charge is a
         legal valid and binding obligation of the Chargor enforceable against
         the Chargor in accordance with its terms and that there are no pending
         or threatened actions or proceedings before any court or administrative
         agency which may materially adversely affect the Chargor's financial
         conditions and operations.


19.      This Schedule shall be governed and construed solely accordingly to the
         Laws of the Cayman Islands.


20.      Any notice required to be given to or served on the Chargor or Chargee
         under these presents shall be deemed to be sufficiently served on or
         given to the Chargee if service thereof is in compliance with
         provisions of section 153 of the Registered Land Law (1995 Revision) as
         the same may be amended from time to time.

21.(a)   The expression "this Charge" shall mean the Charge annexed hereto
         as negatived modified or added to by this Schedule and all other
         securities provided taken or available to the Chargee thereunder
         including any power of attorney and the expression " the charges
         premises" shall mean the land the subject of this Charge (or any part
         or parts thereof) and all buildings erections fixtures and fittings now
         or from time to time situate thereon or on some part or parts thereof.

   (b)   In this Charge where the context so admits the words importing the
         masculine gender shall include the feminine gender and vice versa and
         words importing the singular number only shall include the plural
         number and vice versa and words importing persons and all reference to
         persons shall include corporations and firms.




                                       5
<PAGE>

(c)      In this Charge where the context so admits the expression "the Chargor"
         shall include persons deriving title under the Chargor or entitled to
         redeem this Charge and the expression " the Chargee" shall include
         persons deriving title under the Chargee to any reference herein to any
         statue or section of any statue shall be deemed to include reference to
         any statutory modification or re-enactment thereof for the time being
         in force.

(d)      If there are two or more parties hereto comprising the Chargor the
         expression "the Chargor" shall throughout mean and include such two or
         more parties and each of them or (as the case may require) such tow or
         more parties or any of them and shall so far as the context so admits
         be construed as well in the plural as in the singular and all covenants
         charges agreements and undertakings herein expressed or implied on the
         part of the Chargor shall be deemed to be joint and several covenants
         charges agreements and undertakings by such parties.




                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.52
<SEQUENCE>11
<FILENAME>g75127ex10-52.txt
<DESCRIPTION>LEASE
<TEXT>
<PAGE>
                                                                   Exhibit 10.52


                                      LEASE

THIS LEASE is made the 10th day of December __, 2001,


BETWEEN:    CAYMAN HOTEL & GOLF INC., a Canada corporation, of P.O. Box 1698,
            George Town, Grand Cayman B.W.I. ("the Landlord")

AND:        CONSOLIDATED WATER CO. LTD., a Cayman Islands company,  of P.O.
            Box 1114, George Town, Grand Cayman B.W.I. ("the Tenant")

AND WITNESSES as follows:-

1.       In this Lease:-

         (1)      unless inconsistent with the context or subject matter or
                  circumstances the following expressions have the following
                  meanings:-

                  (a)      "the Adjoining Property" means the lands comprised in
                           West Bay Beach South Registration Section Block 12C
                           Parcels 27 and 154, Block 12D Parcels 24, 26 and
                           79REM1 (other than the Land) and Block 12E Parcels
                           88, 89 and 94 and any other land which adjoins the
                           Land in which the Landlord during the Term acquires
                           an interest as proprietor or tenant.

                  (b)      "the Building" means the building on the Land in
                           which the Tenant's water plant and the laundry for
                           the Hotel are situated shown edged blue on the Plan.

                  (c)      "the Common Areas" means all those parts of the
                           Landlord's adjoining land shown hatched in red on the
                           Plan.

                  (d)      "Conduits" includes wires, cisterns, chutes or pipes
                           for the supply of water, telephone, electricity and
                           gas and the disposal of domestic waste in, under or
                           over the Land.

                  (e)      "the Land" means the land and buildings comprised in
                           this Lease and shown for the purposes of
                           identification only edged red on the Plan but
                           excluding the Landlord's Building.

                  (f)      "the Landlord's Building" means the building marked
                           "Golf Cart Maintenance" hatched green on the Plan,
                           and any of its contents from time to time.

                  (g)      "the Landlord" and "the Tenant" include their
                           respective successors in title.

                  (h)      "Notice" includes demand and vice versa.

                  (i)      "the Plan" means the plan of the Land attached marked
                           "Lease Plan".





                                       1
<PAGE>

                  (j)      "the Plant" means the machinery, equipment and
                           personal property described and listed in the
                           Schedule.

                  (k)      "the Right of Way" means all that part of the Land
                           shown delineated in red on the Plan.

                  (l)      "the RO Area" means the area of the Building edged in
                           red and shown on the Plan.

                  (m)      "share(d)" means share(d) with the Landlord.

                  (n)      "the Term" means twenty-five (25) years starting on
                           1st]. -

                  (o)      "the Water Supply Agreement" means an agreement for
                           the supply of water to the Hotel dated the same day
                           as this Lease and made between the Landlord and the
                           Tenant.

(2)(a)   An obligation not to do something includes an obligation not to permit
         or suffer others to do it.

(b)      An obligation imposed is to be performed and a power or right conferred
         is exercisable, in each case from time to time.

(c)      Consent, approval and notice must be in writing.

(d)      The headings are for convenience only and have no legal effect.

(e)      References to the Laundry include parts of it.

(f)      References to the Land include parts of it.

(g)      Words of one gender include words of any other gender.

(h)      Singular words include the plural and vice versa and where there are
         two or more persons included in the expression "the Tenant", agreements
         made by the Tenant are joint and separate.



                                       2
<PAGE>

2. RENT

     The Landlord LEASES the Land to the Tenant for the Term together with the
     rights set out in sub-clause 5(ii) but excepting and reserving to the
     Landlord the rights set out in sub-clause 5(i), subject to the right of
     re-entry in Clause 5(iv), at the rent of One United States Dollars
     (US$1.00) per year. The Tenant must pay the rent in United States Dollars
     to the Landlord in advance on or before the 1st day of.

