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<SEC-DOCUMENT>0000950144-03-005943.txt : 20030501
<SEC-HEADER>0000950144-03-005943.hdr.sgml : 20030501
<ACCEPTANCE-DATETIME>20030501153407
ACCESSION NUMBER:		0000950144-03-005943
CONFORMED SUBMISSION TYPE:	F-2
PUBLIC DOCUMENT COUNT:		31
FILED AS OF DATE:		20030501

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CONSOLIDATED WATER CO LTD
		CENTRAL INDEX KEY:			0000928340
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			E6
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		F-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-104902
		FILM NUMBER:		03676807

	BUSINESS ADDRESS:	
		STREET 1:		TRAFALGAR PL
		STREET 2:		WEST BAY RD
		CITY:			GRAND CAYMAN BWI CAY
		STATE:			E9
		ZIP:			00000
		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>F-2
<SEQUENCE>1
<FILENAME>g80228fv2.htm
<DESCRIPTION>CONSOLIDATED WATER CO. LTD
<TEXT>
<HTML>
<HEAD>
<TITLE>Consolidated Water Co. Ltd</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on May&nbsp;1, 2003</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center">
<B>Washington, D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">FORM F-2</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center">
<B>UNDER</B>
</DIV>

<DIV align="center">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Consolidated Water Co. Ltd.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of Registrant as specified in
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Cayman Islands, B.W.I.</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">None</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of incorporation
    or registration)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer Identification No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2"> Trafalgar Place, West Bay Road</FONT></B>

<DIV align="center">
<B><FONT size="2">P.O. Box 1114GT</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Grand Cayman, Cayman Islands, B.W.I.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(345)&nbsp;945-4277</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code, of registrant&#146;s principal
executive offices)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2"> Jeffrey M. Parker, Chairman and Chief
Executive Officer</FONT></B>

<DIV align="center">
<B><FONT size="2">Consolidated Water Co. Ltd.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Trafalgar Place, West Bay Road,</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">P.O. Box 1114GT</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Grand Cayman, Cayman Islands, B.W.I.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(345)&nbsp;945-4277</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number, including area code, of agent for
service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2"> Copies to:</FONT></I></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Leslie J. Croland, P.A.<BR>
    Edwards &#38; Angell, LLP<BR>
    350 East Las Olas Boulevard<BR>
    Fort Lauderdale, Florida 33301-4215<BR>
    (954) 667-6129</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Justin P. Klein, Esq.<BR>
    Ballard Spahr Andrews &#38; Ingersoll, LLP<BR>
    1735 Market Street, 51st Floor<BR>
    Philadelphia, Pennsylvania 19103<BR>
    (215) 864-8606</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public: </FONT></B><FONT size="2">As soon as
reasonably practicable after the effective date of this
Registration
Statement.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the only securities being registered on this
Form are to be offered pursuant to dividend or interest
reinvestment plans, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, check the
following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount to be</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Aggregate</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registered(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Per Share(2)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price(2)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registration Fee</FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary shares, par value CI.$1.00
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">2,032,812
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$14.66
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$29,801,023.92
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$2,410.90
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes 265,150 ordinary shares that the
    underwriters have the option to purchase to cover
    over-allotments, if any.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Estimated solely for the purpose of calculating
    the registration fee pursuant to Rule&nbsp;457(c) under the
    Securities Act of 1933, as amended.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933, or until this
Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to such
Section&nbsp;8(a), may determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed. We have filed a
registration statement with the Securities and Exchange
Commission relating to this offering. We may not sell these
securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, DATED
MAY&nbsp;1, 2003</FONT></B>

<P align="left">
<B><FONT size="2">PROSPECTUS</FONT></B>

<P align="center">
<B><FONT size="5">1,767,662 Ordinary Shares</FONT></B>

<P align="center">
<IMG src="g80228g8022802.gif" alt="(Consolidated Water Co. Ltd. Logo)">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are selling 1,200,000 ordinary shares offered
in this prospectus and the selling shareholder is selling
567,662 ordinary shares. We will not receive any proceeds from
the ordinary shares sold by the selling shareholder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted the underwriters a 30-day option
to purchase up to 265,150 additional ordinary shares on the same
terms and conditions as the ordinary shares purchased in this
offering solely to cover over-allotments of shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ordinary shares are listed for trading on the
Nasdaq Stock Market&#146;s National Market under the symbol
CWCO. On April&nbsp;30, 2003, the last reported sale price for
our ordinary shares was $14.60 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Before investing, you should review the
&#147;Risk Factors&#148; beginning on page 10.</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Initial price to public
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Underwriting discounts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds, before expenses, to Consolidated Water
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds to the selling shareholder
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is accurate
or complete. Any representation to the contrary is a criminal
offense.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Janney Montgomery Scott LLC, on behalf of the
underwriters, expects to deliver the ordinary shares on or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003 in Philadelphia, Pennsylvania.
</FONT>

<P align="left">
<B><FONT size="5">JANNEY MONTGOMERY SCOTT LLC</FONT></B>

<P align="right">
<B><FONT size="5">WELLS FARGO SECURITIES, LLC</FONT></B>

<P align="center">
<FONT size="2">The date of this prospectus
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<FONT size="2">[Company logo and
</FONT>

<DIV align="center">
<FONT size="2">photos of service territories]
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PROSPECTUS SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">PRICE RANGE OF ORDINARY SHARES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">DIVIDEND POLICY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">CAPITALIZATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">DILUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">BANK FINANCING AGREEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SELECTED CONSOLIDATED FINANCIAL INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">UNAUDITED CONDENSED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">BUSINESS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">PRINCIPAL AND SELLING SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">FOREIGN EXCHANGE REGULATIONS AND TAXATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">MEMORANDUM AND ARTICLES OF ASSOCIATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">DESCRIPTION OF SECURITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">UNDERWRITING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#019">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#020">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#021">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#022">INDEX TO FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv1w1.txt">Form of Underwriting Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv2w14.txt">Amend No. 1 to Share Sale Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv2w15.txt">Amend No. 2 to Share Sale Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv5w1.txt">Opinion of Charles Adams Ritchie & Deckworth</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w19.txt">Lease Dated 3/1/03</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w27.txt">Amended and Restated Profit Sharing Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w28.txt">Bank of Butterfield Commitment Letter</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w29.txt">Bank of Butterfield Commitment Letter 4/10/02</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w30.txt">Debenture 5/29/02</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w31.txt">Debenture 4/15/02</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w32.txt">Deed of Indemnity</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w33.txt">Guarantee and Indemnity</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w34.txt">Deed of Indemnity</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w35.txt">Guarantee of Indemnity</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w36.txt">Guarantee of Indemnity</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w38.txt">Irrevocable Undertaking</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w39.txt">Irrevocable Undertaking</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w40.txt">Guarantee from DesalCo (Barbados) Ltd.</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w41.txt">Guarantee from DesalCo Limited</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w42.txt">Equitable Charge of Shares</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w43.txt">Equitable Charge of Shares</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w44.txt">Equitable Charge of Shares</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w45.txt">Equitable Charge of Shares</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w46.txt">Reimbursement Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv10w47.txt">Deed of Substituted Debenture</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv23w1.txt">Consent of KPMG Chartered Accountants</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv23w2.txt">Consent of Deloitte & Touche</A></TD></TR>
<TR><TD colspan="9"><A HREF="g80228exv23w3.txt">Consent of PricewaterhouseCoopers</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prospectus Summary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Forward Looking Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk Factors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Use of Proceeds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Price Range of Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend Policy
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capitalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dilution
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank Financing Agreements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selected Consolidated Financial Information
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unaudited Condensed Pro Forma Consolidated
    Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Management&#146;s Discussion and Analysis of
    Financial Condition and Results of Operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Business
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Management
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Principal and Selling Shareholders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign Exchange Regulations and Taxation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Memorandum and Articles of Association
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description of Securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Underwriting
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal Matters
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Experts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Where You Can Find More Information
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Index To Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
all dealers that affect transactions in these securities,
whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the
dealer&#146;s obligation to deliver a prospectus when acting as
an underwriter and with respect to its unsold allotment or
subscriptions.</FONT></B>

<P align="center">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "PROSPECTUS SUMMARY" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center">
<B><FONT size="2">PROSPECTUS SUMMARY</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary calls your attention to selected
information in this prospectus, but may not contain all the
information that is important to you. Unless otherwise
indicated, all the information contained in this prospectus
assumes that the underwriters will not exercise their
over-allotment option. To understand this offering fully and for
a more complete description of this offering, you should read
this entire document carefully, including particularly the
&#147;Risk Factors&#148; section, as well as the documents we
have referred you to in the section called &#147;Where You Can
Find More Information.&#148; Unless otherwise indicated, all
dollar amounts listed in this prospectus are in United States
Dollars and any references to &#147;$&#148; or &#147;U.S.$&#148;
are to United States Dollars. References in this prospectus to
&#147;CI$,&#148; &#147;BZE$,&#148; or &#147;BAH$&#148; or
&#147;BDS$&#148; are to Cayman Islands Dollars, Belizean
Dollars, Bahamian Dollars or Barbados Dollars,
respectively.</FONT></I>

<P align="center">
<B><FONT size="2">Our Business</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our company, Consolidated Water Co. Ltd., uses
reverse osmosis technology to produce freshwater from seawater.
We process and supply water to our customers in the Cayman
Islands, Belize, Barbados, the British Virgin Islands and the
Commonwealth of the Bahamas. We sell water to a variety of
customers, including public utilities, commercial and tourist
properties, residential properties and government facilities.
For the year ended December&nbsp;31, 2002, we sold
640&nbsp;million U.S. gallons of water and reported total
revenue of $12.2&nbsp;million and net income of
$2.6&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we acquired interests
in five companies which operate a total of seven plant
facilities. These acquisitions increase our daily water
production capacity in the Cayman Islands and the Commonwealth
of the Bahamas and expand our geographic presence to include
Barbados and the British Virgin Islands. As a result of these
acquisitions, our daily capacity has more than tripled from
approximately 2.9 to 10.9&nbsp;million U.S. gallons per day.
With one of these acquisitions, we obtained the exclusive right
through 2009 to distribute the DWEER<SUP>TM</SUP> Energy
Recovery System for use in reverse osmosis seawater desalination
plants in the Caribbean basin. We believe the DWEER<SUP>TM</SUP>
System gives us a distinct competitive advantage when bidding
for new plant construction projects. (See &#147;Recent
Acquisitions&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming our acquisitions occurred on
January&nbsp;1, 2002, pro forma revenues would have been
$21.7&nbsp;million and pro forma net income would have been
$4.4&nbsp;million for the year ended December&nbsp;31, 2002,
representing increases over reported results of approximately
77.7% and 71.3%, respectively. We are presenting this pro forma
information to illustrate the impact that these acquisitions
would have had on our operations if they had occurred on
January&nbsp;1, 2002. The notes to our unaudited condensed pro
forma consolidated financial statements describe the adjustments
made to our audited consolidated financial statements for the
year ended December&nbsp;31, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the countries in which
we currently operate, the percent of our revenues, the number of
water plants and the water capacity for the year ended
December&nbsp;31, 2002. The first column contains the percentage
of our actual revenues, actual number of water plants and the
water capacity attributable to each country for 2002. The second
column indicates what the percentage of our revenues,
</FONT>

<P align="center"><FONT size="2">1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">including our share of net profits in equity
investments, the number of water plants and the water capacity
would have been in 2002 had we acquired these interests on
January&nbsp;1, 2002.
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the year Ended</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the year Ended</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2002</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Revenue</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Plants</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Capacity**</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Revenue</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Plants</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Capacity**</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(Assuming the recent acquisitions had</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">occurred as of January&nbsp;1, 2002)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cayman Islands
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Belize
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barbados
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">British Virgin Islands*
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bahamas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The British Virgin Islands company is not
    consolidated and the revenues reflected represent fees received.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Millions of U.S. gallons of water per day
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Our Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our strategy is to provide water services in
areas where the supply of potable water is scarce. We have
focused on the Caribbean basin and adjacent areas as our
principal market because these areas have: little or no
naturally occurring fresh water; limited local regulations and
taxes allowing us to benefit from higher returns than more
highly regulated countries; and a large proportion of tourist
properties, which historically have generated higher volume
sales than residential properties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To execute this strategy, we plan to grow our
business by:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">continuing to develop our production and
    distribution infrastructure and provide high quality potable
    water to our licensed area in the Cayman Islands;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">expanding our existing operations in the Cayman
    Islands, Belize, Barbados, the British Virgin Islands and the
    Commonwealth of the Bahamas;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extending our operations to other markets outside
    of our current areas of operation where there is a need for
    potable water; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">broadening our existing and future operations
    into complementary services.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Our Address and Telephone Number</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our company, formerly known as Cayman Water
Company Limited, was incorporated in August 1973 under the laws
of the Cayman Islands. Our registered office is located at
Trafalgar Place, West Bay Road, Grand Cayman. Our mailing
address is P.O.&nbsp;Box&nbsp;1114GT, Grand Cayman, Cayman
Islands, British West Indies and our telephone number is
(345)&nbsp;945-4277.
</FONT>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<FONT size="2">[Map of plant locations]
</FONT>

<P align="center"><FONT size="2">3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">The Offering</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="39%"></TD>
    <TD width="1%"></TD>
    <TD width="60%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ordinary shares offered
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">1,200,000
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ordinary shares offered by the selling shareholder
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">567,662
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ordinary shares outstanding before this offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">4,275,568
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ordinary shares to be outstanding after this
    offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">5,475,568
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Nasdaq National Market symbol
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">CWCO
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ordinary shares 52-week price range
    (through&nbsp;April&nbsp;30,&nbsp;2003)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$11.24 to $15.47
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Current annualized dividend rate
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$0.42 per share
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Use of Proceeds
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We plan to use a portion of the net proceeds of
    this offering, estimated to be
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    to repay some of the debt used to finance our recent
    acquisitions and the balance of the net proceeds will be used
    for general corporate purposes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Over-allotment Option
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We have granted the underwriters of this offering
    an option to purchase from us up to an additional 265,150
    ordinary shares.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Summary Consolidated Financial
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is a summary of our audited
consolidated financial data for each of the years in the
three-year period ended December&nbsp;31, 2002. The information
is expressed in U.S. dollars. This summary financial data is
derived from and should be read in conjunction with our
consolidated financial statements and notes thereto and the
section of this prospectus entitled &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations&#148; contained elsewhere in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We voluntarily adopted accounting principles
generally accepted in the United States of America, effective
January&nbsp;1, 2000. Previously, financial statements were
prepared in accordance with International Financial Reporting
Standards.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">except for per share data)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Statement of Income
    Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,577</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,918</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">449</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">As of December&nbsp;31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,457</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Summary Unaudited Pro Forma Financial
Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth unaudited condensed pro
forma consolidated financial data for our company for the year
ended December&nbsp;31, 2002 giving effect to our recent
acquisitions of DesalCo Limited, DesalCo (Barbados) Ltd., Ocean
Conversion (Cayman) Limited, Ocean Conversion (BVI)&nbsp;Ltd.
and Waterfields Company Limited which are summarized in the
following section entitled &#147;Recent Acquisitions,&#148; as
if such acquisitions had been completed on January&nbsp;1, 2002
for purposes of consolidated statement of income data and as if
such acquisitions had been completed on December&nbsp;31, 2002
for purposes of consolidated balance sheet data.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited condensed pro forma consolidated
financial statements have been prepared using the purchase
method of accounting for acquisitions. The aggregate purchase
price for the acquisitions, including transaction costs, was
approximately $36.4&nbsp;million and consisted of
$34.1&nbsp;million in cash and 185,714 of our ordinary shares
valued at approximately $2.3&nbsp;million. Our acquired
interests in Ocean Conversion (BVI)&nbsp;have been accounted for
using the equity method of accounting. Under the equity method
of accounting, the investment in Ocean Conversion (BVI) is
recorded at cost and adjusted for our share of earnings or
losses, less dividends.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following information has been derived from
our audited consolidated financial statements, the audited
combined financial statements of Ocean Conversion (Cayman),
DesalCo, DesalCo (Barbados) and Ocean Conversion (BVI)&nbsp;and
the audited financial statements of Waterfields included in this
prospectus beginning at page&nbsp;F-1. The pro forma adjustments
relating to the acquisition of these entities are based upon
available information and assumptions that are considered
reasonable under the circumstances. Final adjustments could
differ from these adjustments.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">December 31, 2002</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(in thousands,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">except for per</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">share data)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Statement of Income
    Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,660</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,014</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,284</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income (expenses)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">As of</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">December 31, 2002</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,626</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,162</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,934</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">6
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Recent Acquisitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we completed several
acquisitions enabling us to expand our operations to the British
Virgin Islands and Barbados, while increasing our presence in
the Cayman Islands and the Bahamas. Specifically, we acquired
equity and other interests in four companies providing potable
water services in Nassau, the Bahamas; Tortola, British Virgin
Islands; St. James, Barbados and the Cayman Islands and a fifth
company providing management, engineering and construction
services to these companies for a total purchase price of
$25.5&nbsp;million in cash and 185,714 of our ordinary shares.
We also have an agreement to acquire an additional 13.5% of the
shares of Waterfields, the acquired company providing water
services in the Bahamas, for approximately $1.4 million and have
also engaged in a tender offer conducted outside of the United
States for an additional 64.7% of the remaining shares of
Waterfields for approximately $6.7&nbsp;million, bringing our
holdings in Waterfields to 90.9%. The Waterfields transaction is
subject to governmental approval which we expect to receive by
May&nbsp;31, 2003. In addition to the Waterfields acquisition,
our recently-acquired wholly-owned subsidiary, DesalCo Limited,
has agreed to sell 100% of the non-voting stock of Ocean
Conversion (BVI)&nbsp;Ltd., to Sage Water Holdings
(BVI)&nbsp;Ltd. for $2.1&nbsp;million cash. We expect to close
this transaction by May&nbsp;31, 2003, unless the parties agree
to extend the closing date. Upon completion of all of these
transactions, we will have paid an aggregate amount of
approximately $34.1&nbsp;million in cash (including transaction
costs) and issued 185,714 of our ordinary shares, which we are
required to register with the Securities and Exchange Commission
for resale.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following chart shows our ownership interest
in these companies following completion of these acquisitions:
</FONT>