3. TENANT'S AGREEMENTS

     The Tenant agrees with the Landlord:-

         (i) PAYMENTS

         to pay:-

         (a)      the rent without any set off or counterclaim in accordance
                  with Clause 2;

         (b)      all rates, taxes, assessments, duties, charges, impositions
                  and outgoings that are or now or may at any time during the
                  Term be charged, assessed or imposed upon the Land or upon the
                  owner or occupier of it. The Tenant must also pay and
                  indemnify the Landlord against the proportion reasonably
                  attributable to the Land of all rates, taxes, assessments,
                  duties, charges, impositions and outgoings that are now or may
                  at any time during the term be charged, assessed or imposed on
                  the Land and any other property including Adjoining Property
                  or on their owners or occupiers;

         (c)      the stamp duty on this Lease and on one copy and its own legal
                  fees; and

         (d)      to the Landlord on an indemnity basis all costs, fees,
                  charges, disbursements and expenses including without
                  prejudice to the generality of the above those payable to
                  counsel, solicitors, surveyors and bailiffs incurred by the
                  Landlord in relation to or incidental:-

                  (1)      Every application made by the Tenant for a consent or
                           licence required by the provisions of this Lease
                           whether it is granted, refused or offered subject to
                           any qualification or condition or the application is
                           withdrawn

                  (2)      The contemplation, preparation and service of any
                           notices under this Lease or in contemplation of
                           proceedings against the Tenant even if forfeiture is
                           avoided otherwise than by relief granted by the court

                  (3)      The recovery or attempted recovery of arrears of rent
                           or other sums due under this Lease and any steps
                           taken in contemplation of or in connection with the
                           preparation and service of a schedule of dilapidation
                           during or after the end of the Term.




                                       3
<PAGE>

REPAIR

         (ii)(a)   to keep every part of the Land (other than the Building)
                  and the interior of the RO Area and all fixtures, fittings and
                  equipment in it owned by the Landlord in good condition,
                  clean, tidy and well-decorated, fair wear and tear and damage
                  of which the Tenant, its licensees, invitees or visitors are
                  not the cause excepted; and

             (b)  to permit the Landlord and its agents to paint or treat the
                  outside of the Building and all doors leading into the RO Area
                  and the outside of all windows and walls in the RO Area in
                  such colour and manner as the Landlord decides.

NO ALTERATION

         (iii)    not to alter, cut or damage the RO Area or any other part of
                  the Building without the Landlord's consent (which is deemed
                  to be given to the extent that it is within the RO Area and is
                  required for the operation of the Tenant's business situated
                  therein) and not to make any exterior alteration in the
                  appearance of the Building; and if it does so, to pay the
                  Landlord on demand the entire cost which the Landlord incurs
                  in repairing or replacing that damage.

NUISANCE

         (iv)     save as may be required for the normal operation of the
                  Tenant's business, not to do on or in the Land or any part of
                  the Building anything which in the Landlord's opinion:-

                  (a)      is a nuisance to others;

                  (b)      is dangerous; or

                  (c)      might prejudice the Landlord's insurance cover or
                           increase the premium

                  and in particular, but without prejudice to the generality of
                  the foregoing or of the exception referred to, not to use on
                  the Land any chemicals which either individually or in
                  combination are noxious or explosive.

     ENTRY

         (v)(a)   to permit the Landlord and its agents to enter at all
                  reasonable times on reasonable notice except in an emergency
                  (when no notice is required) to:-

                  (1)      ascertain whether or not the covenants and conditions
                           of this Lease have been observed and performed and to
                           view the state of repair and condition of the Land;

                  (2)      carry out repairs;



                                       4
<PAGE>

                  (3)      do any work which the Tenant should have done under
                           this Lease;

                  (4)      comply with its other obligations under this Lease;

                  (5)      give to the Tenant or leave on the Land a notice
                           specifying the works required to remedy any breach of
                           the Tenant's obligations in this Lease.

         (b)      to carry out the work specified in any such notice to repair
                  as soon as possible.

         (c)      if within one month of service of a notice to repair the
                  Tenant has not started to execute the work referred to in that
                  notice or is not proceeding diligently with it or if the
                  Tenant fails to finish the work within two months, to permit
                  the Landlord to enter the premises to execute the outstanding
                  works and pay to the Landlord the cost of so doing and all
                  expenses incurred by the Landlord including legal costs and
                  surveyors fees within seven days of demand.

     ASSIGNMENT & SUB-LETTING

         (vi)(a)  not to assign, sublet or charge part only of the Land.

             (b)  save in respect of the floating Charge under the Tenant's
                  existing Debenture granted to the Royal Bank of Canada or any
                  Debenture replacing it, not to assign, sub-let or charge the
                  whole of the Land without the consent of the Landlord whose
                  consent may not be unreasonably withheld except that the
                  Tenant may without that consent and subject to it remaining
                  fully liable to the Landlord in all respects assign this Lease
                  to

                  o        any wholly owned subsidiary company or any company
                           which owns all of the Tenant's shares, or

                  o        any successor to the Tenant by consolidation, merger
                           or other corporate action;

                 in every case, each assignee of the Tenant assuming and being
                 taken to have assumed this Lease and being liable in addition
                 to the Tenant, from the date of the assignment, to comply with
                 all the Tenant's obligations in it but:-

                  (1)      if any of the following circumstances apply either at
                           the date when application for consent to assign is
                           made to the Landlord or after that date but before
                           the Landlord's consent is given the Landlord may
                           withhold its consent and if, after the Landlord's
                           consent has been given but before the assignment has
                           taken place, any such circumstances apply the
                           Landlord may revoke his consent. The circumstances
                           are:-

                           (i)      That any sum due from the Tenant under this
                                    Lease remains unpaid.

                           (ii)     That in the Landlord's reasonable opinion
                                    the assignee is not a person who is likely
                                    to be able to comply with the Tenant's



                                       5
<PAGE>

                                    covenants of this Lease and to continue to
                                    be able to comply with them following the
                                    assignment.