<P align="left">
<IMG src="g80228g8022801.gif" alt="(FLOW CHART)">

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">DesalCo Limited&nbsp;&#151; Cayman Islands
    <BR>
     DesalCo (Barbados) Ltd.&nbsp;&#151; Barbados</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we acquired all of the
issued and outstanding stock of DesalCo Limited, a Cayman
Islands company, for approximately $11.4&nbsp;million. DesalCo
provides management and engineering services to Ocean Conversion
(Cayman) Limited, Ocean Conversion (BVI)&nbsp;Ltd. and
engineering services to Waterfields Company Limited. These
services include all management support, including accounting,
financial reporting, audit coordination, personnel management,
plant management and maintenance. In addition to these
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">management and engineering services, DesalCo owns
all of the stock of DesalCo (Barbados) Ltd., a Barbados company,
which operates a desalination plant for and sells desalinated
water to Sandy Lane Properties Ltd. in St. James, Barbados. The
operating agreement between Sandy Lane Properties Ltd. and
DesalCo was assigned to DesalCo (Barbados), although DesalCo
provides some management, engineering, purchasing and other
services for a fixed monthly fee and receives a share of the
revenues generated by the desalination plant.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our wholly-owned subsidiary, DesalCo, is
currently the exclusive distributor in the Caribbean basin for
the DWEER<SUP>TM</SUP> System produced by DWEER Technology Ltd.
for use in reverse osmosis seawater desalination plants through
2009. Based upon its operating specifications, the
DWEER<SUP>TM</SUP> Energy Recovery System for reverse osmosis
seawater desalination plants is one of the most energy efficient
systems of its kind. The DWEER<SUP>TM</SUP> distributorship
agreement may be terminated by DWEER Technology Ltd. if we fail
to diligently promote the sale and use of the DWEER<SUP>TM</SUP>
System or if we challenge the validity of any DWEER<SUP>TM</SUP>
intellectual property.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Ocean Conversion (Cayman)
    Limited&nbsp;&#151; Cayman Islands <BR>
     Ocean Conversion (BVI)&nbsp;Ltd.&nbsp;&#151; British Virgin
    Islands</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we purchased all of the
voting stock and profit sharing rights relating to Ocean
Conversion (Cayman) Limited, a Cayman Islands company, and
through DesalCo, 50% of the issued and outstanding voting stock
and certain profit sharing rights relating to Ocean Conversion
(BVI)&nbsp;Ltd., a British Virgin Islands company, for
approximately $14.1&nbsp;million and 185,714 of our ordinary
shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (Cayman) sells desalinated water
under various licenses and agreements to the Water
Authority&nbsp;&#150; Cayman, which in turn distributes the
water to customers outside our exclusive licensed area via
pipeline. All of the non-voting stock of Ocean Conversion
(Cayman) is owned by DesalCo and was acquired by us in the
DesalCo transaction as previously discussed. As a result of
these two transactions, we own 100% of the voting and non-voting
stock of Ocean Conversion (Cayman).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (BVI)&nbsp;sells desalinated
seawater on the island of Tortola to the Department of Water and
Sewerage of the Ministry of Communications and Works of the
British Virgin Islands government, which in turn distributes the
water to customers via its own pipeline. All of the non-voting
stock of Ocean Conversion (BVI)&nbsp;is owned by DesalCo and was
acquired by us in the DesalCo transaction as previously
discussed. As a condition to completion of the Ocean Conversion
(BVI)&nbsp;acquisition, we surrendered 18.2% of our profit
sharing rights to Ocean Conversion (BVI)&nbsp;in return for the
issuance to DesalCo of an additional 45,000 non-voting shares of
Ocean Conversion (BVI). DesalCo immediately agreed to sell these
45,000 shares of non-voting stock and all of its previously
acquired shares of non-voting stock to the remaining
shareholder, Sage Water Holdings (BVI) Ltd., for approximately
$2.1&nbsp;million in cash. We expect to complete the sale of
these shares to Sage Water Holdings by May&nbsp;31, 2003, unless
the parties agree to extend the closing date. When we complete
the sale of these shares to Sage Water Holdings, we will share
equal control of the voting stock and the profit sharing rights
of Ocean Conversion (BVI)&nbsp;with Sage Water Holdings and Sage
Water Holdings will own all of the shares of non-voting stock of
Ocean Conversion (BVI). As a result of these transactions, we
will hold 43.5% of the economic interests in Ocean Conversion
(BVI).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Waterfields Company Limited&nbsp;&#151; The
    Bahamas</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our acquisition of DesalCo, we
acquired control of 12.7% of the stock of Waterfields Company
Limited currently owned by DesalCo, as well as the engineering
service agreement between Waterfields and DesalCo. Waterfields
owns and operates a reverse osmosis seawater desalination plant
and sells desalinated seawater on a take or pay basis to the
Water &#38; Sewerage Corporation of the Bahamas which in turn
distributes the water to customers via its own pipeline. We have
an agreement with Bacardi &#38; Co. Ltd. pursuant to which we
will acquire approximately 13.5% more of the stock of
Waterfields and we will be assigned the management agreement
between Waterfields and Bacardi for an aggregate price of
$1.4&nbsp;million. In addition to the transaction with Bacardi,
we also have an agreement to acquire an additional 64.7% of the
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">shares of Waterfields for approximately
$6.7&nbsp;million through a tender offer conducted outside the
United States to the remaining shareholders of Waterfields. Each
of these transactions is subject to government approval, which
we expect to receive by May&nbsp;31, 2003. As a result of the
tender offer and the transactions with Bacardi and DesalCo, we
will own 90.9% of the issued and outstanding shares of
Waterfields. While we will not own all of the shares of
Waterfields, we will control the right to appoint all of the
directors of its board of directors.
</FONT>
</DIV>

<P align="left">


<!-- link1 "FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center">
<B><FONT size="2">FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">We discuss in this prospectus and in documents
which we have incorporated into this prospectus by reference
matters which are not historical facts, but which are
&#147;forward-looking statements.&#148; 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 us and
our industry in general.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The forward-looking statements in this
prospectus 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 prospectus are no longer accurate whether as a result of
new information, what actually happens in the future or for any
other reason.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Important matters that may affect what will
actually happen include, but are not limited to, tourism in the
areas we service, our ability to manage, integrate and realize
the benefits from our recent acquisitions, scheduled new
construction within our licensed areas, the U.S. and Caribbean
economies, regulatory matters, weather conditions in the
Caribbean, availability of capital for expansion of our
operations, and other factors described in the &#147;Risk
Factors&#148; section below, as well as elsewhere in this
prospectus.</FONT></I>

<P align="center"><FONT size="2">9
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">We have described for you below some of the
risks involved in investing in the ordinary shares which we
offer under this prospectus. A word of caution: this is not a
complete list of every risk. You should carefully consider each
of the following risk factors and all of the information both in
this prospectus and in the other documents we refer you to in
the section called &#147;Where You Can Find More
Information.&#148;</FONT></I>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Our exclusive license for our service area in
    the Cayman Islands may not be renewed in the future and requires
    that we obtain prior approval for any rate increase for reasons
    other than inflation.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the Cayman Islands, 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. Our existing license expires on July&nbsp;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 we will be able
to renew our license on favorable terms. We would retain
ownership of our production infrastructure and substantially all
of our distribution infrastructure if our license were not
renewed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our existing 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. Failure to obtain adequate rate increases could
have an adverse effect on our results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We rely on water supply agreements with our
    customers in Belize, the Bahamas, the British Virgin Islands and
    Barbados which, upon their expiration, may not be renewed or may
    be renegotiated on less favorable terms to us.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We presently operate as a bulk water supplier
under water sales agreements in Belize with our customer, the
Belize Water Services Limited, in the Bahamas with our
customers, the Water &#38; Sewerage Corporation and South Bimini
International Ltd., in Barbados with our customer, Sandy Lane
Properties Ltd. and in the British Virgin Islands with our
customer, the Department of Water &#38; Sewerage of the Ministry
of Communications &#38; Works of the British Virgin Islands
government. Upon expiration, these agreements may not be renewed
or may be renewed on less favorable terms.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We are now subject to additional water supply
    licenses which may not be renewed or may be renegotiated on
    terms unsatisfactory to us.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of our recent acquisition of Ocean
Conversion (Cayman), it now operates as our subsidiary. Ocean
Conversion (Cayman) sells water to the Water
Authority&nbsp;&#150; Cayman under three water supply licenses
expiring in March 2006, November 2008 and October 2009,
respectively. While we intend to renegotiate these licenses
prior to expiration, we cannot provide any assurances that the
government will renew these licenses or that we will be able to
negotiate new licenses on satisfactory terms. Failure to
renegotiate the licenses on satisfactory terms could have an
adverse effect on our results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Termination of our exclusive distributorship
    agreement with DWEER Technology Ltd. would eliminate the
    competitive advantage that we presently have over our
    competition in obtaining new plants in the Caribbean
    basin.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our wholly-owned subsidiary, DesalCo, is
currently the exclusive distributor in the Caribbean basin for
the DWEER<SUP>TM</SUP> System produced by DWEER Technology Ltd.
for use in reverse osmosis seawater desalination plants through
2009. As a result, none of our competitors are able to offer
this technology when bidding for new reverse osmosis seawater
desalination plants in the Caribbean basin. As the
DWEER<SUP>TM</SUP> System is one of the most energy efficient
recovery systems of its kind, the distributorship agreement with
DWEER Technology Ltd. gives us a unique competitive advantage.
If the distributorship agreement were terminated or not renewed
on equally favorable terms, we would lose this competitive
advantage, and it may be more difficult for us to obtain new
contracts for plants in the Caribbean basin.
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">The British Virgin Islands government has
    taken the position that our water supply agreement is operating
    on a month-to month basis.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term of Ocean Conversion (BVI)&#146;s
existing water supply agreement in the British Virgin Islands is
uncertain. Ocean Conversion (BVI) believes that the existing
water supply agreement with the British Virgin Islands Water and
Sewerage Department was automatically extended to May 2006 when
the British Virgin Islands government did not make a required
buyout payment in May 1999. The British Virgin Islands
government has taken the position that the water supply
agreement continues on a month-to-month basis. Thus, it is
possible that the government could attempt to terminate the
agreement at any time. While Ocean Conversion (BVI) is currently
attempting to negotiate a further extension of this agreement,
there is no guarantee that an extension will be granted, or that
if granted, such extension will be on terms favorable to Ocean
Conversion (BVI). Failure to negotiate this agreement on
favorable terms to us could have an adverse effect on our result
of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We may not be able to successfully integrate
    the new assets that we acquired in the recent
    acquisitions.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Increasing our size in a relatively short period
of time has placed a significant strain on our management
resources. Management may be required to spend additional time
and money on integration that would otherwise be spent
developing our business and services and may not be successful
in integrating the acquired assets into our current operations.
For example, integrating our new assets requires us to expand
our management information systems and control our operating
expenses. As a result, we cannot assure you that the
acquisitions will provide us with the expected benefits. In
addition, we cannot assure you that these acquisitions will not
have a negative impact on our business and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">The costs of integrating our new assets may
    affect our ability to pay dividends.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have historically sought to pay cash dividends
to our shareholders out of our net income on a quarterly basis
if funds are available. The costs associated with integrating
our new assets, however, may reduce our net income. If our net
income is reduced, we will have fewer funds available to pay
dividends. In addition, our bank loan agreement with Scotiabank
(Cayman Islands) Ltd. requires that we pay dividends from
current cash flow.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Our business is affected by tourism, weather
    conditions, the economies of the locations where we provide
    service, the U.S. and European economies and the international
    political climate.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Tourist arrivals and weather conditions within
our operating areas affect the demand for our water to a greater
extent in the Cayman Islands and in Belize than in the Bahamas,
the British Virgin Islands and Barbados. In the Cayman Islands
and Belize, the highest demand is normally in the first two
quarters of each calendar year. The lowest demand for water
occurs in the third quarter of each calendar year. A significant
percentage of tourists visiting the Cayman Islands and Belize
come from the U.S. or certain European countries. In addition,
development activity in our service areas in the Cayman Islands
is significantly impacted by the U.S. economy. Accordingly, a
significant downturn in tourist arrivals to the Cayman Islands
or in the U.S. or European economies for any reason would be
detrimental to our revenues and operating results. After the
events of September&nbsp;11, 2001, tourism decreased in the
Cayman Islands and has not yet returned to historical levels.
Additional terrorist activities in the United States, Europe or
in the areas served by us or extended hostilities in the Persian
Gulf would likely have a material adverse effect on our business
and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We may have difficulty accomplishing our
    growth strategy within and outside of our current operating
    areas.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Even though we have an exclusive license for our
present operating area in the Cayman Islands as well as supply
agreements in the Cayman Islands, the Bahamas, the British
Virgin Islands, Barbados and Belize, our
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">ability to expand our operating areas is often
subject to the approval of the respective governments in each
location.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further, part of our long-term growth strategy is
to expand our water supply and distribution operations to other
locations outside the areas in which we normally operate. Our
expansion into new locations depends on our ability to obtain
necessary permits, licenses and approvals to operate in new
territories in a timely and cost efficient manner.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our expansion to territories outside of our
current operating areas includes significant risks, including
the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">regulatory risks, including government relations,
    local regulations and currency controls;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">risks related to operating in foreign countries,
    including political instability, reliance on local economies,
    environmental or geographical problems, immigration restrictions
    and shortages of materials and skilled labor;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">risks related to development of new operations,
    including assessing the demand for water, engineering
    difficulties and inability to begin operations as scheduled; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">risks relating to greater competition in these
    new territories, including the ability of our competitors to
    gain or retain market share by reducing prices.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Even if our expansion plans are successful, we
may have difficulty managing our growth. We cannot assure you
that any new operations outside of our current operating areas
will attain or maintain profitability or that the results from
any new operations will not negatively affect our overall
profitability.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We do not own a majority interest in Ocean
    Conversion (BVI).</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recently acquired 50% of the voting shares of
Ocean Conversion (BVI) which allows us to appoint three of the
six&nbsp;directors of that company. Sage Water Holdings (BVI)
Ltd., which owns the remaining 50% of the voting shares, is
entitled to appoint the remaining three directors. If there is a
tie vote of the directors on any matter, the president of the
Caribbean Water and Wastewater Association is entitled to
appoint a temporary director to break the tie. As a result, we
will have to share the management of Ocean Conversion (BVI) with
Sage Water Holdings. Although we will provide management and
engineering services to Ocean Conversion (BVI), we will not
fully control the operations of the company.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Our operations in the Caribbean could be
    harmed by hurricanes.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A significant hurricane could cause major damage
to our equipment and properties and the properties of our
customers, including the large tourist properties in these
areas. This would result in decreased revenues and profits from
water sales until our damaged equipment and properties are
repaired and our customers and the tourism industry returned to
the status quo before the hurricane. We do not insure our
underground water distribution system on the Cayman Islands, nor
the Governor&#146;s Harbour reservoirs which are constructed
from earthen berms.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Contamination to our water may cause
    disruption in our services and adversely affect our
    revenues.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our processed water may become contaminated by
naturally-occurring or man-made compounds and events. In the
event that a portion of our processed water is contaminated, we
may have to interrupt the supply of that water until we are able
to install treatment equipment or substitute the flow of water
from an uncontaminated water production source. In addition, we
may incur significant costs in order to treat a contaminated
source of plant feed water through expansion of our current
treatment facilities, or development of new treatment methods.
Our inability to substitute processed water from an
uncontaminated water source, or to adequately treat the
contaminated plant feed water in a cost-effective manner may
have an adverse effect on our revenues.
</FONT>

<P align="center"><FONT size="2">12
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, after the events of
September&nbsp;11, 2001, we have taken steps to heighten
employee awareness of threats to our water supply. We have and
will continue to bear costs for security precautions to protect
our facilities, operations and supplies. We are not aware of any
specific threats to our facilities, operations or supplies. It
is possible, however, that we would not be in a position to
control the outcome or the costs of such events should they
occur, which could have a material adverse effect on the results
of our operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We could be negatively affected by potential
    government actions and regulations.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any government that regulates our operations may
enact legislation or adopt new regulations, including but not
limited to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restricting foreign ownership of us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">providing for the expropriation of our assets by
    the government;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">providing for changing water quality standards;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring unilateral changes to or renegotiation
    of our exclusive licenses; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">causing currency exchange fluctuations or
    devaluations or changes in tax laws.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">We rely heavily on the efforts of several key
    employees.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends upon the abilities of our
executive officers. In particular, the loss of the services of
Jeffrey Parker, our Chairman and Chief Executive Officer, or
Fredrick McTaggart, our President, Chief Operating Officer and
Chief Financial Officer, could be detrimental to our operations
and our continued success. Although Messrs.&nbsp;Parker and
McTaggart entered into three-year employment agreements
commencing in 1998 and 2000, respectively, and which
automatically extend every year for an additional one-year term,
we cannot guarantee that Messrs.&nbsp;Parker or McTaggart will
continue to work for us during the terms of their agreements.
Also, none of our employees has entered into a non-compete
agreement with us.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Provisions in our articles of association and
    an option deed adopted by our board of directors may discourage
    a change in control and may make it more difficult for you to
    sell your ordinary shares.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our articles of association include provisions
which may discourage or prevent a change in control. For
instance, our board of directors consists of three groups and
each group serves a staggered term of three years. Also, our
board of directors may refuse to register any transfer of shares
on our books for any reason.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have also adopted an option deed, which is
similar to a poison pill. The option deed may discourage a
change in control by causing substantial dilution to a person or
group who attempts to acquire us on terms not approved by the
board of directors. The option deed will expire on July&nbsp;31,
2007.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of these provisions, you may not have
an opportunity to sell your 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.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">There may be a risk of variation in currency
    exchange rates.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we report our results in United States
dollars, the majority of our revenue is earned in Cayman Islands
dollars and Belizean dollars. Prior to our acquisition of
control of Waterfields, our Bahamas revenue was earned in United
States dollars. As a result of our acquisition of control of
Waterfields, we now earn a majority of our Bahamas revenue in
Bahamian dollars. In addition, as a result of our recent
acquisitions, we also earn revenue in the British Virgin Islands
whose currency is in United States dollars and Barbados, whose
currency is in Barbados dollars. All of the currencies in our
operating areas have been fixed to the United States dollar for
over 20&nbsp;years. As a result, we do not intend to hedge
against any exchange rate risk associated with our reporting in
United States dollars. If any of these fixed exchange rates
becomes a floating exchange rate, however, our results of
operations could be adversely affected.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Service of process and enforcement of legal
    proceedings commenced against us in the United States may be
    difficult to obtain.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Service of process on us and our directors and
officers, fourteen out of seventeen of whom reside outside the
United States, may be difficult to obtain within the United
States. Also, since substantially all of our assets are
currently located outside the United States, any judgment
obtained in the United States against us may not be collectible.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There is no reciprocal statutory 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&#146;s claim. A prevailing party could rely on the
summary judgment procedures available in the Cayman Islands,
subject to available defenses in the Cayman Islands courts,
including, but not limited to, the lack of competent
jurisdiction in the United States courts, lack of adequate
service of process in the United States proceeding, and the
possibility that enforcement or recognition of the United States
judgment would be contrary to the public policy of the Cayman
Islands.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depending on the nature of damages awarded, 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. For example, a
United States judgment awarding remedies unobtainable in any
legal action in the courts of the Cayman Islands (for example,
treble damages, which would probably be regarded as penalties),
would not likely be enforceable under any circumstances.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">Shares eligible for future sale under
    Rule&nbsp;144 of the Securities Act may adversely affect the
    market price of our ordinary shares.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Before this offering, there were 4,275,568
ordinary shares issued and outstanding. With the exception of
955,041 ordinary shares held by our officers, directors,
ten&nbsp;percent (10%) shareholders and other affiliates (as
such term is defined under the Securities Act of 1933),
3,104,813 of the issued and outstanding ordinary shares may be
immediately sold without registration under the Securities Act
of 1933, as amended. These shares may be sold under
Rule&nbsp;144 or under the exemption provided by
Section&nbsp;4(1) of the Securities Act for transactions by any
person other than an issuer, underwriter or dealer. Of the
955,041 ordinary shares held by our officers, directors, ten
percent (10%) shareholders and other affiliates, 889,432 shares
are eligible for resale in compliance with Rule&nbsp;144,
including the 567,662 ordinary shares held by the selling
shareholder. Any substantial sale of the ordinary shares under
Rule&nbsp;144, or otherwise, may have an adverse effect on the
market price of the ordinary shares. In connection with our
recent acquisitions, we are obligated to file a registration
statement with the Securities and Exchange Commission for the
185,714 shares issued to one of the sellers by June&nbsp;30,
2003. The registration statement will also cover 30,000 shares
acquired by one of our consultants.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">You will incur immediate and substantial
    dilution of the book value of your investment in our ordinary
    shares.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offering price of our ordinary shares is
substantially more than the book value per ordinary share. As a
result, purchases of ordinary shares pursuant to this offering
will experience immediate and substantial dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
ordinary share in book value from the assumed offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
ordinary share.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<P align="left">


<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming an offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, we estimate that the net proceeds to us from the sale of
1,200,000 ordinary shares offered by us in this prospectus,
after deducting underwriters&#146; discounts and commissions and
estimated offering expenses, will be approximately
$&nbsp;(approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the underwriters exercise the over-allotment option in full). We
will not receive any proceeds from the sale of the ordinary
shares by the selling shareholder. We intend to use the net
proceeds from this offering to repay the balance of
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on
the six-month term loan under our Scotiabank (Cayman Islands)
Ltd. facility used to finance the recent acquisitions described
in &#147;Recent Acquisitions&#148; and the balance of the net
proceeds will be used for general corporate purposes. The
six-month loan currently bears interest at a variable rate and
the balance is due on August&nbsp;6, 2003. The interest rate to
date has ranged from 4.06% to 4.09%.
</FONT>

<P align="left">


<!-- link1 "PRICE RANGE OF ORDINARY SHARES" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="center">
<B><FONT size="2">PRICE RANGE OF ORDINARY SHARES</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ordinary shares are listed on the Nasdaq
National Market and trade under the symbol &#147;CWCO.&#148; On
March&nbsp;31, 2003, we had 577 holders of record of the
ordinary shares. Listed below for the periods indicated are the
high and low closing bid prices for the ordinary shares on the
Nasdaq National Market for the periods indicated. 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.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">High</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Five Most Recent Fiscal Years</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 1998
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Year ended December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.875</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fourth Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="9"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">First Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Second Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Third Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fourth Quarter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Most Recent Six Months</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">October 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">November 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.309</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">January 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.550</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">February 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.760</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.180</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.050</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Through April&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">15
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "DIVIDEND POLICY" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="center">
<B><FONT size="2">DIVIDEND POLICY</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have paid cash dividends on our ordinary
shares since 1985. Our board of directors&#146; policy has been
to pay cash dividends out of accumulated profits on a quarterly
basis if funds are available. Our board of directors established
a policy, although not a binding obligation, that, subject to
their annual review, we will maintain a dividend pay-out ratio
in the range of 50% to 60% of net income. Our payment of any
future cash dividends, however, will still depend upon our
earnings, financial condition, capital demand and other factors,
including the condition in our loan agreement with Scotiabank,
that dividends be paid from current cash flow. Our board of
directors declares and approves all interim dividends. It is a
requirement of our Articles of Association for the board of
directors to seek shareholder approval of the final dividend, if
any, at the annual meeting of our shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We pay dividends directly to those shareholders
holding ordinary shares in their respective names. With respect
to shareholders holding ordinary shares in street name, we
distribute the dividend payment to the Depository Trust Company
as paying agent for those shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2001, we increased our per share
dividend from $0.10 to $0.105 per quarter and paid dividends in
this amount during the year ended December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "CAPITALIZATION" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="center">
<B><FONT size="2">CAPITALIZATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows our capitalization as
of February&nbsp;28, 2003:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on an actual basis;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on a pro forma basis giving effect to the
    completion of the remaining transactions described in
    &#147;Recent Acquisitions&#148;; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on a pro forma as adjusted basis to reflect the
    sale by us of 1,200,000 ordinary shares in this offering at an
    assumed price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share after deducting underwriting discounts and commissions and
    estimated offering expenses.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This information should be read in conjunction
with the audited consolidated financial statements and related
notes thereto appearing elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">February 28, 2003</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">As Adjusted</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank indebtedness
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other long-term liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <FONT size="2">Class&nbsp;A and B Ordinary Shares<BR>
    par value $1.20 per share<BR>
    9,900,000 authorized;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">4,179,133 issued and outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <FONT size="2">Redeemable Preference Shares<BR>
    par value $1.20 per share<BR>
    100,000 authorized;<BR>
    19,740 issued and outstanding
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total Capitalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,313</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "DILUTION" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="center">
<B><FONT size="2">DILUTION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our net book value at December&nbsp;31, 2002 was
$20,701,383, or $5.18 per ordinary share. Net book value per
share represents the amount of total assets less total
liabilities, divided by the number of our ordinary shares
outstanding on December&nbsp;31, 2002. After giving effect to
(1)&nbsp;the sale of our ordinary shares offered by us at an
assumed public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share less estimated offering expenses, including underwriting
discounts and commissions and (2)&nbsp;the recent acquisitions,
our pro forma net book value as of December&nbsp;31, 2002 would
have been approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. This represents an immediate increase in pro forma net
book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to existing shareholders and an immediate dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to new investors purchasing our ordinary shares in this
offering. Therefore, investors purchasing ordinary shares in the
offering would have paid
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
an ordinary share having a pro forma net book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share after the offering. The following table illustrates this
dilution but does not give effect to the ordinary shares subject
to an option granted to the underwriters to purchase additional
shares in the offering:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assumed public offering price per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net book value per share before this offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase attributable to this offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma book value after this offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Book value dilution per share to new investors in
    this offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables show a comparison between
the effective cash cost of shares and options acquired by our
directors or senior management during the last five years and
the price of the ordinary shares in this offering:
</FONT>

<P align="center">
<B><FONT size="2">Share Options</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Effective Cash</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Effective Cash</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Cost of Share</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Cost of Share</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options at</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options at</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering Price</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options Granted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant Date</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Jeffrey Parker</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,570</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chairman &#38; CEO
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,465</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">191,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">309,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">312,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Frederick McTaggart</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">President, COO and CFO
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">309,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">315,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Peter Ribbins</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Director of Special Projects
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,824</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">299,683</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">307,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Gregory McTaggart</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">VP of Operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,472</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">J. Bruce Bugg</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7/20/99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">180,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vice Chairman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5/1/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">202,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/10/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">335,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Share Grants</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Effective Cash</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Effective Cash</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Cost of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Cost of</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ordinary Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ordinary Shares</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ordinary</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">at Grant Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">at Offering Price</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares Granted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant Date</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(U.S. $)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Belize Senior Management</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,547</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12/31/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="21"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Non-Executive Directors</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10/1/99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10/1/00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10/1/01</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,798</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9/17/02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "BANK FINANCING AGREEMENTS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV align="center">
<B><FONT size="2">BANK FINANCING AGREEMENTS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we entered into a loan
agreement with Scotiabank (Cayman Islands) Ltd. to finance the
recent acquisitions and refinance a portion of our existing
debt. The facilities are comprised of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$2&nbsp;million revolving line of credit bearing
    interest at the floating base rate as established by Cayman
    Island Class&nbsp;A licensed banks from time to time. The
    present interest rate is 5.25%.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$20&nbsp;million seven-year term loan bearing
    interest at an annually adjusted floating rate of LIBOR plus
    1.5% to 3%, depending on the ratio of our consolidated debt to
    our consolidated earnings before interest, taxes, depreciation
    and amortization. The present interest rate is 4.06%.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$17.1&nbsp;million six-month term loan bearing
    interest on the same basis as the seven-year term loan. The
    present interest rate is 4.06%.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have used the proceeds from these facilities
to refinance our existing debt, for working capital and to
finance our recent acquisitions. We intend to use a portion of
the net proceeds from this offering to repay the balance of
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;borrowed
under the six-month term loan described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of February&nbsp;28, 2003, we have drawn down
$28,056,126 from our Scotiabank facilities. We anticipate
drawing down approximately $8,113,020 in additional funds to
complete our acquisition of Waterfields.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are required to make monthly payments of
interest for all borrowings under the revolving line of credit
and quarterly payments of interest for all amounts drawn down
under the two term loans. We are obligated to make 28 equal
quarterly payments of principal under the seven-year term loan
and all amounts borrowed under the six-month term loan must be
repaid as of August&nbsp;6, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have collateralized all borrowings under the
three facilities by providing Scotiabank with a first lien on
all of our assets, including the capital stock we acquired in
our recent acquisitions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The loan agreement for the three facilities
contains standard terms and conditions for similar bank loans
made in the Cayman Islands, including acceleration of the
repayment of all borrowings either upon the demand of Scotiabank
or in the event of default under the loan agreement. In
addition, we will require consent of Scotiabank, which may not
be unreasonably withheld, before we do any of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">enter into a merger, acquire or change our line
    of business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">incur any additional borrowings, enter into
    guarantees or other contingent liabilities or further encumber
    our assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any advances to our shareholders or
    affiliates; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make aggregate capital expenditures in excess of
    $2&nbsp;million during any fiscal year.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "SELECTED CONSOLIDATED FINANCIAL INFORMATION" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="center">
<B><FONT size="2">SELECTED CONSOLIDATED FINANCIAL
INFORMATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We voluntarily adopted accounting principles
generally accepted in the United States of America, effective
January&nbsp;1, 2000. Previously, financial statements were
prepared in accordance with International Financial Reporting
Standards.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial information includes
the accounts of our wholly-owned subsidiaries. The operating
results of these subsidiaries have been included in the
financial statements since the date of acquisition. All
inter-company balances and transactions have been eliminated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Set forth below is selected financial data based
upon our consolidated financial statements. The table contains
information (expressed in U.S. dollars) derived from our audited
consolidated financial statements for each of the years in the
three-year period ended December&nbsp;31, 2002. This selected
financial data should be read in conjunction with the more
detailed financial statements and related notes beginning on
page&nbsp;F-1 of this prospectus.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">except for per share data)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Statement of Income
    Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,577</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,029</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,918</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,318</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">449</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">As of December&nbsp;31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,846</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,153</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,214</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,457</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,701</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "UNAUDITED CONDENSED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="center">
<B><FONT size="2">UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unaudited condensed pro forma consolidated
financial statements are presented to give effect to
transactions which were recently completed or which we
anticipate completing on or before May&nbsp;31, 2003 with the
shareholders of DesalCo Limited (&#147;DesalCo&#148;), DesalCo
(Barbados) Ltd. (&#147;DesalCo (Barbados)&#148;), Ocean
Conversion (Cayman) Limited (&#147;Ocean Conversion
(Cayman)&#148;), Ocean Conversion (BVI)&nbsp;Ltd. (&#147;Ocean
Conversion (BVI)&#148;) and Waterfields Company Limited
(&#147;Waterfields&#148;) (collectively, the &#147;recent
acquisitions&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After completion of the transactions, we will own
100% of DesalCo and its wholly-owned subsidiary, DesalCo
(Barbados), 100% of Ocean Conversion (Cayman), 43.5% of Ocean
Conversion (BVI), and 90.9% of Waterfields. Additionally, we
will have 50% of the profit sharing rights of Ocean Conversion
(BVI).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with Article&nbsp;11 of
Regulation&nbsp;S-X, an unaudited condensed pro forma
consolidated balance sheet is being presented as of
December&nbsp;31, 2002 as if the recent acquisitions had
occurred on December&nbsp;31, 2002 and an unaudited condensed
pro&nbsp;forma consolidated statement of income is being
presented for the year ended December&nbsp;31, 2002 as if the
recent acquisitions had occurred on January&nbsp;1, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited condensed pro forma consolidated
financial statements are based on the audited historical
consolidated financial statements of Consolidated Water Co. Ltd.
and the audited historical financial statements and combined
financial statements of the recent acquisitions as of and for
the year ended December&nbsp;31, 2002. The audited historical
financial statements for our company and the recent acquisitions
used in the preparation of these unaudited condensed
pro&nbsp;forma consolidated financial statements were all
prepared in accordance with United&nbsp;States generally
accepted accounting principles. The audits were conducted in
accordance with United&nbsp;States generally accepted auditing
standards. The audited financial statements or audited combined
financial statements of each of the recent acquisitions, and the
audit reports thereon, are included within this document and
should be read in conjunction with the unaudited pro forma
consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase method of accounting has been used
to prepare the unaudited condensed pro forma consolidated
financial statements. Under the purchase method of accounting,
the total estimated purchase price, calculated as described in
Note&nbsp;2 to the unaudited condensed pro&nbsp;forma
consolidated financial statements, is allocated to the net
tangible and intangible assets of each of the recent
acquisitions based on fair values. Our acquired interests in
Ocean Conversion (BVI) have been accounted for using the equity
method of accounting. Under the equity method of accounting, the
investment in Ocean Conversion (BVI) is recorded at cost and
adjusted for the company&#146;s share of earnings or losses,
less dividends.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited condensed pro forma consolidated
financial statements, including the pro&nbsp;forma adjustments
and explanatory notes thereto, are for illustrative purposes
only. In the opinion of management, the unaudited condensed
pro&nbsp;forma consolidated financial statements include all
adjustments necessary to present fairly the results of the
periods presented. The unaudited condensed pro forma
consolidated financial statements are not intended to represent
or be indicative of the consolidated results of operations or
financial condition of Consolidated Water Co. Ltd. that would
have been reported had the acquisitions been completed as of the
dates presented, and should not be taken as representative of
the future consolidated results of operations or financial
condition of Consolidated Water Co. Ltd.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
BALANCE SHEET</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">OF CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">As at December&nbsp;31, 2002</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">CWCO</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">WCL</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Combined**</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Note*</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="26" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current Assets:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">568,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">261,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,173,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,794,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">c</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,797,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,406,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">870,011</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,246,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,991,778</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,531,671</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">388,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">652,643</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">693,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(168,685</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,565,894</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370,429</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,716</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">523,792</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred Expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">887,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">g</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,320,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities available for sale
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58,960</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">d</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of loans receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,080,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,080,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Current Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,621,667</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,933,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,281,994</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,819,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,313,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,313,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,253,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,765,991</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,057,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,808,172</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,268,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investment in affiliate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,898,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,898,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investments in other companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,012,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,012,501</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">e</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,619,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,868,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">a</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,488,735</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,824,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">a</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,824,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,507,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,699,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,665,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,626,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="26" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND STOCKHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current Liabilities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and other liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,077,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">308,615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">766,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">168,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">b, c</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,320,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">518,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">730,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,432,143</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">h</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,209,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Current Liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,595,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">837,473</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,496,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,530,051</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,074,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,355,435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,930,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,980,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">b, h</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,340,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other long term liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136,235</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136,235</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interests in Waterfields
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">685,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">685,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit sharing provision
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,605,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,605,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">a, b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,806,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,192,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,032,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,692,001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Stockholders&#146; Equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,792,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">558,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,808,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,148,594</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">i, j</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,010,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,354,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,921,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,229,030</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">i, j</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,369,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redeemable preferred stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,531,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,452,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,479,435</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">j</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,531,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(48,960</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">j</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Stockholders&#146; Equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,701,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,506,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,632,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,934,134</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Liabilities and Stockholders&#146;
    Equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,507,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,699,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,665,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,626,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The letters refer to a description of the pro
    forma adjustments in Note&nbsp;2.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The combined accounts represent a combination of
    the financial statements of DesalCo Limited and subsidiary
    (DesalCo (Barbados) Ltd.), Ocean Conversion (Cayman) Limited,
    and Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">See accompanying notes to the unaudited condensed
pro&nbsp;forma consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
STATEMENT OF INCOME</FONT></B>

<DIV align="center">
<B><FONT size="2">OF CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">For the year ended December&nbsp;31,
2002</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">CWCO</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">WCL</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Combined**</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Note*</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Consolidated</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,910,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,086,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,247,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,708,594</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b,d</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,536,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service and other operating income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">281,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">359,586</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b,d</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,124,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenue
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,191,766</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,086,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,730,687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,660,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,882,177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,552,496</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,589,779</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,010,315</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b,d,f</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13,014,137</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Gross profit</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,309,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,534,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,140,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,646,180</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,747,990</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,029,795</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,367,480</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,138,345</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b,d,g,h</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,283,610</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income from operations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,561,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">504,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,773,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,362,570</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income (expenses)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">869,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(62,759</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b,d</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">830,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit sharing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,307,080</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,307,080</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">a,b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity in net income of OC(BVI)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,377,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">b</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,377,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(437,401</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,208,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income before income taxes and minority
    interest</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,336,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,571,023</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(111,232</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(111,232</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minority interest in Waterfields
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,906</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(46,906</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,224,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,412,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Basic earnings per share</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.06</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Diluted earnings per share</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Weighted average number of common stock used
    in the determination of:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,969,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,175,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,087,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,269,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp; *&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The letters refer to a description of the pro
    forma adjustments in Note 2.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The combined accounts represent a combination of
    the financial statements of DesalCo Limited and subsidiary
    (DesalCo (Barbados) Ltd.), Ocean Conversion (Cayman) Limited,
    and Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">See accompanying notes to the unaudited condensed
pro forma consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">24
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<DIV align="center">
<B><FONT size="2">NOTES TO THE CONDENSED UNAUDITED PRO
FORMA</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED FINANCIAL STATEMENTS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of
presentation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited condensed pro forma consolidated
financial statements are prepared in accordance with
Article&nbsp;11 of Regulation&nbsp;S-X. Since the historical
financial statements for Consolidated Water Co. Ltd. and each of
the recent acquisitions were prepared in accordance with United
States generally accepted accounting principles and the
accounting policies are substantially comparable, management did
not make any accounting policy conformance adjustments to the
unaudited condensed pro forma consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of these unaudited condensed pro
forma consolidated financial statements in accordance with
Article&nbsp;11 of Regulation&nbsp;S-X 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 they are prepared and the reported
amounts of income and expenses during the period. Actual results
could differ from those estimates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These unaudited condensed pro forma consolidated
financial statements have been prepared by management based on
preliminary estimates of fair values. Therefore, actual amounts
recorded at the completion of the acquisitions may differ
materially from the information presented in these unaudited
condensed pro forma consolidated financial statements due to
management evaluation of the assets and liabilities, the impact
of ongoing integration activities and the recent
acquisitions&#146; net assets at the acquisition date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Transactions and balances between any of the
companies, including our company and each of the recent
acquisitions have been eliminated in the preparation of the
unaudited condensed pro forma consolidated financial statements.
</FONT>

<P align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro forma
adjustments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The significant pro forma adjustments applied to
the historical financial statements in the preparation of the
unaudited condensed pro&nbsp;forma consolidated financial
statements have been prepared based on the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;To reflect the excess of acquisition
    costs over the estimated fair value of the net assets acquired
    (goodwill). The purchase price, the purchase price allocation
    and financing of the transaction are summarized below:
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Purchase price paid is as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash consideration, including acquisition costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,113,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of 185,714 ordinary shares to selling
    shareholders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,291,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total purchase price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,405,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: proceeds from sale of non-voting OC(BVI)
    shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,120,250</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net purchase price of recent acquisitions,
    including acquisition costs and non-cash consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,285,203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allocated to:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Historical book value of assets and liabilities
    of:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo Limited, less investments in other
    acquired companies
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,632,169</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ocean Conversion (Cayman), less profit sharing
    liability not assumed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,295,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ocean Conversion (BVI)&nbsp;Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,898,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Waterfields Company Limited, net of minority
    interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,820,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible assets acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,868,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Relocation and termination costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(55,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total allocation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,461,141</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess purchase price over allocation to
    identifiable assets and liabilities (goodwill)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,824,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">NOTES TO THE CONDENSED UNAUDITED PRO
FORMA</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED FINANCIAL STATEMENTS&nbsp;&#151;
(Continued)</FONT></B>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">The preliminary purchase price allocation
    performed by management assumes that fair value approximates the
    carrying value of net tangible assets as reflected in the
    audited financial statements of each of the recent acquisitions,
    after making adjustments specific to the acquisitions as
    explained in the notes to the unaudited condensed pro forma
    consolidated financial statements. Specifically, due to the
    recent or pending nature of the transactions, management has not
    assigned fair values to property, plant and equipment based on
    net replacement value. Management has assigned the cost of the
    equity interests in Ocean Conversion (BVI) based on the price,
    net of acquisition costs, at which management has negotiated
    with a third party to sell shares thereof. The fair value of
    intangible assets is based on management&#146;s estimates using
    discounted cash flow techniques at a discount rate of 15%. The
    estimates used in the valuation of intangible assets were based
    upon assumptions believed to be reasonable, but which are
    inherently uncertain and unpredictable. Assumptions may be
    incomplete or inaccurate and unanticipated events and
    circumstances may occur. Accordingly, actual results may vary
    from those presented.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;To remove all balance sheet and
    statement of income amounts for Ocean Conversion (BVI)&nbsp;that
    are included in the combined accounts and record the
    company&#146;s investment in Ocean Conversion (BVI) and profits
    thereon under the equity method based on ownership of 43.5% of
    the total voting and non-voting shares outstanding.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;To reflect net financing cashflows of
    $2,794,403 comprised of the following:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,100,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of non-voting Ocean Conversion
    (BVI)&nbsp;shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,120,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing cash inflows
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,220,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash consideration paid to selling shareholders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,613,742</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of existing Royal Bank of Canada debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,687,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment of debt fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">859,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Investing and financing cash outflows
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,160,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cashflow
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,059,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: Ocean Conversion (BVI)&nbsp;cash balances
    removed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(264,988</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net pro forma adjustment to cash
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,794,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;To eliminate transactions and balances
    between or among Consolidated Water Co. Ltd. and the acquired
    companies.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;To eliminate DesalCo&#146;s investments
    of 297,700&nbsp;shares in Ocean Conversion (Cayman) and
    1,911&nbsp;shares in Waterfields as these ownership interests
    have been taken into account in consolidation.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;To reflect amortization of intangible
    assets purchased.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;To reflect acquisition-related financing
    fees and expenses and amortization thereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;To reflect debt of $37,100,000 raised to
    finance the purchase of the recent acquisitions and refinance
    existing loans of $1,687,500. The debt bears interest at a rate
    of 4.08% and consists of a term loan of $20,000,000, with
    quarterly payments through February&nbsp;7, 2010, and a short
    term loan of $17,100,000, payable within twelve months.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;To record additional 185,714 ordinary
    shares issued pursuant to the acquisition with par and fair
    values of $1.20 and $12.34, respectively.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;To eliminate share capital, additional
    paid-in capital, and retained earnings of the acquired entities.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">26
</FONT>