                           (iii)    That the assignee or any guarantor for the
                                    assignee is a corporation registered or
                                    otherwise resident in a jurisdiction in
                                    which the order of a court obtained in the
                                    Cayman Islands will not necessarily be
                                    enforced against the assignee or guarantor
                                    without any consideration of the merits of
                                    the case.

                  (2)      The Landlord may impose any or all of the following
                           conditions on giving any consent for an assignment by
                           the Tenant and any such consent is to be treated as
                           being subject to each of the following:-

                           (i)      A condition if reasonably so required by the
                                    Landlord on an assignment to a limited
                                    company that the assignee must ensure that
                                    at least two directors of the company or
                                    some other guarantor or guarantors
                                    acceptable to the Landlord enter into direct
                                    covenants with the Landlord in such form as
                                    the Landlord shall specify.

                           (ii)     A condition that if at any time before the
                                    assignment the circumstances specified in
                                    clause (c) above or any one of them apply
                                    the Landlord may revoke the consent by
                                    written notice to the Tenant.

         (c)      not to grant a permitted sublease with a fine or premium and
                  to grant it on similar terms to this Lease containing
                  provisions:-

                  (1)      Prohibiting the sub-tenant from doing or allowing
                           anything in relation to the Land inconsistent with or
                           in breach of the provisions of this Lease.

                  (2)      For re-entry by the sub-landlord on breach of any
                           covenant by the sub-tenant imposing an absolute
                           prohibition against all dealings with the premises
                           other than an assignment.

                  (3)      Requiring the assignee on any assignment of the
                           sublease to enter into direct covenants with the
                           Landlord in such form as the Landlord shall require.

                  (4)      Prohibiting the sub-tenant from holding on trust for
                           another or permitting another to share or occupy the
                           whole or any part of the Land.

                  (5)      Imposing in relation to any permitted assignment the
                           same obligations for registration with the Landlord
                           as are contained in this Lease in relation to
                           dispositions by the Tenant.

         (d)      before any permitted subletting, to ensure that the sub-tenant
                  enters into a direct covenant with the Landlord that during
                  the period of the sublease the sub-tenant will observe and
                  perform the Tenant's covenants contained in this Lease.




                                       6
<PAGE>

NOTICE OF ASSIGNMENT & SUB-LETTING

         (vii)    save in respect of the floating Charge under the Tenant's
                  existing Debenture granted to the Royal Bank of Canada or any
                  Debenture replacing it, to give notice to the Landlord within
                  one month after any transaction under Clause 3(vi) or any
                  charge over this Lease, supplying a copy of the instrument.

TELEPHONE AND ELECTRICITY AND OTHER SERVICES

         (viii)   to pay to the suppliers or reimburse the Landlord for its due
                  proportion of (as the case may be) all charges for the
                  installation of telephones (if required) and all bills for
                  their use and pay to the suppliers or reimburse the Landlord
                  for its due proportion of (as the case may be) all charges for
                  the use of electricity and all other services on the Land.

COMPLY WITH LAWS

         (ix)     to comply as if it were the freeholder with the legitimate
                  requirements of any authority relating to the Land; and to
                  give the Landlord promptly a copy of any permission, notice or
                  order relating to the Land which any authority serves on or
                  issues to the Tenant; and, if the Landlord requires, to make
                  either alone or jointly with the Landlord objections or
                  representations against the notice or order as the Landlord
                  directs.

LICENCES

         (x)      to obtain and whenever necessary renew all licences and make
                  all returns which are necessary to enable it to operate its
                  business and to pay all licence and other annual fees when
                  they fall due.

INSURANCE

         (xi)     to pay for all insurance effected by the Tenant, and not to
                  insure the RO Area against any risk which the Landlord insures
                  against; and to insure against public liability in respect of
                  injury or damage to persons when on the Land in an amount of
                  not less than One Million United States Dollars
                  (US$1,000,000.00) per accident.

GIVE UP POSSESSION

         (xii)    subject to Clause 5(ii)(b), to leave the Land when this Lease
                  ends clean and secure in every respect and in repair in
                  accordance with the Tenant's obligations in this Lease.

INDEMNITY

         (xiii)   to keep the Landlord, Hyatt Corporation and Hyatt Britannia
                  Corporation, Ltd., as agent of Cayman Hotel & Golf Club
                  Partnership, an Ontario Limited Partnership, d/b/a Hyatt
                  Regency Grand Cayman, fully indemnified against all losses
                  arising




                                       7
<PAGE>

                  directly or indirectly out of any act, omission or negligence
                  of the Tenant or any persons at the Land or the Common Areas
                  expressly or impliedly with his authority or out of any breach
                  or non-observance by the Tenant of the covenants, conditions
                  or other provisions of this Lease or any other matters to
                  which this Lease is subject.

INTEREST ON ARREARS

         (xiv)    to pay interest at the rate of 3% above the prime lending rate
                  of Barclays Bank Plc from time to time on any sums due under
                  this Lease that are not paid when due whether formally
                  demanded or not. Nothing in this clause entitles the Tenant to
                  withhold or delay any payment of sum due under this Lease or
                  affects the rights of the Landlord in relation to any
                  non-payment.

ENVIRONMENTAL PROTECTION

         (xv)     (a) not to cause or permit any noxious or offensive emissions
                  from any apparatus on the Land.

                  (b)      not to permit any oil or grease or any deleterious
                           objectionable, noxious, dangerous, poisonous or
                           explosive matter or substance to be discharged into
                           any of the Conduits and take all measures to ensure
                           that any effluent discharged into the Conduits does
                           not harm the environment or corrode or otherwise harm
                           the Conduits or cause any obstruction or deposit in
                           them.

                  (c)      to take all practical precautions to ensure that no
                           noxious substances are spilled or deposited on the
                           Land and that contamination does not occur.

                  (d)      within 14 days of the spilling or deposit on the Land
                           of any noxious substance in a quantity that may cause
                           serious damage to or pollution of the environment or
                           serious damage to property or serious harm to human
                           health, to inform the Landlord of this and permit him
                           to enter and inspect the Land.