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<DIV align="center">
<B><FONT size="2">NOTES TO THE CONDENSED UNAUDITED PRO
FORMA</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED FINANCIAL STATEMENTS&nbsp;&#151;
(Continued)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro forma
earnings per share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The calculation of unaudited pro forma basic and
diluted earnings per share is based on the weighted average
number of common stock shares of Consolidated Water Co. Ltd.
outstanding assuming the additional shares issued as part
consideration for the recent acquisitions were issued on
January&nbsp;1, 2002.
</FONT>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring
costs</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management has assessed costs and formulated
plans to relocate certain activities and employees and to
terminate employment contracts of certain other employees of
DesalCo Limited. These assessments are still in progress. Based
on a preliminary analysis to date, costs of approximately
US$55,000 will be incurred after completion of the recent
acquisitions for severance pay and relocation costs related to
DesalCo Limited. These estimated costs are reflected in the
unaudited condensed pro&nbsp;forma consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<P align="left">


<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been operating our business on Grand
Cayman since 1973 and have been using reverse osmosis technology
to convert seawater to potable water since 1989. 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. We obtain water from our three reverse osmosis plants on
Grand Cayman (Governor&#146;s Harbour, West Bay and Britannia
plants), which together are capable of producing approximately
2.4&nbsp;million U.S. gallons per day. We own our reverse
osmosis plants and substantially all of the 65&nbsp;miles of our
underground pipeline distribution infrastructure. In addition to
our business in the Cayman Islands, we have been providing
potable water to Belize Water Services Limited from our reverse
osmosis seawater conversion plant in Ambergris Caye, Belize
since July 2000 and to South Bimini International Ltd. in the
Bahamas from our New Providence seawater conversion plant since
July 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recently acquired interests in five companies
which operate a total of seven plant facilities. These
acquisitions provide us with facilities and contracts to supply
additional potable water service in the Cayman Islands, the
Bahamas, Barbados and the British Virgin Islands, as well as a
Bermuda-based desalination facility management, engineering and
construction services firm. The total capacity of these plants
is approximately 8.0&nbsp;million U.S. gallons per day. These
recent acquisitions increased the daily capacity of the plants
that we operate from approximately 2.9 to 10.9&nbsp;million U.S.
gallons per day. Pro forma revenues which take into account the
recent acquisitions after elimination of intercompany sales for
the year ended December&nbsp;31, 2002 would have been
$21.7&nbsp;million if the acquisitions had occurred on
January&nbsp;1, 2002. Pro forma consolidated net income for the
same period would have been $4.4&nbsp;million. If these
acquisitions had taken place on January&nbsp;1, 2002, our pro
forma revenues would have increased by approximately 77.7% and
our pro forma net income would have increased by 71.3% for the
year ended December&nbsp;31, 2002. In addition, the capacity of
the plants that we operate would have increased by approximately
276% for the year ended December&nbsp;31, 2002. See
&#147;Unaudited Condensed Pro Forma Consolidated Financial
Statements&#148; on page 22. The pro forma adjustments relating
to the acquisition of these entities are based upon, available
information and assumptions that are considered reasonable under
the circumstances. Final adjustments could differ from these
adjustments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In years prior to our recent acquisitions, our
income, other than from water sales, has not been material and
has been shown as other income in our financial statements. In
the future, we expect that income, other than from water sales,
will be material and therefore, will be reflected in sales in
our financial statements. The proposed future treatment is
reflected in &#147;Unaudited Condensed Pro Forma Consolidated
Financial Statements.&#148;
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water
Sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Water sales income is comprised of retail water
sales, via pipeline, to our individual Cayman Islands customers,
and bulk water sales.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Expenses include the cost of water sales
(&#147;direct expenses&#148;) and our indirect, or general and
administrative, expenses. Direct expenses include royalty
payments to the Cayman Islands government; electricity and
chemical expenses; payments to Ocean Conversion (Cayman)
relating to the operation of the Governor&#146;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,
stock compensation expenses, office lease payments, depreciation
on fixed assets used for administrative purposes, legal and
professional fees and financing costs. There are no income taxes
in the Cayman Islands or the British Virgin Islands and we are
currently exempt from taxes in Belize. We may be liable for
gross revenue tax in the Bahamas as disclosed in
</FONT>

<P align="center"><FONT size="2">28
</FONT>
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<DIV align="left">
<FONT size="2">our discussion of our Bahamas operations in the
Business section of this prospectus but do not currently pay any
taxes in the Bahamas.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of our financial statements
requires management to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates,
including those related to trade accounts receivable, deferred
expenditures, property, plant and equipment and intangible
assets and stock and stock option incentive plans. We base our
estimates on historical experience and on various other
assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results
may differ from these estimates. We believe the following
critical accounting policies are the most important to the
portrayal of our financial condition and results and require
management&#146;s more significant judgments and estimates in
the preparation of our consolidated financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Trade accounts receivable:
</FONT></I><FONT size="2">We maintain allowances for doubtful
accounts for estimated losses resulting from the inability of
our customers to make required payments. Management continuously
evaluates the collectibility of accounts receivable and records
allowances for doubtful accounts based on estimates of the level
of actual write-offs which might be experienced. These estimates
are based on, among other things, comparisons of the relative
age of accounts and consideration of actual write-off history.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Deferred expenditures:
</FONT></I><FONT size="2">These costs were incurred in
connection with the recent acquisitions and financing
transactions. Costs relating to the acquisitions will be
included as part of the purchase price allocation and we will
seek to repay a portion of our existing debt with the net
proceeds of this offering. If we do not proceed with this
offering we may be required to expense the amounts relating to
the financing transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Property, plant and equipment:
</FONT></I><FONT size="2">Management makes estimates for the
useful life of assets and reviews its policies from time to
time. In 2001, we carried out an extensive engineering analysis
of our potable water productions and distribution equipment in
Grand Cayman. As a result of the analysis, management reassessed
the useful economic lives of certain assets. The reassessment
resulted in reduced depreciation of $197,472, or $0.05&nbsp;per
share on a basic and fully diluted basis for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Intangible assets:
</FONT></I><FONT size="2">Intangible assets recorded are
amortized over their estimated useful lives and reviewed for
impairment in accordance with SFAS No. 142. Management tests for
impairment by evaluating the remaining useful life of an
intangible asset that is being amortized each reporting period
to determine whether events and circumstances warrant a revision
to the remaining period of amortization. Impairment is tested
based on projected discounted future cash flows using a discount
rate reflecting our average cost of funds. If our estimated
projections are greater than our actual results there may be an
impairment that has not been reflected in the accounts.
</FONT>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year Ended
December&nbsp;31, 2002 Compared to Year Ended December&nbsp;31,
2001</FONT></I></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water
sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total water sales increased by 8.0% from
$11,026,923 to $11,910,720 for the years ended December&nbsp;31,
2001 and 2002, respectively. Total water sales increased as a
result of several factors detailed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operation added $551,783 to water
sales, which is an increase of 5.6% over the prior year and
represents 62.4% of the total increase of water sales. The
number of U.S. gallons we sold increased by 10.3% over the prior
year. This is the result of supplying approximately
52&nbsp;million U.S. gallons of water to the Hyatt Hotel and the
Britannia golf course. Our water sales to customers other than
the Hyatt Hotel and the Britannia golf course were essentially
flat when compared to the prior year, despite a 9.4% reduction
in tourist air arrivals to the Cayman Islands due to continued
air travel concerns and the downturn of the U.S. economy.
</FONT>

<P align="center"><FONT size="2">29
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Belize operation added $240,323 to water
sales, which is an increase of 19.5% over the prior year and
represents 27.2% of the total increase of water sales. In June
2002, the automatic inflation adjustment decreased our Belize
water rates by an average of 0.08%. This was more than offset by
a 20.0% increase in the number of U.S. gallons sold over the
prior year. This increase occurred because during the year ended
December&nbsp;31, 2001, we experienced equipment malfunctions
which temporarily reduced the production capacity of our plant
by 50%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations increased
water sales by $91,691, which is an increase of 348.2% over the
prior year and represents 10.4% of the total increase of water
sales. This was the result of a 348.4% increase in the number of
U.S. gallons sold over the prior year.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of water
sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cost of water sales increased by 12.7% from
$6,109,117 to $6,882,177 for the years ended December&nbsp;31,
2001 and 2002, respectively, while water sales revenues
increased by 8.0%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operations increased cost of water
sales by $526,748, which is an increase of 9.9% over the prior
year and represents 68.1% of the total increase of cost of water
sales. Water sales revenue for our Cayman operations increased
5.6%. The cost of water sales increased as a result of direct
costs incurred to operate the Britannia plant, which was
acquired on February&nbsp;1, 2002. These costs included salaries
and benefits for additional staff, equipment maintenance costs,
electricity, chemicals and insurance, which will continue now
that we operate the Britannia plant. Higher insurance costs also
increased cost of water sales due to higher premium rates from
our insurance provider, and additional insured values following
the purchase of the Britannia plant and the insurance for the
full replacement value of all our reverse osmosis desalination
plants. Some of this increase was offset after the Britannia
plant was purchased by a decrease in water purchase costs
resulting from lower volume purchases from Ocean Conversion
(Cayman). We were unable to take full advantage of the lower per
gallon production costs of the Britannia plant as it only
operated at 47.6% capacity in the eleven months that we owned
the Britannia plant due to contractual minimum purchase
requirements from Ocean Conversion (Cayman).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Belize operation increased cost of water
sales by $144,334, which is an increase of 20.1% over the prior
year and represents 18.7% of the total increase of cost of water
sales. Water sales revenue for our Belize operation increased
19.5%. We completed rebuilding the second diesel engine, in
accordance with the engine manufacturer&#146;s preventive
maintenance recommendations, which increased our cost of water
sales. Also increasing our cost of water sales were additional
repairs and maintenance on the existing reverse osmosis
equipment. We also settled various claims for compensation made
by our customer in Belize in March 2002. These claims were the
result of our equipment failures that occurred in August and
September 2001 and a minor miscalculation in the annual
inflation adjustment formula in our contract. The miscalculation
dated back to November 1995, which was prior to our acquisition
of Belize Water Limited, and upon correction, reduced our unit
rate for water to our customer by $0.09&nbsp;per 1,000 U.S.
gallons.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations increased
cost of water sales by $101,978, which is an increase of 218.7%
over the prior year and represents 13.2% of the total increase
of cost of water sales. Water sales revenue for our Bahamas
operation increased 348.2%.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
profit</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins decreased from 44.6% to
42.2% for the years ended December&nbsp;31, 2001 and 2002,
respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Cayman operations
decreased from 45.3% to 43.1% for the years ended
December&nbsp;31, 2001 and 2002, respectively. The primary
reasons for this decrease are (i)&nbsp;approximately two thirds
of the water produced by our Britannia plant was sold to the
Hyatt Hotel and Britannia golf course at a lower rate than our
standard commercial water rate, (ii)&nbsp;due to flat water
sales to other customers, we were only able to utilize
approximately 47.6% of the production capacity of the Britannia
plant, and (iii)&nbsp;we were
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<DIV align="left">
<FONT size="2">not able to acquire water from our lowest price
source as a result of minimum water purchase obligations that we
had with Ocean Conversion (Cayman).
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Belize operations
decreased from 41.7% to 41.4% for the years ended
December&nbsp;31, 2001 and 2002, respectively. The reason for
the decrease in the gross profit margins is increased cost of
water sales over prior year periods due to the settlement costs
with Belize Water Services Ltd. as discussed above and
additional repairs and maintenance on the reverse osmosis
equipment in Belize.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Bahamas operations
increased from a negative 77.1% to a negative 25.9% for the year
ended December&nbsp;31, 2002. The low gross profit margins were
due to low water sales resulting from a reduction of tourism 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. Our Bahamas operation has generated positive cash flow
since January 2002.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indirect
expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indirect expenses increased by 5.7% from
$2,600,016 to $2,747,990 for the years ended December&nbsp;31,
2001 and 2002, respectively. Indirect expenses were at 22.7% and
22.5% of total income for the year ended December&nbsp;31, 2001
and 2002, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operations increased indirect expenses
by $107,890, which is an increase of 4.5% over the prior year
and represents 72.9% of the total increase of indirect expenses.
We attribute this increase to our accounting for stock
compensation costs, unanticipated professional fees relating to
our December&nbsp;31, 2001 audit and Form&nbsp;10-K review
together with increased insurance premiums on our commercial and
directors and officers insurance. Stock compensation costs
increased $266,773 as a result of an increase in our share price
during the last fiscal quarter. Unanticipated professional fees
relating to our December&nbsp;31, 2001 audit and 10-K review
were $59,311 and our commercial and directors and officers
insurance increased by $78,503. We also had additional reporting
costs in 2002 due to increased demand for our annual report and
proxy statements. These increases were mostly offset by a
reduction in bonus costs and subscription costs compared to the
prior year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Belize operations increased indirect expenses
by $35,273, which is an increase of 18.5% over the prior year
and represents 23.8% of the total increase of indirect expenses.
We had additional costs as a result of higher insurance premiums
and increased costs to repatriate funds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations as of
July&nbsp;11, 2001 increased indirect expenses by $4,811, which
is an increase of 116.6% over the prior year and represents 3.3%
of the total increase of indirect expenses. These costs relate
to the administration of the Bahamas operations for a full year.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other income consists of monthly meter rental
charges, sales to companies that deliver water by truck,
connection and re-connection charges and interest income. Until
February&nbsp;1, 2002, other income also included settlement fee
payments for the supply of water to the Britannia development by
the Hyatt Hotel, which had its own water production facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other income decreased by 33.8% from $446,783 to
$295,757 for the years ended December&nbsp;31, 2001 and 2002,
respectively. This decrease was a result of the February&nbsp;1,
2002 termination of the dispute settlement agreement with Cayman
Hotel and Golf Inc., the owner of Hyatt Grand Cayman Resort and
Britannia golf course. These decreases were partially offset by
small increases in meter rental fees, reconnection fees and
interest income from excess cash balances and on overdue
receivables for our Belize operations.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In March 2001, we increased our per share
dividend to ordinary shareholders from $0.10 to $0.105 per
quarter and paid dividends of this amount during the year ended
December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net income decreased by 6.8% from $2,764,573 to
$2,576,310 for the years ended December&nbsp;31, 2001 and 2002,
respectively, as a result of the factors indicated above.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year Ended
December&nbsp;31, 2001 Compared To Year Ended December&nbsp;31,
2000</FONT></I></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water
sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Total water sales increased by 15.1% from
$9,576,959 to $11,026,923 for the years ended December&nbsp;31,
2000 and 2001, respectively. Total water sales increased as a
result of several factors detailed below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operation added $657,784 to water
sales, which is an increase of 7.2% over the prior year and
represents 45.4% of the total increase of water sales. Of this
increase, 70.1% was due to a 5.1% increase in the number of U.S.
gallons sold. This increase was due to a larger customer base
and increased usage by commercial, residential and government
customers, primarily Water Authority-Cayman, which experienced
temporary shortfalls in its production capacity. The remaining
29.9% of the increase was due to an increase in water rates of
approximately 2.5% in accordance with our license agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman Island average water rate for the
first nine months of 2001 was $20.54&nbsp;per thousand U.S.
gallons. For the final three months of 2001, our rates were
reduced by 1.2% using the Cayman Islands Consumer Price Index
automatic adjustment formula contained in our license. Our rates
were automatically reduced by 0.39% in January 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Belize operation added $765,847 to water
sales, which is an increase of 164.7% over the prior year and
represents 52.8% of the total increase of water sales. Virtually
all of the increase was due to an additional six months of
operations over the prior period. The number of U.S. gallons
sold in 2001 was however 21% higher than the annual figures of
the prior year due to increased demand met from an expansion of
the plant completed in March 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations as of
July&nbsp;11, 2001 increased water sales by $26,333, which
represents 1.8% of the total increase of water sales.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of water
sales</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cost of water sales increased by 12.6% from
$5,423,297 to $6,109,117 for the years ended December&nbsp;31,
2000 and 2001, respectively, while our water sales revenue
increased 15.1% for the year ended December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operations increased cost of water
sales by $171,425, which is an increase of 3.3% over the prior
year and represents 25.0% of the total increase of cost of water
sales. Water sales revenue for our Cayman operations increased
7.2%. Although cost of water sales increased, it increased at a
lower rate than our water sales because we benefit from
efficiency savings in our water production operation when we
produce more water.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the operations of Belize Water
Limited as of July&nbsp;21, 2000 increased the cost of water
sales by $467,769, which is an increase of 186.8% over the prior
year and represents 68.2% of the total increase of cost of water
sales. Water sales revenue for our Belize operations increased
164.7% for the year ended December&nbsp;31, 2002. The increase
in cost of water was due to increased water production to meet
increased sales and machinery repairs related to the August and
September 2001 equipment malfunctions, all of which were
remedied in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations as of
July&nbsp;11, 2001 increased cost of water sales by $46,626,
which represents 6.8% of the total increase of cost of water
sales.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross
profit</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins increased from 43.4% to
44.6% for the years ended December&nbsp;31, 2000 and 2001,
respectively.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Cayman operations
increased from 43.2% to 45.3% for the years ended
December&nbsp;31, 2000 and 2001, respectively, as a result of
decreased depreciation expense of approximately $197,000 from
our reassessment of the useful economic lives of certain assets
and increased plant efficiencies. These lower expenses were
offset by additional labor costs associated with plant
maintenance, increased insurance premiums and an additional six
months of intangible amortization for the Belize water supply
contract.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Belize operations
decreased from 46.2% to 41.7% for the years ended
December&nbsp;31, 2000 and 2001, respectively, as a result of
repair costs and higher electricity costs resulting from the
temporary utilization of a less efficient electric motor during
the repair period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Gross profit margins for our Bahamas operations
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.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indirect
expenses</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indirect expenses increased by 18.3% from
$2,197,569 to $2,600,016 for the years ended December&nbsp;31,
2000 and 2001, respectively. Indirect expenses were at 21.9% and
22.7% of total income for the years ended December&nbsp;31, 2000
and 2001, respectively.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman operations increased indirect expenses
by $240,830, which is an increase of 11.1% over the prior year
and represents 59.9% of the total increase of indirect expenses.
Of this increase, 49.0% is due to the creation of a new
executive position, Director of Special Projects.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our acquisition of Belize Water Limited as of
July&nbsp;21, 2000 increased indirect expenses by $157,491,
which is an increase of 471.2% over the prior year and
represents 39.1% of the total increase of indirect expenses.
This increase was primarily due to an additional six months of
indirect expenses over the previous period and the reallocation
of certain employee duties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The addition of the Bahamas operations as of
July&nbsp;11, 2001 increased indirect expenses by $4,126, which
represents 1.0% of the total increase of indirect expenses.
These costs related to the administration of the Bahamas
operations.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other income decreased by 0.4% from $448,727 to
$446,783 for the years ended December&nbsp;31, 2000 and 2001,
respectively, as a result of a slight decrease in interest
income on available cash balances.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net
income</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Net income increased by 15.0% from $2,404,820 to
$2,764,573 for the years ended December&nbsp;31, 2000 and 2001,
respectively as a result of the movements indicated above.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2000, we increased our per share
dividend to ordinary shareholders from $0.08 to $0.10&nbsp;per
quarter and paid dividends of this amount during the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reassessment of
Useful Economic Lives of Property, Plant and Equipment</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year ended December&nbsp;31, 2001, we
carried out an extensive engineering analysis of our potable
water production and distribution equipment in Grand Cayman. As
a result of the analysis, management reassessed the useful
economic lives of certain assets. The reassessment resulted in
reduced
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<DIV align="left">
<FONT size="2">depreciation of $197,472, or $.05&nbsp;per share
on a basic and fully diluted basis for the year ended
December&nbsp;31, 2001. The assets affected and the basis for
management&#146;s decisions are described below:
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seven Mile Beach
Distribution System</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2001, we revised our master distribution
plan that was originally set out in 1997. In doing so, we
determined that a previously planned relocation of our
Governor&#146;s Harbour reverse osmosis plant was no longer
advantageous. Therefore, the removal and relaying of pipeline to
this service area in conjunction with this relocation was no
longer needed. Furthermore we determined that certain planned
pipeline replacements were not necessary. Finally, the
government revised its plans for significant road improvements
in the service area, therefore, alleviating anticipated major
changes to our Seven Mile Beach distribution system.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the above plan reassessments, we
concluded that a pipeline with the characteristics of our Seven
Mile Beach Distribution System would have a useful economic life
of 40&nbsp;years. We, therefore, extended the useful economic
life of this system from 20 to 40&nbsp;years. Fourteen years
have elapsed to date.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governor&#146;s
Harbour Vapor Compression (&#147;VC&#148;) Building</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed above, we previously planned to
relocate our Governor&#146;s Harbour plant, which would have
resulted in the removal of the VC building in which it was
housed. When we determined that the plant should remain in its
current location in 2001, we reassessed the building&#146;s
useful life. Giving consideration to our plans to use the
building in the future, the high-quality construction and
foundation of the building, as well as the fact that it
accommodates large high-pressure pumps for the plant, we
concluded that the building had a remaining useful economic life
of 20&nbsp;years from 2001. Two years have elapsed since this
useful economic life was determined.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution
System Meters</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our policy is to replace customer water meters
according to manufacturer recommendations, which suggest
replacement on service years or water volume. The manufacturer
of our water meters advised us that they were extending the
guarantee for a certain model to cover higher volumes and a
longer period of time. Based on the revised guarantee, we
reassessed the useful economic lives of all such models in
service to 10&nbsp;years, being the mid-point of a guaranteed
time-frame of 6&nbsp;to 15&nbsp;years.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vermeer
Trencher</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own a Vermeer trencher to construct water
distribution pipelines within our franchise area. As discussed
above, we originally planned to make major changes to our
distribution system as a result of a proposed relocation of our
Governor&#146;s Harbour plant and significant road improvements
planned by the government. These projects would have required
heavy utilization of this asset. Given the changes in plans
identified above and the minor projects for which the trencher
will be required, we reassessed the useful economic life to be
20&nbsp;years. Four years have elapsed to date.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;West Bay Reverse
Osmosis Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our West Bay reverse osmosis plant was
manufactured and installed in 1995 and expanded in 1998 with
state-of-the-art technology. At the time, we had concerns about
potential accelerated obsolescence of the equipment because of
continuing research and development in the reverse osmosis
field, and as such, the original useful economic life was
determined to be 10&nbsp;years. In 2001, we concluded with
management that there were no indicators that significant
changes were pending in the industry. Given the like-new
condition of the plant, its three year history of meeting
operational requirements and expected future use, management
reassessed the remaining useful economic life of the West Bay
Plant to be 12&nbsp;years at such time.
</FONT>

<P align="center"><FONT size="2">34
</FONT>
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<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overview</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to our completion of the recent
acquisitions, we generated cash primarily from our operations in
the Cayman Islands, the Bahamas and Belize and, to a lesser
extent, from the sale of our shares and through loans and credit
facilities obtained from two banks. As a result of our recent
acquisitions, we began to generate cash from our recently
acquired operations in the Cayman Islands, the British Virgin
Islands, the Bahamas and Barbados. Cash flow is affected by the
timely receipt of customer payments, by operating 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, the British Virgin Islands, Barbados and the Bahamas,
such as weather conditions and the economy. We use cash to fund
our operations in the Cayman Islands, Belize, the British Virgin
Islands, Barbados and the Bahamas, to fund capital projects, 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.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
Activities</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash generated from operating activities for the
years ended December&nbsp;31, 2001 and 2002 was $4,193,921 and
$4,329,607, respectively. We generate cash through the
utilization of our existing plants, equipment and resources in
all segments of the business, minimization of water losses and
operating efficiencies created by our management team. As a
result of our recent acquisitions, we expect our water sales to
approximately double. In addition, we believe that our current
administrative staff will be able to substantially manage our
expanded operations so that our indirect costs will not increase
in proportion to our water sales. In our Bahamas operations, we
experienced positive operating cash flow of $14,397 for the year
ended December&nbsp;31, 2002.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Working
Capital</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002, we had a working
capital surplus of $138,401. This surplus relates mainly to the
cash we generated from our operating activities and management
of our accounts payable and other liabilities. At
December&nbsp;31, 2002, 69.7% of our cash was denominated in
Belizean dollars. We must obtain approval from the Central Bank
of Belize in order to purchase United States dollars for
repatriation to the Cayman Islands. Since we commenced
operations in Belize, the Central Bank of Belize has never
denied our repatriation requests.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investing
Activities</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash used in investing activities during the
years ended December&nbsp;31, 2001 and 2002 was $1,904,237 and
$3,568,723, respectively. Cash was used in investing activities
for expenditures for new property, plant and equipment,
including $1,500,000 on the purchase of the Britannia reverse
osmosis plant in 2002. We also continued to expand our water
distribution system in the Cayman Islands by constructing
additional pipelines to service new developments within our
exclusive licensed area. During the same period in 2001, our
investing activities consisted of construction costs relating to
our new water production and distribution system in Bimini, the
Bahamas, as well as expansion costs relating to our water
distribution system in the Cayman Islands.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing
Activities</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we utilized a credit
facility with Scotiabank (Cayman Islands) Ltd. in order to
complete our recent acquisitions and refinance our existing
debt. Cash used in financing activities for the years ended
December&nbsp;31, 2001 and 2002 was $2,024,075 and $709,026,
respectively. During the year ended December&nbsp;31, 2002, our
primary financing activity was a draw down of our credit
facility for an additional $1,500,000 in order to finance the
investment in the Britannia reverse osmosis plant, plus an
increase in our short-term bank indebtedness. We also had
proceeds from an issuance of ordinary shares to certain directors
</FONT>

<P align="center"><FONT size="2">35
</FONT>

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<DIV align="left">
<FONT size="2">and officers who exercised stock options. These
were offset by the payment of our quarterly dividends and
principal payments on our term loans.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash generated from financing activities for the
year ended December&nbsp;31, 2000 was $2,574,717, compared to
cash used of $2,024,075 for the year ended December&nbsp;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 a draw down on our
credit facility, in order to fund the Bahamas development and
the exercise of stock options. During the same period in 2000,
we received $4,962,731, net of share issue costs, from a public
issuance of ordinary shares, 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&nbsp;per share and the repayment of both
short-term and long-term debt, including the balance due on the
Governor&#146;s Harbour plant purchase pursuant to our agreement
with Ocean Conversion (Cayman).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year ended December&nbsp;31, 2002, we
repurchased 2,184 ordinary shares from a long-term employee at
an average price of $15.05 and 702&nbsp;redeemable preference
shares from a former employee at an average price of $5.47.
During the year ended December&nbsp;31, 2001, we repurchased
25,000 ordinary shares under a stock repurchase program at an
average price of $10.86. During the year ended December&nbsp;31,
2000, we repurchased 79,100 ordinary shares at $6.25&nbsp;per
share from a shareholder whose assets were being liquidated. All
of the shares repurchased were cancelled in accordance with
Cayman Islands&#146; law.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material
Commitments for Capital Expenditures and
Contingencies</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002, we had committed
approximately $1,080,000 for capital expenditures for the
purchase, construction and site preparation of two water storage
tanks at our Governors Harbour plant. We intend to finance these
projects using cash from operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of February&nbsp;7, 2003, we have drawn down
$28,056,126 from our Scotiabank facilities. We anticipate
drawing down approximately $8,113,020 in additional funds to
complete our acquisition of Waterfields.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of our acquisition of Ocean Conversion
(Cayman), with the approval of Scotiabank, we have guaranteed
the performance of Ocean Conversion (Cayman) to the Cayman
Islands government, pursuant to the water supply contract with
the Water Authority-Cayman dated April&nbsp;25, 1994 as amended.
In addition, we have also agreed to indemnify the seller in
respect of a guarantee given by the seller to N.T. Butterfield
&#38; Son Ltd. for 100% of the borrowings of Ocean Conversion
(Cayman) totaling $2.4&nbsp;million. We are in the process of
refinancing Ocean Conversion (Cayman)&#146;s loan with
Scotiabank and we will guarantee 100% of the loan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the acquisition of our interests in
Ocean Conversion (BVI), we agreed to indemnify the seller in
respect of a guarantee given by the seller to the bank of N.T.
Butterfield &#38; Son Ltd. for 55% of the borrowings of Ocean
Conversion (BVI)&nbsp;totaling $1.25&nbsp;million. We are in the
process of refinancing Ocean Conversion (BVI)&#146;s loan with
Scotiabank and we will guarantee 50% of the loan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of our pending acquisition of a
controlling interest in Waterfields, we will be required to
provide a performance guarantee to the Water and Sewerage
Corporation of the Bahamas in relation to the water supply
contract between Waterfields and the Water and Sewerage
Corporation.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impact of
Inflation</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of our Cayman Islands license and
the Belize, Bahamas, British Virgin Islands and Barbados water
sales agreements, 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, measured in consistent dollars, will not be material.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exchange
Rates</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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.$&nbsp;1.00 = CI$&nbsp;0.83.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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.$&nbsp;1.00&nbsp;=&nbsp;BZE$&nbsp;2.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The official fixed exchange rate for conversion
of United States dollars into Bahamian dollars as determined by
the Central Bank of The Bahamas, has been fixed since 1973 at
U.S.$&nbsp;1.00&nbsp;=&nbsp;BAH$&nbsp;1.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The official fixed exchange rate for conversation
of United States dollars into Barbados dollars as determined by
the Central Bank of Barbados has been fixed since 1975 at
U.S.$&nbsp;1.00&nbsp;=&nbsp;BDS$&nbsp;2.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The British Virgin Islands&#146; currency is
United States Dollars.
</FONT>

<P align="left">
<B><FONT size="2">Quantitative and Qualitative Disclosure about
Market Risk</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit
Risk:</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not exposed to significant credit risk on
retail customer accounts in the Cayman Islands, as our policy is
to cease supply of water to customers whose accounts are more
than 45&nbsp;days overdue. Our main exposure to credit risk is
from our bulk water sales customers in Belize, the Bahamas, the
British Virgin Islands, Barbados and the Cayman Islands.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest Rate
Risk:</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Currently, we have a loan outstanding of $905,384
from the European Investment Bank at fixed interest rates
ranging from 3.0% to 4.25%. As of February&nbsp;7, 2003, we have
borrowed $28,056,126 at an annually adjusted floating rate of
LIBOR plus 1.5% to 3.0% depending on the ratio of our
consolidated debt to our consolidated earnings before interest,
taxes and depreciation. We are subject to interest rate risk to
the extent that LIBOR or Scotiabank&#146;s prime lending rate
changes.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
Exchange Risk:</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our foreign currencies have fixed
exchanged rates to the U.S. dollar. If any of these fixed
exchange rates become a floating exchange rate, however, our
results of operation could be adversely affected.
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<P align="left">


<!-- link1 "BUSINESS" -->
<DIV align="left"><A NAME="012"></A></DIV>

<DIV align="center">
<B><FONT size="2">BUSINESS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Introduction</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our company, Consolidated Water Co. Ltd., uses
reverse osmosis technology to produce freshwater from seawater.
We process and supply water to our customers in the Cayman
Islands, Belize, Barbados, the British Virgin Islands and the
Commonwealth of the Bahamas. We sell water to a variety of
customers, including public utilities, commercial and tourist
properties, residential properties and government facilities.
For the year ended December&nbsp;31, 2002, we sold
640&nbsp;million U.S. gallons of water and reported total
revenue of $12.2&nbsp;million and net income of
$2.6&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we acquired interests
in five companies which operate a total of seven plant
facilities. These acquisitions increase our daily water
production capacity in the Cayman Islands and the Commonwealth
of the Bahamas and expand our geographic presence to include
Barbados and the British Virgin Islands. As a result of these
acquisitions, our daily capacity has more than tripled from
approximately 2.9 to 10.9&nbsp;million U.S. gallons per day.
With one of these acquisitions, we obtained the exclusive right
through 2009 to distribute the DWEER<SUP>TM</SUP> Energy
Recovery System for use in reverse osmosis seawater desalination
plants in the Caribbean basin. We believe the DWEER<SUP>TM</SUP>
System gives us a distinct competitive advantage when bidding
for new plant construction projects. (See &#147;Recent
Acquisitions&#148;).
</FONT>

<P align="left">
<B><FONT size="2">Market and Service Areas</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we are currently only operating in the
Cayman Islands, Belize, Barbados, the British Virgin Islands and
the Commonwealth of the Bahamas, we believe that our potential
market consists of any location where there is a need for
potable water. Most water-deficient nations in the world have
access to vast amounts of seawater, yet cannot economically
process significant quantities for consumption. The desalination
of seawater, either through distillation or reverse osmosis, is
the most widely used process for producing fresh water in areas
with an insufficient natural supply. We believe our experience
in the development and operation of reverse osmosis desalination
plants provides us with a significant opportunity to
successfully expand our operations beyond the markets in which
we currently operate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to our acquisition of Ocean Conversion
(Cayman), the market that we serviced under our exclusive
license in the Cayman Islands consisted of Seven Mile Beach and
West Bay, Grand Cayman, 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
believe we have consistently provided high quality water to our
customers. The Cayman Islands government, through Water
Authority-Cayman, supplies water to parts of Grand Cayman, which
are not within our licensed area, as well as to Little Cayman
and Cayman Brac. As a result of our acquisition of Ocean
Conversion (Cayman), we operate all of the reverse osmosis
desalination plants of Water Authority-Cayman on Grand Cayman
and supply water under licenses and supply agreements held by
Ocean Conversion (Cayman) with Water-Authority Cayman.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of July 2002, the population of the Cayman
Islands was approximately 36,300. 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. The figures published by the Cayman Islands Government
Department of Tourism show that for the year ended
December&nbsp;31, 2002 the tourist air arrivals decreased 9.4%
and tourist cruise ship arrivals increased 29.6% from the
previous year. Total visitors increased to 1.6&nbsp;million
persons for the year ended December&nbsp;31, 2002 from
1.2&nbsp;million during the year ended December&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2002, construction continued slowly within
our franchise area on the 360-room Ritz Carlton Hotel,
condominiums and golf course development, but construction
activity has become more active with the award of a general
construction contract to a large construction company from the
United States. The developer of this project has announced an
anticipated completion date of late 2003. We are not currently
aware of any similar large developments in the final planning
stages or under construction within our service area in the
Cayman Islands.
</FONT>

<P align="center"><FONT size="2">38
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;6, 2002, the government of the Cayman
Islands amended the Development and Planning Law to permit
construction of buildings up to seven stories high in certain
zones within our franchise area, including commercial and hotel
zones. Previously, buildings in these zones were only permitted
to be built to five stories. We believe that this change in the
law will facilitate the development of certain properties within
our franchise area that may have otherwise not developed under
the former height restrictions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our current operations in Belize are located on
Ambergris Caye. Specifically, we supply water for distribution
to residential, commercial and tourist properties in the town of
San Pedro. This town is located on the southern end of Ambergris
Caye. Ambergris Caye is one of many islands located east of the
Belize mainland and off the southeastern tip of the Yucatan
Peninsula. Ambergris Caye is approximately 25&nbsp;miles long
and, according to the Belize National Population Census 2000,
has a population of about 4,500&nbsp;residents, which has
increased approximately 144% over the past ten years. We provide
bulk potable water to Belize Water Services Limited which
distributes this water to this market. Belize Water Services
Limited currently has no other source of potable water on
Ambergris Caye.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A 185&nbsp;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.
According to information published by the Belize Trade and
Investment Development Service, tourism is Belize&#146;s second
largest source of foreign income, next to agriculture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our current operations in the Bahamas are located
on South Bimini Island and in New Providence. The Bimini Islands
consist of North Bimini and South Bimini, and are two of
700&nbsp;islands which comprise the Bahamas. The Bimini Islands
are located approximately 50&nbsp;miles east of
Ft.&nbsp;Lauderdale, Florida and are a premier destination for
sport fishing enthusiasts. The population of the Bimini Islands
is approximately 1,600&nbsp;persons and the islands have about
200&nbsp;hotel and guest rooms available for tourists. The total
land area of the Biminis is approximately 9&nbsp;square miles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">New Providence, Lyford Caye and Paradise Island,
connected by several bridges, are located approximately
150&nbsp;miles east southeast of the Bimini Islands. With an
area of 151 square miles and a population of approximately
211,000, it is the political capital and the commercial hub of
the Bahamas. The largest city, Nassau, with its famed Cable
Beach, accounts for more than two-thirds of the four million
tourists who visit the Bahamas annually.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The British Virgin Islands, like the Cayman
Islands, are an Overseas Territory of the United Kingdom and are
situated east of Puerto Rico. They consist of 16 inhabited and
more than 20&nbsp;uninhabited islands, of which Tortola is the
largest and most populated island. The islands are the center
for many large yacht-chartering businesses. As of July 2002, it
had a population of approximately 21,250. Our current operations
in the British Virgin Islands are located in Tortola and Jost
Van&nbsp;Dyke.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Barbados, located northeast of Venezuela between
the Caribbean Sea and the North Atlantic Ocean, is an
independent sovereign nation member of the British Commonwealth.
As of July 2002, it had a population of approximately 276,600.
While traditionally known for its cultivation of sugar cane,
more recently, the economy has diversified to include tourism
and light manufacturing. Our current operations in Barbados are
located in St.&nbsp;James.
</FONT>