                  (e)      to indemnify the Landlord and keep him indemnified
                           against any losses in respect of damage to or
                           pollution of the environment or damage to property or
                           harm to human health caused by the Tenant's
                           operations on the Land whether in liquid or solid
                           form or in the form of gas or vapour.

         For the purposes of this sub-clause, the expression "Conduits" does not
         include conduits which are part of the Plant.

ROOF AND FLOOR LOADING

         (xvi)    not to bring into the RO Area any machinery or other articles
                  that will or may strain or damage the Building or any part of
                  it.

4. LANDLORD'S AGREEMENTS

         The Landlord agrees with the Tenant:-





                                       8
<PAGE>

QUIET ENJOYMENT

         (i)      that if the Tenant complies with all its agreements and
                  obligations it will, subject to the terms of this Lease and
                  subject to the rights reserved to the Landlord under this
                  Lease, occupy the Land during this Lease free from disturbance
                  and without any interruption by the Landlord or any person
                  rightfully claiming under or in trust for it.

INSURANCE

         (ii)     to insure the Building with a reputable insurance company.

REPAIR

         (iii)    to put and keep the Building in good repair (except in respect
                  of repairs for which the Tenant is responsible).

INDEMNITY

         (iv)     to keep the Tenant, its servants, agents and visitors fully
                  indemnified against all losses arising directly or indirectly
                  out of any act, omission or negligence of the Landlord or any
                  persons at the Land or the Common Areas expressly or impliedly
                  with his authority or out of any breach or non-observance by
                  the Landlord of the covenants, conditions or other provisions
                  of this Lease or any other matters to which this Lease is
                  subject.

ENVIRONMENTAL PROTECTION

         (v)      (a)      not to cause or permit any noxious or offensive
                           emissions from any apparatus in the Landlord's
                           Building.

                  (b)      not to permit any oil or grease or any deleterious
                           objectionable, noxious, dangerous, poisonous or
                           explosive matter or substance to be discharged into
                           any of the Conduits and take all measures to ensure
                           that any effluent discharged into the Conduits does
                           not harm the environment or corrode or otherwise harm
                           the Plant or cause any obstruction or deposit in any
                           of the Conduits forming part of it.

                  (c)      to take all practical precautions to ensure that no
                           noxious substances are spilled or deposited on the
                           Land and that contamination does not occur.

                  (d)      within 14 days of the spilling or deposit on the Land
                           of any noxious substance in a quantity that may cause
                           serious damage to or pollution of the environment or
                           serious damage to property or serious harm to human
                           health, to inform the Tenant of this.

                  (e)      to indemnify the Tenant and keep it indemnified
                           against any losses in respect of damage to or
                           pollution of the environment or damage to property or
                           harm to




                                       9
<PAGE>

                           human health caused by the Landlord's operations in
                           the Landlord's Building or the Adjoining Land whether
                           in liquid or solid form or in the form of gas or
                           vapour.

5. IT IS AGREED:-

LANDLORD'S RIGHTS

         (i)      The rights set out below are excepted and reserved from the
                  Lease in favour of the Landlord and all others now entitled or
                  who may become entitled:-

                  (a)      The free and uninterrupted passage and running of all
                           appropriate services and supplies from and to other
                           parts of the Adjoining Property and the Landlord's
                           Building in and through any Conduits other than those
                           forming part of the Plant.

                  (b)(i)   The right to construct and maintain at any time
                           during the Term any pipes, sewers, drains, mains,
                           ducts, conduits, gutters, watercourses, wires,
                           cables, channels, flues and all other conducting
                           media including any fixings and ancillary apparatus
                           for the benefit of any part of the Adjoining Property
                           and the Landlord's Building making good any damage
                           caused by the exercise of the right.

                     (ii)  The right to relocate any existing pipes, sewers,
                           drains, mains, ducts, gutters, watercourses,
                           channels, flues and other conducting media other than
                           those forming part of the Plant in any manner
                           whatsoever.

                  (c)      The right for the Landlord and all persons expressly
                           or by implication authorised by it to pass and repass
                           to and from the Adjoining Property at all times for
                           all purposes connected with the use and enjoyment of
                           the Landlord's Building.

                  (d)      The right to enter or in emergency to break into and
                           enter the Land at any time during the Term at
                           reasonable times and on reasonable notice except in
                           emergency:-

                     (i)   To inspect, clean, connect with, repair, remove,
                           replace with others, alter or execute any works
                           whatever to or in connection with the conduits,
                           easements or services referred to in this Clause 5.

                     (ii)  To carry out work or do anything whatsoever that the
                           Landlord is obliged to do under this Lease.

                     (iii) To exercise any of the rights granted to the Landlord
                           by this Lease.

                  (e)      The right to erect scaffolding for the purposes of
                           inspecting, repairing or cleaning the Building.




                                       10
<PAGE>

                  (f)      The rights of light, air, support, shelter,
                           protection and all other easements and rights at the
                           date of this Lease belonging to or enjoyed by other
                           parts of the Building or any other buildings and any
                           Adjoining Property.

                  (g)      For the right and liberty at any time after the date
                           of this Lease, to alter, raise the height of or
                           rebuild any building on any Adjoining Property.

                  (h)      The right for the Landlord and the lessees and
                           occupiers for the time being of the Landlord's
                           Building at all times with or without motor vehicles
                           to pass and repass along and over the Right of Way to
                           and from the Adjoining Property during the Term but
                           the Landlord will keep the Tenant indemnified from
                           and against any act, loss, damage or liability
                           suffered by the Tenant in the exercise of the rights
                           in this sub-clause (h).

TENANT'S RIGHTS

         (ii)(a)  the Tenant and its servants, agents and visitors have the
                  right to share the use of:-

                  o        a right of access 12 feet wide with or without
                           vehicles and equipment to well pump #1 shown on the
                           Plan and including an area 10 feet in radius from the
                           centre of the well head;

                  o        the Common Areas to get to and from the Land with or
                           without motor vehicles;

                  o        the conduits in the Building which serve the RO Area;

             (b)  on or at any time before termination of this Lease for any
                  reason (including under Clause 5(iv)), the Tenant may detach
                  all items affixed to the Land and used for the purposes of its
                  business and remove them without interference by the Landlord.
                  In the case of termination by expiry of the Term, the Tenant
                  must complete the detachment and removal by the end of the
                  Term, but in case of termination for any other reason
                  (including under Clause 5(iv)), the Tenant will have an
                  additional thirty (30) days after termination during which it
                  will be entitled to enter on the Land with or without vehicles
                  and workmen to detach and remove those items. In either case,
                  the Tenant must do as little damage to the Property as
                  possible during such detachment and removal but otherwise has
                  no obligation to repair or restore the Land or any building on
                  it after completion of the detachment and removal.

TERMINATION ON DAMAGE

         (iii)(a) If and whenever the Building or any part of it is damaged
                  or destroyed and payment of the insurance money is not wholly
                  or partly refused because of any act or default of the Tenant
                  or anyone at the Building or on the Land expressly or by
                  implication with his authority the Landlord must use his
                  reasonable endeavours to obtain all planning permissions or
                  other permits and consents




                                       11
<PAGE>

                  ("permissions") that are required under the planning laws or
                  otherwise to enable him to rebuild and reinstate the Building.

         (b)      Subject to the provisions of clause (c) and, if any
                  permissions are required, after they have been obtained the
                  Landlord must as soon as reasonably practicable apply all
                  money received in respect of the insurance in rebuilding or
                  reinstating the Building.

         (c)      The Landlord need not rebuild or reinstate the Building if and
                  for so long as rebuilding or reinstatement is prevented
                  because:-

                  (i)      the Landlord despite using his reasonable endeavours
                           cannot obtain any necessary permission.

                  (ii)     any permission is granted subject to a condition with
                           which it is unreasonable to expect the Landlord to
                           comply.

                  (iii)    there is some defect or deficiency on the site on
                           which the rebuilding or reinstatement is to take
                           place that means it can only be undertaken at a cost
                           that is unreasonable in all the circumstances.

                  (iv)     it is unable to obtain access to the Land to rebuild
                           or reinstate.

                  (v)      of any other circumstances beyond the Landlord's
                           control.

         (d)      If at the end of the period of one year commencing on the date
                  of damage or destruction the Building is still not fit for the
                  Tenant's occupation and use either the Landlord or the Tenant
                  may by notice served at any time within three months of the
                  end of that period terminate this Lease and upon service of
                  such notice the Term is to cease absolutely but without
                  prejudice to any rights or arrears that may have accrued to
                  either party for breach of the terms of this Lease including
                  this Clause 5(iii) and all money received in respect of the
                  insurance effected by the Landlord is to belong to the
                  Landlord absolutely.

TERMINATION

(iv)     If and whenever during the Term:-

         (a)      the Tenant breaches any of the covenants or conditions of this
                  Lease and any such breach is not remedied within thirty (30)
                  days of receipt of notice of any such breach from the
                  Landlord;

         (b)      the Tenant being an individual becomes bankrupt or being a
                  company enters into liquidation either compulsorily or
                  voluntarily (except for the purpose of reconstruction or
                  amalgamation);

         (c)      the Tenant enters into any arrangement or composition for the
                  benefit of its creditors;




                                       12
<PAGE>

         (d)      any distress or execution is levied on the Tenant's goods and
                  is not remedied within thirty (30) days of the date of the
                  levying of any such distress or execution;

         (e)      the Tenant is unable to pay its debts within the meaning of
                  The Companies Law (2001 Second Revision) or any amendment,
                  alteration or re-enactment of it; or

         (f)      the Water Supply Agreement is lawfully terminated by the
                  Landlord

         then the Landlord may at any time, and despite the waiver of any
         previous right of entry, enter the Land or any part of it in the name
         of the whole so ending this Lease, but without prejudice to any rights
         or remedies which may have accrued to the Landlord under it.

INSPECTION OF POLICIES

(v)      the Landlord and the Tenant each has the right to inspect the insurance
         policies issued to the other pursuant to this Lease.

MAKE GOOD DAMAGES

(vi)     the Landlord must make good any damage done when exercising its rights,
         except to the extent that the damage results from the Tenant's
         negligence or breach of obligation; but the Landlord will not be liable
         for any inconvenience or consequential loss resulting from the exercise
         of its rights.

ACCIDENT & INJURY

(vii)    the Landlord will not be responsible to the Tenant for any accident or
         injury to any individual or for damage to or loss of any goods or other
         property sustained on the Land unless the accident or injury results
         from the negligence of the Landlord or its agents.

NEGLECT & FORBEARANCE

(viii)     no neglect, forbearance or omission by the Landlord to take advantage
           of or enforce any right or privilege arising out of any breach by the
           Tenant (whether original or recurring) of any obligation (express or
           implied) will operate as or be deemed to be a general waiver of the
           its entitlement to take advantage of or enforce that right or
           privilege.

TENANT'S FAILURE TO INSURE

(ix)       if the Tenant at any time does not insure in accordance with its
           obligations under this Lease, the Landlord may do so and the Tenant
           must pay on demand any money which the Landlord spends for that
           purpose.



                                       13
<PAGE>

REGISTERED LAND LAW

(x)        the terms of this Lease, where inconsistent with the provisions of
           The Registered Land Law, will where permitted by law prevail; and the
           covenants implied by sections 52 and 53 of the Registered Land Law
           are excluded.

RIGHT TO SELL

(xi)       if after the Tenant has vacated the Land at the end of this Lease any
           of the Tenant's property remains in the RO Area and the Tenant does
           not remove it within the thirty (30) days referred to in Clause
           5(ii)(c), the Landlord may as the Tenant's agent sell that property
           and after deducting from the proceeds of sale the costs and expenses
           of removal storage and sale, the Landlord will hold the balance to
           the Tenant's order; and the Tenant must indemnify the Landlord
           against any liability which it incurs to any third party whose
           property the Landlord sells in good faith and in the mistaken belief
           (which will be assumed unless the contrary is proved) that the
           property belonged to the Tenant.