<P align="left">
<B><FONT size="2">Our Growth Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our strategy is to provide water services in
areas where the supply of potable water is scarce. We have
focused on the Caribbean basin and adjacent areas as our
principal market because these areas have: little or no
naturally occurring fresh water; limited local regulations and
taxes allow for higher returns than most highly regulated
countries; and a large proportion of tourist properties, which
historically have generated higher volume sales than residential
properties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our growth strategy is as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">We intend to continue to develop our
    production and distribution infrastructure and provide high
    quality potable water to our licensed area in the Cayman
    Islands. </FONT></I><FONT size="2">We have increased our share
    of the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">39
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">potable water market in the Cayman Islands as a
    result of our purchase of the Britannia plant and recent
    acquisition of Ocean Conversion (Cayman). We also intend to
    explore the feasibility of either acquiring or obtaining the
    license from the Cayman Island government to operate Water
    Authority-Cayman, which supplies water to parts of Grand Cayman,
    Little Cayman and Cayman Brac.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">We intend to expand our existing operations in
    the Cayman Islands, Belize, Barbados, the British Virgin Islands
    and the Commonwealth of the Bahamas.
    </FONT></I><FONT size="2">For example, through negotiations with
    Belize Water Services Limited, we are seeking to amend the terms
    of our current water supply agreement in Ambergris Caye to
    extend the term of our agreement and to increase the guaranteed
    minimum quantities supplied under our current water supply
    agreement. We intend to seek new water supply agreements for
    other areas in Belize. Similarly, as the development of resort
    properties in Bimini continues, we expect to sell more water to
    additional customers further utilizing our current plant until
    the installation of a larger plant becomes necessary. We also
    believe that the water supply needs in New Providence, Bahamas
    are growing and we intend to pursue the possibility of meeting
    these expanded needs through the use of desalinated water. In
    the British Virgin Islands, work is near completion to expand
    the capacity of our existing plant on the island of Tortola from
    1.2&nbsp;million to 1.6&nbsp;million U.S. gallons per day. We
    expect to complete the expansion in the first half of 2003. We
    are presently conducting preliminary studies to determine
    whether to construct a second plant on the island of Tortola.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">We intend to expand our operations to other
    markets outside of our current areas of operation where there is
    need for potable water. </FONT></I><FONT size="2">In addition to
    our recent acquisitions, we are currently involved in
    preliminary discussions to operate water-making plants and to
    supply water in other new markets and may pursue these
    opportunities either on our own or through joint ventures. So
    far, we have focused on various locations throughout the
    Caribbean basin and Central America.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">We intend to broaden our existing and future
    operations into complementary services.
    </FONT></I><FONT size="2">Prior to the installation of a central
    wastewater system by the Cayman Islands government, we provided
    wastewater services on Grand Cayman. We may reenter this field
    in the Cayman Islands and intend to use our expertise to provide
    such services outside of the Cayman Islands.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Cayman Islands Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman Islands operations currently produce
potable water at six reverse osmosis seawater conversion plants
in Grand Cayman, namely our Governor&#146;s Harbour plant, West
Bay plant, Britannia plant, Lower Valley plant, Red Gate Road
plant and North Sound Road plant. We own the properties where
two of our three water plants are located and have a 25-year
lease for the site on which the third plant is located. The
remaining three plants we operate for Water Authority-Cayman are
located on land owned by the Cayman Islands government. We rent
approximately 3,200 square feet of space for our executive
offices at Trafalgar Place, West Bay Road, Grand Cayman under a
lease which expires on January&nbsp;31, 2004, with an extension
provision until January&nbsp;31, 2005.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Operations
under the License in the Cayman Islands</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our exclusive operational license was issued to
us by the Cayman Islands government in 1979. Unless renewed, the
license terminates on July&nbsp;11, 2010.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 period of time agreed to by the
government and us. 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 the
license to a third party.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We must provide, within our licensed area, any
requested piped water service that, in the opinion of the
Executive Council of the Cayman Islands government, is
commercially feasible. Where service is not considered
commercially feasible, we may require the potential customer to
contribute toward the capital costs
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<DIV align="left">
<FONT size="2">of pipe-laying. We then repay these contributions
to the customer, without interest, by way of a 10% discount on
future billings for water sales until this advance in aid of
construction 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.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our exclusive license, we pay a royalty to
the government of 7.5% of our gross water sales revenue. Other
than the selling prices provided in our agreements with the
Westin Hotel, the Hyatt Hotel and Britannia golf course and
SafeHaven golf course, the selling price of water under the
license varies 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 or 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we want to adjust our prices for any reason
other than inflation or electricity costs, 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 such price increase that we requested
was granted in full in June 1985.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential and
Commercial Operations in the Cayman Islands</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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, the 343-room Westin Hotel, the
354-room 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&nbsp;days after the billing
date and receivables not collected within 45&nbsp;days subject
the customer to disconnection from our water service. In 2002,
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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the Seven Mile Beach area, our primary
customers are the hotels and condominium complexes which serve
the tourist industry. 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.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wastewater
Services in the Cayman Islands</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We began providing sewerage services in
Governor&#146;s Harbour 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&#146;s Harbour is located. On
September&nbsp;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. In
October 2001, we reached an agreement with the Water
Authority-Cayman pursuant to which Water Authority-Cayman
assumed, in November 2002, the operation of two remaining sewage
lift stations, which we had operated.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand for Water
in the Cayman Islands</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, demand on our pipeline distribution
has varied throughout the year. However, a change in tourism
patterns has resulted in year-round tourism and has created more
uniform demand for water throughout the year. Demand depends
upon the number of stay-over tourists visiting the Cayman
Islands and
</FONT>

<P align="center"><FONT size="2">41
</FONT>

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<DIV align="left">
<FONT size="2">the amount of rainfall during any particular time
of the year. The table below lists the total volume of water we
supplied to all of our customers for each of the three years
ended December&nbsp;31, 2002, 2001 and 2000:
</FONT>
</DIV>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(in thousands of U.S. gallons)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">522,995</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">474,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description of
Our Plants in the Cayman Islands</FONT></I>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governor&#146;s
Harbour Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own, operate and maintain our Governor&#146;s
Harbour plant and the 8,745 square feet of buildings in which it
is housed. The plant is located on 3.2&nbsp;acres, including 485
feet of waterfront on which we have an 8,745 square foot
building, which contains the water treatment facility. The
current capacity of our Governor&#146;s Harbour plant is
1.2&nbsp;million U.S. gallons per day.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;West
Bay Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own, operate and maintain a plant located on
6.1&nbsp;acres in West Bay. On this site, we have a
2,600&nbsp;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&nbsp;million U.S. gallon potable water tanks. The
current capacity of our West Bay plant is 710,000 U.S. gallons
per day.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Britannia
Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;1, 2002, we purchased the
Britannia plant, which consists of four seawater reverse osmosis
production units with a combined nominal production capacity of
440,000 U.S. gallons of water per day, an 840,000 U.S. 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&nbsp;years at an annual rent of $1.00.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations
Acquired as a Result of Our Recent Acquisitions</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recently purchased all of the voting stock and
certain profit sharing rights relating to Ocean Conversion
(Cayman) and 50% of the issued and outstanding voting stock and
certain profit sharing rights relating to Ocean Conversion (BVI)
for approximately $14.1&nbsp;million and 185,714 of our ordinary
shares. Simultaneously with the completion of this transaction,
we also purchased all of the issued and outstanding stock of
DesalCo for approximately $11.4&nbsp;million. As a result of our
recent acquisitions, we own 100% of the stock of Ocean
Conversion (Cayman) as well as all of the profit sharing rights
relating to Ocean Conversion (Cayman). While our ordinary shares
issued in the acquisition are not currently registered with the
Securities and Exchange Commission, we are obligated to file a
registration statement with the Securities and Exchange
Commission with respect to these shares by June&nbsp;30, 2003
pursuant to the terms of a registration rights agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following completion of our acquisition of all of
the outstanding stock of each of DesalCo and Ocean Conversion
(Cayman), we assumed operational control of four water
production plants in the Cayman Islands, one of which we already
owned, but had contracted with Ocean Conversion (Cayman) to
operate
</FONT>

<P align="center"><FONT size="2">42
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">until December 2004. The following table provides
additional information about the three newly acquired plants and
their current operations:
</FONT>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Contract/License</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ownership of</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Plant</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Customer</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Expiration Date</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Capacity</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Property</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Red Gate Road, Grand Cayman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">November&nbsp;30, 2008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">1.3&nbsp;million<BR>U.S. gallons per day</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lower Valley, Grand&nbsp;Cayman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">March&nbsp;31, 2006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">792,000<BR>U.S. gallons per day</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Sound Road Grand&nbsp;Cayman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom" nowrap><FONT size="2">October&nbsp;31, 2009</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">792,000<BR>U.S. gallons per day</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="center" valign="bottom"><FONT size="2">Water Authority- Cayman</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Red
Gate Road Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the water production and
supply license between Ocean Conversion (Cayman) and the
government of the Cayman Islands, Ocean Conversion (Cayman) is
allowed to use the property on which the Red Gate Road plant is
located to produce approximately 1.3&nbsp;million U.S. gallons
of desalinated water per day for sale to the Water
Authority-Cayman. Ocean Conversion (Cayman) has possession of
all of the buildings, equipment feed water wells and brine
disposal wells with the exception of the piping from the wells
to the plant (including feed water and brine disposal) and the
main electrical service disconnect, both of which are owned by
Water Authority-Cayman. The property on which the plant is
located is also owned by Water Authority-Cayman. The plant was
originally powered only by electricity, but was upgraded in 1994
to include diesel driven high-pressure pumps. The original
electric driven pumps are still in place as backups, although
the electric pumps alone are not capable of powering the plant
at the full production rate. Upon expiration of the water
production and supply license, as extended, Water
Authority-Cayman will take possession of the plant, including
all buildings and equipment, for no consideration. This license
was extended in November 2001 for a period of seven years and no
further extension options are included in the present license.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Lower
Valley Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (Cayman) sold the Lower Valley
plant and related equipment to Water Authority-Cayman under a
seven-year vendor-financed sale and operating agreement. Ocean
Conversion (Cayman) operates the electrically-powered 792,000
U.S. gallons per day rated plant and supplies desalinated water
to Water Authority-Cayman. Ocean Conversion (Cayman) leases the
property on which the plant is located from Water
Authority-Cayman for a minimal annual rent for the duration of
the sale and operating agreement, which expires on
March&nbsp;31, 2006. The sale and operating agreement contains a
provision to extend the operating portion of the agreement for
an additional period of seven years. Responsibility for
operation of the plant passes to Water Authority-Cayman upon
expiration of the sale and operating agreement.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">The
North Sound Road Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The North Sound Road plant was completed in
October 2002. Ocean Conversion (Cayman) sold the plant and
equipment to Water Authority-Cayman under a seven-year
vendor-financed sale and operating agreement. Ocean Conversion
(Cayman) operates the electrically-powered 792,000 U.S. gallons
per day rated plant and supplies desalinated water to Water
Authority-Cayman. Ocean Conversion (Cayman) leases the property
on which the plant is located from Water Authority-Cayman for a
minimal annual rent, for the duration of the sale and operating
agreement. Responsibility for operation of the plant passes to
Water Authority-Cayman upon expiration of the sale and operating
agreement in October 2009.
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
Services Agreement</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo provides a Managing Director as well as
management and engineering services for each of the plants
operated by Ocean Conversion (Cayman) for a monthly fee of
$30,900. The services include management support, audit
coordination, personnel management and plant management and
maintenance. DesalCo also purchases various parts and materials
for Ocean Conversion (Cayman) at a specified mark-up of 10%, and
provides design services for new plants at a rate of 13% of the
project costs. DesalCo also receives a bonus of 4% of the annual
net operating income of Ocean Conversion (Cayman).
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water
Distribution</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Feed water for each of the reverse osmosis
seawater desalination units is drawn from deep wells on the
properties. Wastewater is discharged into brine wells on the
properties below the level of the feed water intakes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Electricity to the plants is supplied by
Caribbean Utilities&nbsp;Co.&nbsp;Ltd., a publicly traded
utility company. At all three plant sites from which we supply
water to our distribution pipeline, 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, Grand Cayman Island distribution system of Water
Authority-Cayman.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Cayman Islands license requires that our
potable water meet the World Health Organization&#146;s
Guidelines for Drinking Water Quality. On February&nbsp;1, 2003,
we entered into a license amendment with Water Authority-Cayman
under which we are required by November&nbsp;1, 2003 to improve
the aesthetic quality of our potable water supply in our
licensed area to the same quality as that supplied by Ocean
Conversion (Cayman) to Water Authority-Cayman. We will improve
the water quality by reducing the total dissolved solids in that
potable water supply to less than 200 parts per million. We
anticipate making capital expenditures of approximately $500,000
on new plant and equipment and increasing operating costs by
approximately 1%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our potable water distribution system in the
Cayman Islands covers the Seven Mile Beach and West Bay areas of
Grand Cayman and consists of approximately 65 miles of
polyvinylchoride and polyethylene water pipes, valves, curb
stops, meter boxes and water meters. We extend our distribution
system periodically as new property developments are completed.
We have a main pipe loop covering most of the Seven Mile Beach
area. We place extensions of smaller diameter pipe off of our
main pipe to service new developments in our exclusive 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Developers are responsible for laying the
pipeline within their 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a comprehensive layout of our pipeline
system, which is maintained in a computer aided design
(CAD)&nbsp;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.
</FONT>

<P align="center"><FONT size="2">44
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customers</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows, for each of the three
fiscal years ended December&nbsp;31, 2002, 2001 and 2000, our
total number of retail customer pipeline connections at the end
of each period and metered sales of water for that period:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Fiscal Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of Customers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,999</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,836</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miles of Pipeline
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Metered Sales (in thousands of U.S. gallons):
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commercial
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">405,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">358,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">345,940</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Residential
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,661</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Government Facilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,425</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total Metered Sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">522,995</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">474,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">451,298</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table above does not precisely represent the
actual number of customers we service. In hotels and
condominiums, we 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 2002, 49.8%
were hotels, condominiums and other commercial customers, 49.5%
were residential and 0.7% were government facilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for the prices provided in our agreements
with the Westin Hotel, the Hyatt Hotel and Britannia golf course
and SafeHaven golf course, our contractual and average sales
prices for 1,000 U.S. gallons of water sold for the three years
ended December&nbsp;31, 2002, 2001 and 2000 are as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average Sales</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Range of Sales</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2000</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18.62 - $22.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.07 - $23.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&nbsp;8.50 - $22.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a two-year agreement expiring on
December&nbsp;31, 2004 with Safehaven Ltd. to supply non-potable
water on demand to irrigate an 18-hole golf course. After
December&nbsp;31, 2004, the agreement may be terminated by
either party upon four months notice. In 2002, we supplied
39&nbsp;million U.S. gallons of water to Safehaven Ltd.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 seawater desalination equipment. On
February&nbsp;4, 1994, we entered into an agreement with the
owner of the Marriott Hotel to supply between 60,000 and
180,000&nbsp;U.S. gallons of water per month at our standard
tariff rates. If we are requested to supply more than
180,000&nbsp;U.S. gallons in a month, we will provide the water
at our standard tariff rates on a best efforts basis. 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1995, we entered into a ten-year agreement
with the owner of the Westin Hotel. This agreement requires us
to supply up to 1.86&nbsp;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 re-pumping facilities, and has
provided us with a letter of credit that covers the cost of
45&nbsp;days of water supply.
</FONT>

<P align="center"><FONT size="2">45
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, on December&nbsp;10, 2001, we
entered into a twenty-five year agreement, which took effect
February&nbsp;1, 2002, pursuant to which we acquired the
Britannia plant and are required to supply a minimum of
62&nbsp;million U.S. gallons of potable water per year on demand
to our customer, Cayman Hotel and Golf, Inc., the owner of the
Hyatt Grand Cayman Resort and Britannia golf course. Our
customer has committed to pay for a minimum of 62&nbsp;million
U.S. gallons of water per year on a take or pay basis. We are
required by our government license to meet any water demand from
our customer above the 62&nbsp;million U.S. gallons per year.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Cayman Islands are a British Overseas
Territory of the United Kingdom. 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.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customs, Duties
and Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">there are no taxes on our profit, income,
    distributions, capital gains or appreciations in the Cayman
    Islands;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">we do not pay any import duty or taxes on
    permeator membranes, electric pumps and motors and chemicals
    which we purchase;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">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; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ocean Conversion (Cayman) pays all customs duties
    up to 10% in connection with materials and supplies imported for
    the Red Gate Road plant and Ocean Conversion (Cayman) is
    reimbursed for all excess amounts by Water Authority-Cayman.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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&nbsp;14, 2001 to May&nbsp;13, 2003 the
stamp tax rate is temporarily set at 5%. To prevent stamp tax
avoidance by transfer of 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&#146;s Cayman land or interest bears to its
total assets and whether the intention of the transfer is to
transfer ownership or part of a company&#146;s entire business
or a part of its Cayman land or interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to our ordinary shares becoming quoted in
the United States, we paid this tax on private share transfers.
We have never paid the tax on transfers of our publicly traded
shares. Since 1994, we requested that the Cayman Islands
government exempt us from the share transfer tax. On
April&nbsp;10, 2003, we received notice that the Cayman Islands
government had granted an exemption from taxation for all
transfers of our shares. We believe it is unlikely that
government will seek to collect this tax on transfers of our
publicly traded shares between the period 1994 through
April&nbsp;10, 2003.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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<P align="left">
<B><FONT size="2">Belize Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;21, 2000, we acquired Seatec Belize
Ltd. and subsequently changed the name of the company to Belize
Water Limited. Belize Water Limited, one of our wholly-owned
subsidiaries, provides potable water from our San Pedro reverse
osmosis seawater conversion plant in Ambergris Caye, Belize,
which is located in Central America.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Operations
under the Contract in Belize</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into a contract with Belize Water
Services Limited to supply a minimum of 135,000&nbsp;U.S.
gallons of water per day to Belize Water Services Limited, which
expires in 2011. While we own our production plant in Belize, we
lease the parcel of land on which our plant is located from the
Government of Belize at an annual rent of BZE$1.00. The lease
commenced on April&nbsp;27, 1994 and the term is for
18&nbsp;years. While we own the plant, at the end of the
contract term, Belize Water Services Limited has the option to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">purchase the plant at a price determined by an
    independent appraisal;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extend the contract for a mutually agreed period
    of at least two years, and upon expiration of such extension,
    Belize Water Services Limited may either purchase the production
    plant at a price to be negotiated with us or may again extend
    the agreement for another ten years in exchange for the transfer
    of (50%) of the ownership of the production plant to Belize
    Water Services Limited at the time of the extension for $1.00
    with the transfer of the remaining 50% of the production plant
    at the expiration of the ten-year term for $1.00; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extend the agreement for ten years in exchange
    for the transfer of 50% of the ownership of the production plant
    to Belize Water Services Limited at the time of the extension
    for $1.00 with the transfer of the remaining 50% of the
    production plant at the expiration of the ten-year term for
    $1.00.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">When we originally acquired Belize Water Limited
in July 2000, we were contractually obligated to supply water to
Belize Water and Sewerage Authority, a Belize government
organization. In early 2001, Belize Water Services Limited, a
private company, purchased Belize Water and Sewerage Authority
and assumed our contract with the Belize Water and Sewerage
Authority.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The base price of water supplied, and adjustments
thereto, are determined by the terms of the contract, which
provides for annual 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We bill on a monthly basis based on metered
consumption. Receivables are due within 21&nbsp;days after the
billing date. Interest of 1.5% per month is charged on any
delayed payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, Belize Water Services Limited submitted
claims for compensation for damages that it believed resulted
from our equipment failures during August 2001. They further
claimed for the rectification of a minor mistake in the water
rate inflation adjustment formula in the water supply contract
that was negotiated by the previous management and dates back to
November 1995. We fully settled the claim for compensation that
resulted from an equipment failure during the first week of
August 2001 and also fully settled Belize Water Services
Limited&#146;s claim for rectification of the inflation
adjustment formula. 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Belize Water Services Limited distributes our
water primarily to residential properties, small hotels, and
businesses that serve the tourist market.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand for Water
in Belize</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have operated our plant in Belize since July
2000. We believe that water sales in Belize are less cyclical,
but on a similar cycle to sales in the Cayman Islands. Although
both operations cater to similar tourist markets, Belize has a
greater proportion of residents to tourists. Sales were limited
before March 2000 because the production capacity of the water
plant was lower than demand and the 21% increase in the
</FONT>

<P align="center"><FONT size="2">47
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">number of U.S. gallons supplied in 2001 over 2000
could be expected. Demand does, however, continue to grow as is
evidenced by the 20% increase in the number of U.S. gallons
supplied in 2002 over 2001.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our sales in Belize were restricted in August and
September 2001 because of several equipment failures at our
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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The total volume of water that we supplied to
Belize Water Services Limited for the three years ended
December&nbsp;31, 2002, 2001 and 2000 (as per the previous
owners of the company prior to July 2000) is as follows:
</FONT>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="18%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">(In thousands of U.S. gallons)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">112,537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">93,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our contractual and average sales prices for
1,000 U.S. gallons of water sold to Belize Water Services
Limited for the two years ended December&nbsp;31, 2002 and 2001
are as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average Sales</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Range of Sales</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.06 - $14.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.07</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.04 - $14.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description of
Our San Pedro Plant</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our San Pedro plant is capable of producing
420,000 U.S. gallons per day that is sold under contract to
Belize Water Services Limited, which distributes the water
through its own distribution system to residential, commercial
and tourist properties in Ambergris Caye, Belize. The San Pedro
plant in Ambergis Caye consists of a one-story concrete block
building, which contains two seawater reverse osmosis water
production units.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Electricity to our plants is supplied by Belize
Electricity Limited. At the plant site, we maintain a diesel
driven, standby generator with sufficient capacity to operate
our essential equipment during any temporary interruptions in
the electricity supply.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Government
in Belize and Customs, Duties and Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Belize (formerly British Honduras) is a
constitutional monarchy with the Queen of England as the
constitutional head of state. Belize is an English common law
jurisdiction with a Supreme Court, Court of Appeals and local
Magistrate Courts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Government of Belize has exempted Belize
Water Limited from all duties and stamp taxes until
January&nbsp;28, 2005 and company taxes until January&nbsp;28,
2006. While the Government of Belize confirmed its commitment in
a letter dated June&nbsp;29, 1992 from the Financial Secretary
of Belize 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. We cannot give any assurance that we will be
granted any further tax exemptions after January&nbsp;28, 2006.
</FONT>