NO REPRESENTATIONS

(xii)      this Lease contains the entire agreement between the parties; each
           party acknowledges that it has not entered into this Lease in
           reliance wholly or partly on any statement or representation made by
           or on behalf of the other unless it is expressly set out in this
           Lease.

EXCEPTIONS

(xiii)     despite anything to the contrary in this Lease, the Tenant has no
           responsibility to repair or maintain or in any way to take care of
           the Landlord's Building or the Common Areas.

NOTICES

(xiv)      a notice or other document will be deemed to be duly served by a
           party either delivering or sending it by prepaid registered mail
           addressed to the other party at the address stated at the beginning
           of this Lease or to its registered office or last-known address. The
           notice or other document will be deemed to be received by the other
           party on delivery or seventy-two (72) hours after posting, as the
           case may be.

GOVERNING LAW

(xv)       this Lease is governed by and must be construed in accordance with
           the laws of the Cayman Islands and the parties agree to submit to the
           jurisdiction of the courts of the Cayman Islands.



                                       14
<PAGE>

                                  THE SCHEDULE

                                    THE PLANT

1       SEAWATER REVERSE OSMOSIS PLANT SKID #4 COMPRISED OF:

        CARTRIDGE FILTER

        Brand Name:                         No Name Plate
        Model #:                            NA
        Serial #:                           NA

        HIGH PRESSURE PUMP

        Brand Name:                         WHEATLEY
        Model #:                            HP165M
        Serial #:                           12834

        MOTOR

        Brand Name:                         TOSHIBA (HOUSTON)
        Model #:                            B-1254FLA4UD
        Serial #:                           AB54699-1

        ENERGY RECOVERY TURBINE

        Brand Name:                         CALDER
        Model #:                            PT8650 E1 (or) NP4840/A
        Serial #:                           NA

        MEMBRANE ELEMENT HOUSINGS

        Description:                        23 Housings and element-single
                                            element per housing

        Membranes                           Dupont

        DRAW BACK TANK
        WATER METER
        CONTROL PANEL

2       SEAWATER REVERSE OSMOSIS PLANT SKID #5 COMPRISED OF:

        CARTRIDGE FILTER

        Brand Name:                         EXCEL
        Model #:                            30EFCS3-3C150
        Serial #:                           NA

        HIGH PRESSURE PUMP

        Brand Name:                         WHEATLEY
        Model #:                            HP165M
        Serial #:                           NA

        MOTOR

        Brand Name:                         SIEMENS
        Order #:                            2-312-LR91633-2
        Serial #:                           NA



                                       15
<PAGE>

        ENERGY RECOVERY TURBINE

        Brand Name:                         CALDER
        Model #:                            PT8650 E1 (or) NP4840/A
        Serial #:                           NA

        MEMBRANE ELEMENT HOUSINGS

        Description:                        12 twin housings-PERMASEP
        Membranes                           Dupont

        DRAW BACK TANK
        WATER METER
        CONTROL PANEL

3       SEAWATER REVERSE OSMOSIS PLANT SKID #6 COMPRISED OF:

        CARTRIDGE FILTER

        Brand Name:                         OSMONICS
        Model #:                            HX1620-3 OT-PVC-D
        Serial #:                           96-A49103-1

        HIGH PRESSURE PUMP

        Brand Name:                         WHEATLEY
        Model #:                            HP165AM  /29613-B
        Serial #:                           22747

        MOTOR

        Brand Name:                         SIEMENS
        Order #:                            2-5106-LR90303-1
        Serial #:                           NA

        ENERGY RECOVERY TURBINE

        Brand Name:                         CALDER
        Model #:                            RO-4034 1390 15
        Serial #:                           NA

        MEMBRANE ELEMENT HOUSINGS

        Description:                        20 B-10 PERMASEP Housings-one
                                            membrane per housing

        Membranes                           DUPONT

        DRAW BACK TANK
        WATER METER
        CONTROL PANEL




                                       16
<PAGE>

4       SEAWATER REVERSE OSMOSIS PLANT SKID #7 COMPRISED OF:

        CARTRIDGE FILTER

        Brand Name:                         EXCEL
        Model #:                            30EFCS3-3C150
        Serial #:                           NA

        HIGH PRESSURE PUMP

        Brand Name:                         WHEATLEY
        Model #:                            HP165AM  /29613-B
        Serial #:                           23852

        MOTOR

        Brand Name:                         TICO AMERICA
        Model #:                            NA
        Serial #:                           NA

        ENERGY RECOVERY TURBINE

        Brand Name:                         CALDER
        Model #:                            RO-290-40
        Serial #:                           021-97-A2316

        MEMBRANE ELEMENT HOUSINGS

        Description:                        1) 4 Triples (3 membranes per
                                            housing), no name brand on housings
                                            2) 2 Doubles (2 membranes per
                                            housing), PERMASEP

        Membranes                           DUPONT

        DRAW BACK TANK
        WATER METER
        CONTROL PANEL

5       POTABLE WATER OZONATION SYSTEM COMPRISED OF:

        AIR COMPRESSOR PACKAGE

        Brand Name:                         INGERSOLL RAND
        Model #:                            SS-EP15
        Serial #:                           LX0230U98043

        AIR COMPRESSOR MOTOR

        Brand Name:                         US ELECTRIC MOTOR DIVISION
                                            OF EMERSON ELECT CO.
        Model #:                            T589A
        ID #:                               B01A339RO65F



        MOISTURE SEPARATOR

        Brand Name:                         THERMAL TRANSFER PRODUCTS
        Model #:                            S-100-AD
        ID #:                               S-6019





                                       17
<PAGE>

        REFRIGERATED DRYER

        Brand Name:                         INGERSOLL RAND
        Model #:                            DXR50
        Serial #:                           97LDXR5563

        OXYGEN CONCENTRATOR

        Brand Name:                         AIRSEP-NATL BD 72602K-CERTIFIED
                                            BY BRUNNER ENG & MFG INC.
        Model #:                            AS-160/250/450
        Serial #:                           NA

        OXYGEN RECEIVER

        Brand Name:                         NATL.BD NO.182314-CERTIFIED
                                            BY STEEL FAB
                                            ABINGDON VA.
        PART #:                             CRN C7228.1C
        Serial #:                           NA

        OZONE GENERATOR

        Brand Name:                         OSMONICS
        Model #:                            HC-5
        Serial #:                           NA

        OZONE INJECTOR MOTOR

        Brand Name:                         BALDOR
        Cat#:                               JWMDM3616T
        Serial #:                           NA

        CENTRIFUGAL PUMP(OZONE INJECTOR)

        Brand Name:                         WAUKESHA CHERRY BURRELL
        Model #:                            U2065
        Serial #:                           2200989

        DISSOLVED OZONE MONITOR

        Brand Name:                         OREC/OSMONICS
        Model #:                            NA
        Serial #:                           NA

        AC DRIVE

        Brand Name:                         MEGNETEK
        Model #:                            GPD 506   N12-506V-B014
        Serial #:                           34469






                                       18
<PAGE>

6       HIGH SERVICE WATER DISTRIBUTION PUMP SYSTEM COMPRISED OF:

        DWPO4

        CENTRIFUGAL PUMP

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            C820AM
        Serial #:                           152587B

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Cat #:                              JMM2514T
        Spec #:                             39K35W525

        DWPO5

        CENTRIFUGAL PUMP

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            C820AM
        Serial #:                           152587A

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Cat #:                              JMM2514T
        Spec #:                             39K35W528

        DWPO7

        CENTRIFUGAL PUMP

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            C820AM
        Serial #:                           152587C

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         US ELECTRICAL MOTORS
        Model #:                            E685A
        Serial #:                           BO1A287RR087F

7       DOMESTIC WATER TRANSFER PUMP SYSTEM COMPRISED OF:

        CWP01

        CENTRIFUGAL PUMP

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            820A
        Serial #:                           TI57490

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Model #:                            JMM3314T
        Spec #:                             37F196X48


        CWP02

        CENTRIFUGAL PUMP

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            C825AM
        Serial #:                           171953





                                       19
<PAGE>

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Model #:                            JMM3314T
        Spec #:                             37F196X48

8       TRANSFER PUMP TO OZONATION SYSTEM COMPRISED OF:

        CENTRIFUGAL PUMP

        Brand Name:                         AMPCO
        Model #:                            3 x 2 1/2 ZC2
        Serial #:                           CC16867-1-1

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Model #:                            NA
        Spec #:                             07H167W06

9       IRRIGATION TRANSFER PUMP SYSTEM COMPRISED OF:

        IRP01

        CENTRIFUGAL PUMP

        Brand Name:                         PAC_SEAL
        Model #:                            4P940
        Motor Reference #:                  G40444/F96Z120R169F

        THREE PHASE INDUCTION MOTOR

        Brand Name:                         DAYTON
        Model #:                            9N114
        Motor Reference #:                  G40444/F96Z120R169F

        CWP02

        TRANSFER PUMP TO TANK

        Brand Name:                         PEERLESS PUMP COMPANY
        Model #:                            C825AM
        Serial #:                           171953


        THREE PHASE INDUCTION MOTOR

        Brand Name:                         BALDOR
        Model #:                            JMM3314T
        Spec #:                             37F196X48


10      POTABLE WATER DEGASSIFIER COMPRISED OF:

        Brand Name:                          DELEOCH
        Model #:                             NA
        Serial #:                            NA



                                       20
<PAGE>

        BLOWER MOTOR #1
        SINGLE PHASE INDUCTION MOTOR

        Brand Name:                          BALDOR
        Model #:                             VL313
        Serial #:                            NA

        BLOWER MOTOR #2
        THREE PHASE INDUCTION MOTOR

        Brand Name:                          GE MOTORS & INDUSTRIAL SYSTEMS
        Model #:                             5K49ZN2189
        Serial #:                            NMLI42677

11      SEAWATER WELLS AND SUBMERSIBLE PUMPS COMPRISED OF:

        WP #2

        FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
        SUBMERSIBLE PUMP

        Brand Name:                          JACUZZI
        Model #:                             S6175-2
        Serial #:                            92611702

        THREE PHASE MOTOR

        Brand Name:                          FRANKLIN
        Model #:                             236 6119 020
        Serial #:                            99g19-14-0014

        WP #4

        FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
        SUBMERSIBLE PUMP

        Brand Name:                          GRUNFOS
        Model #:                             300S75-2
        Serial #:                            14B70002

        THREE PHASE MOTOR

        Brand Name:                          FRANKLIN
        Model #:                             236 6119 020
        Serial #:                            NA



        WP #5

        FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
        SUBMERSIBLE PUMP

        Brand Name:                          GRUNFOS
        Model #:                             300S75-2
        Serial #:                            NA





                       21
<PAGE>

        THREE PHASE MOTOR

        Brand Name:                          FRANKLIN
        Model #:                             236 6119 020
        Serial #:                            NA

        WP #6

        FEEDWATER WELL, CASING AND WELL HEAD APPURTENANCES
        SUBMERSIBLE PUMP

        Brand Name:                          GRUNFOS
        Model #:                             300S75-2
        Serial #:                            14B70002

        THREE PHASE MOTOR

        Brand Name:                          FRANKLIN
        Model #:                             236 6119 020
        Serial #:                            NA

12      EMERGENCY DIESEL POWERED GENERATOR COMPRISED OF:

        EMERGENCY GENERATOR ENGINE

        Brand Name:                          KOMATSU LTD
        Model #:                             6491
        Serial #:                            14448

        EMERGENCY GENERATOR

        Brand Name:                          ONAN 60
        Model #:                             60 ODVB-15R/30083B
        Serial #:                            B850750776

        FUEL INJECTION PUMP

        Brand Name:                          DIESEL KIKI
        ASSY  #:                             6207-71-1410
        Serial #:                            450K327320

        MAGNETIC DRIVER

        Brand Name:                          NIKKO ELECT IND CO LTD
        Model #:                             600-815-5560
        Serial #:                            0-47100-3720


13      BOLTED STEEL 816,000 US GALLON POTABLE WATER TANK

        Brand Name:                          Florida Aquastore, Inc.
        Model #:                             NA
        Serial #:                            NA





                                       22
<PAGE>

14      ALL INTERCONNECTING PIPING, CONDUITS AND APPURTENANCES, ABOVE THE GROUND
        WHICH CONNECT ITEMS 1 THROUGH 13 TO EACH OTHER, AND TO THE WATER PIPE,
        AND WHICH DIRECTLY FACILITATE THE OPERATION AND MAINTENANCE OF ITEMS 1
        THROUGH 13.