<P align="left">
<B><FONT size="2">Bahamas Operations</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Operations
under the Contract in the Bahamas</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2000, we entered into a water supply agreement
with South Bimini International Ltd. pursuant to which on
July&nbsp;11, 2001, we began to provide potable water to the
marina and condominium development,
</FONT>

<P align="center"><FONT size="2">48
</FONT>
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<DIV align="left">
<FONT size="2">Bimini Sands Resort, and to the 40-room Bimini
Beach Hotel. The developer of the Bimini Sands Resort has
developed half of a 150-slip marina and constructed 72
condominium units, and plans to construct an additional 138
condominium units. Under our agreement, South Bimini
International Ltd. is committed to pay for a minimum of 3,000
U.S. gallons of water per customer per month (36,000 U.S.
gallons per customer per year) on a take or pay basis in
relation to the Bimini Sands Resort. The price of water supplied
is adjusted for inflation annually based on Bahamian and U.S.
government indices, and adjusted monthly for changes in the cost
of electricity.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our water supply agreement with South Bimini
International will expire upon the earlier of 2010 or, at the
option of South Bimini International, four months after the
second consecutive calendar month in which we supplied an
average of 40,000 U.S. gallons per day. If the water supply
agreement expires in 2010, South Bimini International has the
option of renewing the agreement for another ten-year term. In
the absence of a new agreement, we must remove all of our
property and equipment from the plant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our contractual and average sales prices for
1,000 U.S. gallons of water sold to South Bimini International
for the two years ended December&nbsp;31, 2002 and 2001 are as
follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Contractual</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average Sales</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Range of Sales</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices per 1,000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">U.S. Gallons</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.66 - $26.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.66 - $26.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect to complete our agreement to acquire a
controlling interest in Waterfields and to continue selling
desalinated seawater on a take or pay basis to the Water &#38;
Sewerage Corporation of the Government of the Bahamas under a
long-term build, own and operate supply agreement. These
transactions are subject to government approval, which we expect
to receive by May&nbsp;31, 2003. The variable elements for
direct and indirect costs are changed each year based on a
variety of local and internationally published cost and price
indices.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand for Water
in the Bahamas</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been supplying water in Bimini since July
2001 to the Bimini Sands Resort and the Bimini Beach Hotel. 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 fishing 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The total volume of water we supplied to South
Bimini International during the year ended December&nbsp;31,
2002 and the six months ended December&nbsp;31, 2001 is as
follows:
</FONT>

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Six Months Ended</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(in thousands of U.S. gallons)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,484</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Recently, we began supplying water to the Water
&#38; Sewerage Corporation of the Government of the Bahamas
through our seawater conversion plant in New Providence as a
result of our acquisition of a management and engineering
services agreement with Waterfields. New Providence island does
not have sufficient potable water production capacity to meet
demand. Approximately 54% or 6&nbsp;million U.S. gallons of
potable water per day consumed in New Providence is transported
by the Bahamian government by barge from Andros Island, which
lies approximately 35&nbsp;miles west of New Providence. The
average cost of barged water is higher than the average cost of
water sold by Waterfields. In 2002, the Waterfields&#146; plant
sold 845&nbsp;million U.S. gallons of potable water to the
Water&nbsp;&#38; Sewerage Corporation.
</FONT>

<P align="center"><FONT size="2">49
</FONT>
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<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Description of
Our Bimini Plant in the Bahamas</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own our Bahamas water production facility in
South Bimini, Bahamas. The plant consists of two 40&nbsp;foot
long standard refrigerated shipping containers, which contain a
seawater reverse osmosis water production plant with a rated
capacity of 115,000 U.S. gallons per day, a 250,000 U.S. 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Electricity to our plants is supplied by Bahamas
Electricity Corporation. At the Bimini 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.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">New Providence Plant Acquired as a Result of
    Our Recent Waterfields Acquisition</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we purchased all of the
shares of DesalCo and as a result, we assumed control of the
1,911 shares or 12.7% of the shares of Waterfields owned by
DesalCo. By May&nbsp;31, 2003 or a later date agreed to by the
parties, we expect to purchase an additional 2,025 shares or
13.5% of the shares of Waterfields for approximately
$1.4&nbsp;million. Taken together, we will have acquired
approximately 26.2% of the shares of Waterfields. We also expect
to complete our agreement to acquire an additional 64.7% of the
remaining shares of Waterfields for an aggregate purchase price
of approximately $6.7&nbsp;million through a tender offer
conducted outside the United States to the remaining
shareholders of Waterfields. These transactions are subject to
government approval which we expect to receive by May&nbsp;31,
2003. As a result, we will own 90.9% of the shares of
Waterfields. While we may not own all of the outstanding shares
of Waterfields, we will control the right to appoint all of the
directors of its Board of Directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Waterfields owns its production and distribution
plant in Nassau, the Bahamas, which is located on property owned
by the Water&nbsp;&#38; Sewerage Corporation of the Government
of the Bahamas. Under the terms of a water supply agreement with
Water&nbsp;&#38; Sewerage Corporation, Waterfields supplies
approximately 2.6&nbsp;million U.S. gallons of desalinated water
per day or approximately 16.8&nbsp;million U.S. gallons per week
to the Water &#38; Sewerage Corporation from the plant. The
Water &#38; Sewerage Corporation distributes the water to its
customers by pipeline. The water supply agreement expires on the
later of December&nbsp;4, 2012 or after the plant has produced
approximately 13.1&nbsp;billion U.S. gallons of water. At the
conclusion of the initial term of the water supply agreement,
the Water&nbsp;&#38; Sewerage Corporation has the following
options:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">extend the term of the agreement for an
    additional five years at a reduced rate to be negotiated by the
    parties;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">exercise a right of first refusal to purchase any
    materials, equipment or facilities that Waterfields intends to
    remove from the plant and negotiate a purchase price with
    Waterfields; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">require Waterfields to remove all materials,
    equipment or facilities from the plant.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On September&nbsp;20, 2001, the Water&nbsp;&#38;
Sewerage Corporation reduced the required plant production level
from approximately 16.8&nbsp;million U.S. gallons per week to
approximately 13.4&nbsp;million U.S. gallons per week. This
temporary reduction continues until June&nbsp;30, 2003. If
Waterfields fails to meet this threshold, it must pay an amount
equal to the number of U.S. thousand gallons that it is under
the threshold multiplied by the current price of water. For the
period from July&nbsp;1, 2003 to December&nbsp;31, 2003, the
plant will be required to produce 15.1&nbsp;million U.S. gallons
per week to avoid penalties. From January&nbsp;1, 2004, the
plant will be required to produce 16.8&nbsp;million U.S. gallons
to avoid penalties. In January 2002, Waterfields incurred
penalties for production shortfalls of $11,960.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The plant was engineered and constructed by
DesalCo and consists of four identical seawater reverse osmosis
desalination production units and one brackish water reverse
osmosis desalination production unit. All of the units utilize
high-pressure pumps driven by Caterpillar diesel engines.
Electricity is purchased from the
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<DIV align="left">
<FONT size="2">Bahamas Electricity Corporation to power
ancillary equipment and building lighting. The plant is equipped
with a stand-by diesel powered generator that is capable of
powering all equipment normally powered by the Bahamas
Electricity Corporation.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Waterfields is currently managed by Bacardi and
DesalCo pursuant to separate management and engineering services
agreements, which provide monthly fees of approximately $15,000
to each of Bacardi and DesalCo. As a result of the anticipated
transaction with Bacardi, we will be assigned Bacardi&#146;s
rights under the management services agreement with Waterfields.
Under these management and engineering services agreements, we
will have the right to provide the Managing Director for
Waterfields as well high level management support including,
accounting, personnel support and corporate management. DesalCo
provides a Director of Operations, who is responsible for the
operation and maintenance of the plant. DesalCo also purchases
various parts and materials for the plant at specified markup of
10% and provides design services for plant modifications at a
rate of 4.69% of the projected cost.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Royal Bank of Canada and Waterfields currently
provide a performance bond in favor of the Water and Sewerage
Corporation, which is renewed annually, in the amount equal to
50% of the guaranteed annual sales to the Water and Sewerage
Corporation. Bacardi and DesalCo also provided a joint and
several guarantee of Waterfields&#146; performance under the
water supply agreement. We intend to ask the Water and Sewerage
Corporation to replace this guarantee with a new guarantee given
by us.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Government
in the Bahamas and Customs, Duties and Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Commonwealth of the Bahamas is a
constitutional parliamentary democracy with the Queen of England
as the constitutional head of state. The basis of Bahamian law
and legal system is the English common law tradition with a
Supreme Court, Court of Appeals, and a Magistrate court.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have not been granted any tax exemptions for
our Bahamian operations. We did not pay any tax to the Bahamian
government during 2001 or 2002, other than National Insurance
Board tax on our employees. We calculate our potential tax
liability based on our 2001 and 2002 sales to be less than
$2,000.
</FONT>

<P align="left">
<B><FONT size="2">British Virgin Islands Operations</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ocean Conversion
(BVI)&nbsp;Ltd. Acquisition</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we began operations in
the British Virgin Islands when we purchased 50% of the issued
and outstanding voting stock and certain profit sharing rights
relating to Ocean Conversion (BVI), and all of the voting stock
and certain profit sharing rights relating to Ocean Conversion
(Cayman) for approximately $14.1&nbsp;million and the issuance
of 185,714 of our ordinary shares. As a result of acquisition of
DesalCo, we also acquired control over all of the non-voting
shares of Ocean Conversion (BVI) owned by DesalCo. Ocean
Conversion (BVI) supplies desalinated water produced from its
Baughers Bay desalination plant in Tortola, British Virgin
Islands, to the British Virgin Islands Water and Sewerage
Department pursuant to the terms of a water supply agreement
between Ocean Conversion (BVI) and the British Virgin Islands
government.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the completion of the Ocean Conversion
(BVI) transaction, Ocean Conversion (BVI)&nbsp;had a profit
sharing agreement under which North American Mortgage&nbsp;&#38;
Finance Company Ltd. and Edmund Gibbons Limited, who sold their
interests to us, received profit sharing payments equal to
247,500 multiplied by the dividend per share paid to other
shareholders of Ocean Conversion (BVI). Sage Water Holdings
(BVI)&nbsp;Ltd., the remaining shareholder, received profit
sharing payments equal to 202,500 multiplied by the dividend per
share paid to the other shareholders of Ocean Conversion (BVI).
We surrendered 18.2% of our profit sharing rights to Ocean
Conversion (BVI) in return for the issuance to DesalCo, of
45,000 non-voting shares by Ocean Conversion (BVI). DesalCo has
agreed to sell these shares of non-voting stock and all of the
shares of non-voting stock it presently owns to Sage Water
Holdings for approximately $2.1&nbsp;million in cash. We expect
to complete this transaction by May&nbsp;31, 2003, unless the
parties agree to extend the closing date. Following completion
of this sale, we will share control of the voting stock and the
profit sharing rights of
</FONT>

<P align="center"><FONT size="2">51
</FONT>
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<DIV align="left">
<FONT size="2">Ocean Conversion (BVI) equally with the remaining
shareholder, Sage Water Holdings, which will own all of the
shares of non-voting stock of Ocean Conversion (BVI).
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (BVI)&#146;s Baughers Bay plant
currently has a capacity of 1.2&nbsp;million U.S. gallons per
day, although a current expansion project will enable the plant
to produce up to 1.6&nbsp;million U.S. gallons per day. The
Baughers Bay plant is a dual-train seawater reverse osmosis
plant with an advanced energy recovery system. Ocean Conversion
(BVI) generates its own electrical power on site using a large
Caterpillar diesel driven generator unit. Ocean Conversion (BVI)
also purchases electricity from the BVI Electric Co. to power
ancillary equipment and provide building lighting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (BVI) believes that the current
water supply agreement with the British Virgin Islands
government was automatically extended on May&nbsp;31, 1999 to
May&nbsp;31, 2006 when the British Virgin Islands government did
not make a buyout payment to Ocean Conversion (BVI) as required
under the agreement. The British Virgin Islands government,
however, has taken the position, that the agreement is in force
on a month-to-month basis and the parties are currently
negotiating to extend the contract for 15&nbsp;years at a lower
cost to the British Virgin Islands Water and Sewerage Department.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo provides a Vice President and Chief
Executive Officer as well as other management and engineering
services to Ocean Conversion (BVI) in the form of accounting
services, personnel management and plant management for a
monthly fee of $16,639. DesalCo also receives a bonus of 4% of
the annual net operating income of Ocean Conversion (BVI).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2003, Ocean Conversion (BVI) subscribed for
1,500 shares of JVD Ocean Desalination Ltd., representing 60% of
the outstanding shares. Ocean Conversion (BVI) supplied JVD
Ocean Desalination Ltd. with a seawater reverse osmosis
desalination plant capable of producing 20,000 U.S. gallons per
day to supply water to the island of Jost Van Dyke. DesalCo
operates the plant on behalf of JVD Ocean Desalination Ltd.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the Articles of Association of Ocean
Conversion (BVI), we are able to appoint three of the six
directors of the company. Sage Water Holdings, which owns the
remaining 50% of the issued and outstanding voting shares, is
entitled to appoint the remaining three directors. If there is a
tied vote on any matter, the President of the Caribbean Water
and Wastewater Association will be entitled to appoint a
temporary director to break the tie.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">The Government in the British Virgin Islands
    and Customs, Duties and Taxes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The British Virgin Islands is an Overseas
Territory of the United Kingdom and a constitutional democracy.
The British Virgin Islands are an English common law
jurisdiction with a Supreme Court, Court of Appeals and
Magistrates Court.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The British Virgin Islands imposes a corporate
income tax at a rate of 15% of net income. Ocean Conversion
(BVI) receives an exemption under the water supply agreement
with the British Virgin Islands government from all taxes and
from duties, levies and impositions on items which it imports
for the Baughers Bay plant.
</FONT>

<P align="left">
<B><FONT size="2">Barbados Operations</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent DesalCo
Acquisition</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, we acquired all of the
stock of DesalCo for approximately $11.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the management and engineering
services that DesalCo provides to Ocean Conversion (Cayman),
Ocean Conversion (BVI) and Waterfields, DesalCo also owns all of
the issued and outstanding stock of DesalCo (Barbados) Ltd., a
Barbados company, which operates a desalination plant for Sandy
Lane Properties Ltd. in St. James, Barbados. As a result of our
acquisition of DesalCo, we acquired DesalCo (Barbados).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of an operating agreement with
Sandy Lane Properties Ltd., DesalCo operates a seawater
desalination plant, which provides irrigation water for several
golf courses on the Sandy Lane Resort
</FONT>

<P align="center"><FONT size="2">52
</FONT>

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<DIV align="left">
<FONT size="2">in St. James, Barbados. The plant and property
are owned by Sandy Lane Properties Ltd. and DesalCo operates the
plant under the terms of a five-year operating agreement, which
expires in December 2006. Sandy Lane Properties Ltd. has the
option to cancel the operating agreement with three months prior
notice to DesalCo, subject to certain penalties for early
termination of the operating agreement. The operating agreement
was assigned to DesalCo (Barbados) in January 2001 and DesalCo
(Barbados) pays a monthly assignment fee to DesalCo equal to
8.0% of the gross revenue received under the operating
agreement. DesalCo also provides certain engineering services
and pays a portion of the plant manager&#146;s salary in
exchange for a management fee of approximately $14,000 per month
and reimbursement of its expenses from Sandy Lane.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Government
in Barbados and Customs, Duties and Taxes</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Barbados is an independent island nation and a
member of the British Commonwealth. Barbados is an English
common law jurisdiction with a Supreme Court.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The net income of DesalCo (Barbados) is subject
to a 40% Barbados corporate tax, and all dividend payments and
non-tax treaty supplier payments are subject to a Barbados
withholding tax of 15%. All customs duties due on parts and
equipment for the plant and value added taxes are paid by Sandy
Lane Properties Ltd.
</FONT>

<P align="left">
<B><FONT size="2">Reverse Osmosis Technology</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion of saltwater to potable water is
called desalination. There are two primary forms of
desalination: distillation and reverse osmosis. Both methods are
used throughout the world and technologies are improving to
lower the costs of production. Reverse osmosis 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 saline (or feed) water for pretreatment, which
consists of fine filtration and 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
actually 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We use reverse osmosis 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
more efficient processes to convert seawater to potable water.
We believe that 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, DesalCo is the exclusive distributor
in the Caribbean basin for the DWEER<SUP>TM</SUP> Energy
Recovery System produced by DWEER<SUP>TM</SUP> Technology Ltd.
for use in reverse osmosis seawater desalination plants through
2009. An advanced energy recovery system, the DWEER<SUP>TM</SUP>
System is utilized to efficiently recover energy from the
high-pressure brine that is the by-product of the reverse
osmosis desalination process. Unlike pump/turbine systems used
in many desalination plants around the world, the
DWEER<SUP>TM</SUP> System recovers approximately 95% of the
energy used to pressurize the salinated (or feed) water after
pretreatment. As a result, the DWEER<SUP>TM</SUP> System for
reverse osmosis seawater desalination plants is one of the most
energy efficient systems of its kind. The DWEER<SUP>TM</SUP>
System is used on all desalination plants that DesalCo has
designed and operated.
</FONT>

<P align="center"><FONT size="2">53
</FONT>

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<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not compete with other utilities within our
licensed area in the Cayman Islands. 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On Ambergris Caye, in Belize, our water supply
contract with Belize Water Services Limited is non-exclusive,
and Belize Water Services Limited 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 which provide desalination equipment and turnkey water
supply contracts, including Ionics Inc. and Vivendi. We expect
to compete with these companies and others for any future
contracts in Belize.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On South Bimini Island in the Bahamas, we supply
water to a private developer and do not have competitors. Aqua
Design (an Ionics company) operates a seawater desalination
plant on North Bimini Island. We can expect that Aqua Design and
Vivendi will compete with us for future water supply agreements
with the Bahamian government on New Providence, Bahamas
following our acquisition of Waterfields.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Aqua Design (an Ionics company) operates seawater
desalination plants in West End, Tortola and on Virgin Gorda in
the British Virgin Islands and generally bids against Ocean
Conversion (BVI) for projects. There are currently water
shortages in certain areas of Tortola, particularly on the
eastern end of the island, and we believe that additional
desalination plants will be required to alleviate these
shortages. Ocean Conversion (BVI) is currently examining the
feasibility of constructing a seawater desalination plant in
East End, Tortola and has purchased a small plant for
installation in Jost Van Dyke, a small island northwest of
Tortola.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo (Barbados) operates a seawater
desalination plant which provides irrigation water for several
golf courses on the Sandy Lane Resort in St. James, Barbados.
Ionics Inc. competed with us for this operating agreement. We
can expect that Ionics and other companies of comparable size
and financial resources will compete with us for future
agreements with the Sandy Lane Resort as well as any other
agreements which we may seek in Barbados.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 us. We believe that our exclusive rights in the
Caribbean basin to DWEER&#153; technology through 2009, 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 a competitive
advantage on projects, ranging in size up to 5&nbsp;million U.S.
gallons per day, in the Caribbean basin and surrounding areas.
</FONT>