15      ALL ELECTRICAL EQUIPMENT AND COMPONENTS WHICH CONNECT ITEMS 1 THROUGH 13
        TO EACH OTHER AND TO THE MAIN ELECTRICAL SERVICE IN THE RO BUILDING.


16      ALL CONTROLS AND INSTRUMENTATION ATTACHED TO ITEMS 1 THROUGH 13.

17      ALL TOOLS SPECIFIC TO THE MAINTENANCE OR OPERATION OF THE PLANT.

18      ALL LABORATORY AND TESTING EQUIPMENT USED TO MONITOR WATER PRODUCED BY
        THE PLANT.

19      ALL DRAWINGS, SCHEDULES, OPERATION AND MAINTENANCE MANUALS FOR ITEMS 1
        THROUGH 18.

20      ALL OFFICE EQUIPMENT CURRENTLY LOCATED WITHIN THE RO BUILDING AND USED
        BY THE STAFF OF THE PLANT.

21      ALL SPARE PARTS FOR ITEMS 1 THROUGH 18, STORED MATERIALS SUCH AS
        CHEMICALS AND LUBRICANTS HELD IN STOCK AT THE TIME OF CLOSING.

THE COMMON SEAL of CAYMAN       )      CAYMAN HOTEL & GOLF INC.
HOTEL & GOLF INC. was hereunto  )
affixed by  S. Prasad           )
Director and by                 )
    S. Prasad    Asst/Secretary )
by authority of the Board       )
of Directors in                 )       Per: /s/ Suresh Prasad
                                             -----------------------------------
the presence of:-               )                Director
                                )
                                )
/s/ illegible                   )       Per: /s/ Suresh Prasad
- --------------------------------             -----------------------------------
Notary Public                                    Asst/Secretary


THE COMMON SEAL of              )        CONSOLIDATED WATER CO. LTD.
CONSOLIDATED WATER CO. LTD.     )
was hereunto affixed by
                Jeffrey Parker  )
Director, and by                )        Per: /s/ Jeffrey M. Parker
   Peter Ribbins   Secretary    )             ----------------------------------
                                )                 Director
by authority of the Board of
Directors in the present of:-   )


/s/ illegible                   )         Per: /s/ Peter Ribbins
- --------------------------------               ---------------------------------
Notary Public                                      Director/Secretary





                                       23

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.53
<SEQUENCE>12
<FILENAME>g75127ex10-53.txt
<DESCRIPTION>LEASE
<TEXT>
<PAGE>
                                                                   Exhibit 10.53


                                     BELIZE

                       THE REGISTERED LAND ORDINANCE, 1977
                              CERTIFICATE OF LEASE
                           Chapter 157, Laws of Belize

REGISTERED SECTION                          BLOCK                      PARCEL
SAN PEDRO                                     7                        1870/1
- ------------------                          -----                      ------
Area: 1.186 Acres

LESSOR            Government of Belize
RENT              $1.00 p.a.
TERM              18 years          27/4/93

THIS IS TO CERTIFY THAT BELIZE WATER LTD.

of                     #37 Regent Street, Belize City, Belize District

Is now registered as the proprietor of the leasehold interest above referred to,
subject to the agreements and other matters contained in the registered lease,
to the entries in the register relating to the lease and to such of the
overriding interests set forth in section 31 of the Registered Land Ord. 1977 as
may for the time being subsist and affect the land comprised in the lease.

At the date thereof the following entries appear in the register relating to the
lease:

PART A- PROPERTY SECTION (EASEMENTS, ETC.)

PART B- PROPRIETORSHIP SECTION (INHIBITIONS, CAUTIONS AND RESTRICTIONS)
Not to transfer the land, lease or charge without written consent of Lessor.
Hereinafter subject to the lease conditions attached.

PART C- INCUMBRANCES SECTION (LEASES, CHARGES,ETC.)

GIVEN UNDER MY HAND AND THE SEAL OF THE LAND REGISTRY
THIS 18th DAY OF July, 2001

                                                   /s/ M. Petzold
                                         ---------------------------------------
                                                 REGISTRAR OF LANDS

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>13
<FILENAME>g75127ex21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<PAGE>





                                                                      Exhibit 21


              CONSOLIDATED WATER CO. LTD. AND SUBSIDIARY COMPANIES

                         Subsidiaries of the Registrant


     The following list includes all of the Registrant's wholly-owned
subsidiaries as of December 31, 2001. All subsidiaries of the Registrant
appearing in the following table are included in the consolidated financial
statements of the Registrant.

     Name of Subsidiary                      Jurisdiction of Incorporation
     ------------------                      -----------------------------

     Belize Water Ltd.                       Belize
     Commonwealth Water Limited(1)           Bahamas
     Cayman Water Company Limited(1)         Cayman Islands
     Hurricane Hideway Ltd.(1)               Cayman Islands


(1) Dormant companies, with no operations, assets and liabilities.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>14
<FILENAME>g75127ex23.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<PAGE>




                                                                      Exhibit 23



                       CONSENT OF INDEPENDENT ACCOUNTANTS


     We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (Registration No. 333-10206) of Consolidated Water Co.
Ltd. of our report dated March 13, 2002 relating to the financial statements
which appear in this Form 10-K.


/s/ PricewaterhouseCoopers


PricewaterhouseCoopers
Cayman Islands
March 28, 2002


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