<P align="left">
<B><FONT size="2">Government Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the Cayman Islands, we are regulated by the
Water Authority-Cayman on behalf of the Cayman Islands
government and believe that our operations comply with all local
laws and regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 Belize Water Services Limited. 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 Belize Water Services Limited. 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 Water Industry Act 2001. 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 Water Industry Act 2001 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
</FONT>

<P align="center"><FONT size="2">54
</FONT>

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<DIV align="left">
<FONT size="2">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.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our operations in the Bahamas,
the British Virgin Islands and Barbados comply with all local
laws and regulations, and we are currently reviewing our
Bahamian tax status as previously disclosed.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the recent acquisitions, we employed a
total of 41 persons. As a result of our recent acquisitions, we
now employ 75&nbsp;persons. We employ 50&nbsp;persons in the
Cayman Islands, eight of whom are executive and management
personnel. Ten employees are engaged in administrative and
clerical positions. The remaining staff is engaged in
engineering, plant maintenance and operations, pipe laying and
repair, leak detection, new customer connections, meter reading
and laboratory analysis of water quality. Currently, we employ
six&nbsp;persons in Belize to manage and operate our plant.
Waterfields presently employs eight persons to operate the plant
on New Providence, Bahamas. We directly employ one person in the
Bahamas to manage and operate our water plant and distribution
system on South Bimini. We presently employ five persons in
Barbados to operate the water plant for Sandy Lane Properties.
We presently employ six persons in Bermuda and will relocate
three of them to the Cayman Islands. The remaining three
employees in Bermuda will be made redundant and will be
terminated. Currently, we manage the five employees of Ocean
Conversion (BVI) in the British Virgin Islands. None of our
employees is a party to a collective bargaining agreement. We
consider our relationship with our employees to be good.
</FONT>

<P align="left">
<B><FONT size="2">Legal Proceedings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not currently a party to any legal
proceeding.
</FONT>

<P align="center"><FONT size="2">55
</FONT>

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<P align="left">


<!-- link1 "MANAGEMENT" -->
<DIV align="left"><A NAME="013"></A></DIV>

<DIV align="center">
<B><FONT size="2">MANAGEMENT</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Our Directors And Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jeffrey M. Parker
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board of Directors and Chief
    Executive Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frederick W. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, President, Chief Operating Officer and
    Chief Financial Officer
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">*Kenneth R. Crowley
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Overseas Operations
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gregory S. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Operations (Cayman Islands)
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">*Robert B. Morrison
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Purchasing and Information
    Technology
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">*Gerard Pereira
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Engineering
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peter D. Ribbins
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, Director&nbsp;&#151; Special Projects
    and Company Secretary
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">*Brent Santha
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Finance and Assistant Company
    Secretary
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">*William T. Andrews
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">J. Bruce Bugg, Jr.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice Chairman of the Board of Directors
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Brian E. Butler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven A. Carr
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Carson J. Ebanks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Richard L. Finlay
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Clarence B. Flowers, Jr.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wilmer Pergande
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Raymond Whittaker
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We have appointed these persons to the indicated
    positions without obtaining the prior approval of the Cayman
    Islands government, as required under our license. As a
    consequence, we are in technical breach of the terms of our
    license. Our license requires the Cayman Islands government to
    give us notice of and an opportunity to cure this breach. We
    believe we could remedy this breach by transferring our license
    to our wholly-owned subsidiary, Cayman Water Company Limited,
    which transfer has been approved by the Cayman Islands
    government. It is anticipated that this transfer will be
    effected in any event by no later than July&nbsp;1, 2003.
    Following the completion of the transfer, no regulatory
    approvals will be necessary in connection with the appointment
    of our executive officers and directors, and we will no longer
    be in technical breach of our license.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Jeffrey M. Parker
</FONT></I><FONT size="2">has been one of our directors 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.&nbsp;Parker is
a Chartered Accountant and practices at Moore Stephens (Cayman
Islands) Ltd. in the Cayman Islands, a member of Moore Stephens
International Ltd. From 1993 to 1995, Mr.&nbsp;Parker served as
a director of The International Desalination Association
representing the Caribbean&nbsp;&#38; Latin America.
Mr.&nbsp;Parker received his ACA designation as a chartered
accountant in England and Wales in 1967, and his FCA designation
in 1977.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Frederick W. McTaggart
</FONT></I><FONT size="2">has been one of our directors 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.&nbsp;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.&nbsp;McTaggart is the brother of Mr.&nbsp;Gregory S.
McTaggart, our Vice President of Operations.
</FONT>

<P align="center"><FONT size="2">56
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Kenneth R. Crowley
</FONT></I><FONT size="2">joined us in February 2003 as the Vice
President of Overseas Operations. From 1998 to 2003,
Mr.&nbsp;Crowley served as Operations Manager at DesalCo working
to design, build and operate reverse osmosis plants with work
exchanger energy recovery systems in the Cayman Islands,
Bahamas, Barbados and British Virgin Islands. Prior to joining
DesalCo, Mr.&nbsp;Crowley served as Operations Manager for Ocean
Conversion (Cayman) where he was responsible for overseeing the
operations and expansions of existing plants and the
construction of a new plant. Mr.&nbsp;Crowley started in the
desalination industry as an Operations Engineer for Reliable
Water Company in 1989. He holds a Bachelor of Science degree in
Mechanical Engineering from the University of Maryland.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gregory S. McTaggart
</FONT></I><FONT size="2">is our Vice President of Operations
(Cayman Islands). Mr.&nbsp;McTaggart joined us in January 1991
as our resident engineer and has served in his current capacity
since 1994. For three years before joining us,
Mr.&nbsp;McTaggart worked for the Caribbean Utilities Company as
a mechanical engineer. Mr.&nbsp;McTaggart obtained his B.S.
degree in Mechanical Engineering from the Georgia Institute of
Technology in 1986. Mr.&nbsp;McTaggart is the brother of
Frederick W. McTaggart, the President, Chief Operating Officer,
Chief Financial Officer and director.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Robert B. Morrison
</FONT></I><FONT size="2">joined us as Vice President of
Purchasing and Information Technology in March, 2003. From 1996
until joining us, Mr.&nbsp;Morrison served as Purchasing Manager
at DesalCo Prior to DesalCo, Mr.&nbsp;Morrison was Principal
Purchasing Officer for Bermuda Government, Ministry of Works and
Engineering, and Purchasing Manager for American-Standard in
Toronto, Canada. He is co-founder and Past President of the
Purchasing Management Association of Bermuda and Past President
of the Mississauga District of the Purchasing Management
Association of Canada.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gerard Pereira </FONT></I><FONT size="2">was
appointed Vice President of Engineering in March 2003. Since
1998, he has served as Operations Manager of Ocean Conversion
(Cayman) Ltd. From 1995 to 1998, he was an Operations Engineer
for Ocean Conversion (Cayman) Ltd. Mr.&nbsp;Pereira holds B.S.
degrees and M.S. degrees in Chemical Engineering from the
University of Waterloo, Ontario, Canada.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Peter D. Ribbins </FONT></I><FONT size="2">is
our Director-Special Projects and Secretary since 2000 and has
served as a director since 1989. Mr.&nbsp;Ribbins joined us in
1983 as our 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.&nbsp;Ribbins
obtained his B.S. degree in Kinanthropology from the University
of Ottawa, Canada in 1971.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Brent J. Santha
</FONT></I><FONT size="2">became our Vice President of Finance
and Assistant Secretary in January 2003 after serving as our
Management Accountant since January 2001. Prior to joining us,
Mr.&nbsp;Santha was employed by Johnsen Archer Chartered
Accountants from 1994 to 2000. He has been a member of the
Canadian Institute of Chartered Accountants since 1997.
Mr.&nbsp;Santha received his B.A. degree in Accounting from the
University of Regina, Canada in 1993.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">William T. Andrews
</FONT></I><FONT size="2">became one of our directors under the
terms of Share Sale Agreement between DesalCo and us. Since
2002, he has been Managing Director of DWEER Technology Ltd.,
which designs and manufactures patented high efficiency energy
reduction pumping equipment for seawater reverse osmosis
desalination. From 1991 to 2003, Dr.&nbsp;Andrews was the
Managing Director of DesalCo. He was formerly President of
Reliable Water Inc., and Vice President of Polymetrics Inc.,
focusing on seawater reverse osmosis desalination in both cases.
Dr.&nbsp;Andrews attended universities in England, receiving a
bachelor&#146;s degree in Physics from the University of
Newcastle-upon-Tyne, and a doctorate in Atomic Physics at Oxford
University, as a Rhodes Scholar. He is a registered Mechanical
Engineer in California and Bermuda. Since 1976, Dr.&nbsp;Andrews
has continuously been a member of the International Desalination
Association (IDA). He has been a director of IDA since 1995, and
is currently President. He is a member of the European
Desalination Society and the Caribbean Water &#38; Wastewater
Association.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">J.&nbsp;Bruce Bugg, Jr.
</FONT></I><FONT size="2">has been a director and our
Vice-Chairman of the Board since 1998. Mr.&nbsp;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.&nbsp;Bugg served as Vice Chairman of First Southwest Company
and Chairman of its
</FONT>

<P align="center"><FONT size="2">57
</FONT>

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<DIV align="left">
<FONT size="2">Investment Banking Group. Mr.&nbsp;Bugg received
his B.B.A. degree in Business Administration from Southern
Methodist University in 1976 and his J.D. from Southern
Methodist University in 1979.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Brian E. Butler </FONT></I><FONT size="2">has
been one of our directors since 1983. Since 1977,
Mr.&nbsp;Butler has been the principal of Columbus Developments
Ltd., a property development company specializing in luxury
resort projects in the Cayman Islands.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Steven A. Carr </FONT></I><FONT size="2">has
served as one of our directors since May 2000. Since 1994,
Mr.&nbsp;Carr has been the President of Carr &#38; Associates, a
private investment firm located in Bryan, Texas. Before joining
Carr &#38; Associates, Mr.&nbsp;Carr held a variety of executive
positions and participated in the ownership and management of a
number of telecommunications ventures in the United States. From
1998 to 2000, Mr.&nbsp;Carr served as an alternate director on
our board of directors for his father, Hal&nbsp;N. Carr, until
he was elected as one of our directors in May 2000.
Mr.&nbsp;Carr is currently a director of the First National Bank
of Bryan. In addition to his business interests, Mr.&nbsp;Carr
is a senior lecturer at The Mays College Business School at
Texas A&#38;M University and a councilor of the Texas A&#38;M
Research Foundation. Mr.&nbsp;Carr received is B.S. degree in
Social Psychology from Texas A&#38;M University in 1973 and his
M.A. degree in Telecommunication from the University of Texas in
1980.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Carson K. Ebanks
</FONT></I><FONT size="2">became the government nominated
director of our company in May of 2001. Mr.&nbsp;Ebanks was the
Director of Planning for the Cayman Islands from
1991&nbsp;&#151; 1997. Since 1997, he has served the Cayman
Islands Government as a Permanent Secretary currently for the
Ministry of Community Services, Youth, Sports and Gender
Affairs. Mr.&nbsp;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&nbsp;&#151; Peace and
Conflict Studies Minor) from the University of Waterloo and a
Master of Arts&nbsp;&#151; Planning in Community and Regional
Planning from the University of British Columbia. He is a
trustee of the National Gallery of the Cayman Islands.
Mr.&nbsp;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 as the Vice President of the Cayman Islands Olympic
Committee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Richard L. Finlay
</FONT></I><FONT size="2">has served as one of our directors
since 1995. Mr.&nbsp;Finlay is an attorney 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.&nbsp;Finlay was a partner with the Canadian
law firm of Olive, Waller, Zinkhan and Waller. Mr.&nbsp;Finlay
has served as the Cayman Islands&#146; representative to the
International Company and Commercial Law Review and is a former
editor of the Cayman Islands Law Bulletin.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Clarence B. Flowers, Jr.
</FONT></I><FONT size="2">has been one of our directors since
1991. Mr.&nbsp;Flowers is, and has been since 1985, the
principal of Orchid Development Company, a real estate developer
in the Cayman Islands. Mr.&nbsp;Flowers also serves as a
director of C.L.&nbsp;Flowers&nbsp;&#38; Son, which manufactures
wall systems in the Cayman Islands, and Cayman National Bank, a
retail bank.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Wilmer Pergande </FONT></I><FONT size="2">has
been one of our directors since 1978. Mr.&nbsp;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.&nbsp;Pergande was the Chief Executive Officer of
Licon International, Inc., a publicly traded manufacturer of
liquid processing equipment. Previously, Mr.&nbsp;Pergande held
several executive positions with Mechanical Equipment Company,
Inc., a manufacturer of seawater conversion equipment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Raymond Whittaker
</FONT></I><FONT size="2">has served as one of our directors
since 1988. Mr.&nbsp;Whittaker was the Managing Director of
TransOcean Bank&nbsp;&#38; 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 October 1984 to December 2000. He is now the
principal of his own company and management firm.
</FONT>

<P align="center"><FONT size="2">58
</FONT>
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<P align="left">
<B><FONT size="2">Composition of the Board of
Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Group 1</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Group 2</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Group 3</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">William T. Andrews<BR>
    J. Bruce Bugg, Jr.<BR>
    Brian E. Butler<BR>
    Steven A. Carr
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Carson K. Ebanks<BR>
    Richard L. Finlay<BR>
    Clarence B. Flowers, Jr.<BR>
    Frederick W. McTaggart<BR>
    Jeffrey M. Parker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Wilmer Pergande<BR>
    Peter D. Ribbins<BR>
    Raymond Whittaker
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The directors in Group 2 were re-elected at our
annual shareholders&#146; meeting in May 2002. Those directors
in Group&nbsp;3 will be proposed for re-election in 2003,
Group&nbsp;1 in 2004 and then Group&nbsp;2 again in 2005.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 2002, Carson&nbsp;K. Ebanks was
elected as the government&#146;s nominee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the Share Sale Agreement
between DesalCo and us under which we acquired all of the stock
of DesalCo on February&nbsp;7, 2003, we appointed
Dr.&nbsp;William&nbsp;T. Andrews to our board of directors as a
director in Group&nbsp;1.
</FONT>

<P align="left">
<B><FONT size="2">Committees of the Board of Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors has established the
following committees:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="19%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Nominations</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Executive Committee</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Audit Committee</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Compensation Committee</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Committee</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Fredrick W. McTaggart*<BR>
    J. Bruce Bugg, Jr.<BR>
    Richard L. Finlay<BR>
    Clarence B. Flowers, Jr.<BR>
    Jeffrey M. Parker<BR>
    Peter D. Ribbins<BR>
    Raymond Whittaker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Brian E. Butler*<BR>
    Steven A. Carr<BR>
    Raymond Whittaker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Raymond Whittaker*<BR>
    Richard L. Finlay<BR>
    Clarence B. Flowers, Jr.<BR>
    Wilmer Pergande
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Wilmer Pergande*<BR>
    J. Bruce Bugg, Jr.<BR>
    Steven A. Carr<BR>
    Richard L. Finlay
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<P align="left">
<FONT size="2">*&nbsp;Chairman
</FONT>

<P align="center"><FONT size="2">59
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">Summary Compensation Table</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="14" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Long Term Compensation</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="14" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Securities</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Salary</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Bonus</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Underlying</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jeffrey M. Parker
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">94,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">143,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">26,294</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman and Chief Executive
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">95,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">86,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">28,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">95,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">39,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">26,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="26"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frederick W. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">116,400</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, President, Chief
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">118,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">88,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">28,533</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operating Officer and Chief
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">118,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">66,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">26,427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Financial Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="26"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peter D. Ribbins
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">121,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">80,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, Director&nbsp;&#150; Special
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">118,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">27,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Projects
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">118,006</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="26"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gregory S. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">83,248</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">17,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">20,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">85,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">20,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">(Cayman Islands)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">85,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">19,325</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Frederick McTaggart joined us in October 2000.
The salary shown in 2000 for Frederick McTaggart is annualized
based upon a full year of employment for comparative purposes.
Frederick McTaggart&#146;s actual salary for 2000 was $24,772.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The other annual compensation granted to Gregory
McTaggart in 2000 is comprised of redeemable preferred shares
issued to him 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
Gregory McTaggart in 2000 had a market price of $5.47&nbsp;per
share on the date of grant. As a result of entering into an
employment agreement in 2000, Gregory McTaggart is no longer
eligible to participate in our share incentive plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All options granted to Jeffrey Parker, Frederick
McTaggart, Peter Ribbins and Gregory McTaggart in 2000, 2001 and
2002 have exercise prices of $7.10, $10.84 and $11.93&nbsp;per
share, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Stock Option Grants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 in fiscal year 2002:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="24%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Potential Realizable Value</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">at Assumed Annual Rates</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">of Stock Price Appreciation</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">for Option Term</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">% of Total</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">At 0%</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">At 5%</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">At 10%</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options Granted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise or</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Annual Growth</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Annual Growth</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Annual Growth</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">To Employees</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Base Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Expiration</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Rate</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Rate</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Rate</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">in Fiscal Year</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($/Sh)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Date</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Jeffrey M. Parker
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,159</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11.93</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">03/18/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">73,507</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">135,464</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">197,422</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Frederick W. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,427</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11.93</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">03/18/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">74,260</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">136,852</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">199,444</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Peter D. Ribbins
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25,767</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">23</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11.93</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">03/18/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">72,405</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">133,434</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">194,463</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gregory S. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,325</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">17</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11.93</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">03/18/06</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">54,303</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">100,074</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">145,846</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The market value of these options on the grant
date (December&nbsp;31, 2002) was $14.74.
</FONT>

<P align="center"><FONT size="2">60
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Stock Option Holdings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 2002:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Value of Unexercised</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Number of Securities</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">In-The-Money Options</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Underlying Unexercised</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">at Fiscal Year End</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Acquired</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Value</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">on Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Realized</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercisable</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Unexercisable</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(#)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jeffrey M. Parker
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,590</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frederick W. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Peter D. Ribbins
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">223,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gregory S. McTaggart
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,193</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Incentive Compensation</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Share
Incentive Plan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since April&nbsp;8, 1987, we have maintained an
employee share incentive plan for our long-term employees who
are not directors. This plan was amended in 2000 to exclude
officers as participants under the plan. 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
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 us, we, 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 that the employee
originally paid for the shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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&#146;s
salary and the total dividend paid to ordinary shareholders as a
percentage of the total shareholder&#146;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&#146;s employment with us or any of our
affiliates terminates by reason of the employee&#146;s death,
permanent disability or the employee reaches the age of
65&nbsp;years. However, if an employee&#146;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&#146;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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 shareholders&#146; meeting. This option
expires, unless exercised by the employee, within 40&nbsp;days
after the date of our annual shareholders&#146; meeting. Since
we adopted the employee share incentive plan, our employees have
acquired 124,360&nbsp;redeemable preferred shares, of which
104,620 have been redeemed for an equal number of ordinary
shares.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Share
Option Plan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2001, we established an employee share option
plan for certain long-term employees who participate in the
employee 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
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<DIV align="left">
<FONT size="2">each calendar year, as long as the employee is a
participant in the employee share incentive plan, options to
purchase ordinary shares. The price at which the option may be
exercised will be the closing market price on the grant date,
which is 40&nbsp;days after the date of our annual
shareholders&#146; meeting. The number of options each employee
is granted is equal to five times the sum of (i)&nbsp;the number
of redeemable preferred stock which that employee receives at no
cost and (ii)&nbsp;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.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since we adopted the employee share option plan,
we have granted 22,605 options to purchase ordinary shares at an
exercise price of $9.20 with an expiration date of
August&nbsp;4, 2005 and 13,695 options to purchase ordinary
shares at an exercise price of $14.69 with an expiration date of
July&nbsp;30, 2006.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Executive
Directors&#146; Share Plan</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1999, we implemented a non-executive
directors&#146; share grant plan for our directors who are not
executive officers or serving as the Cayman Islands&#146;
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 closing market price
on October&nbsp;1st (or the next trading day if October&nbsp;1st
falls on a non-trading day) of the preceding year to determine
the number of shares to be granted for the current year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the non-executive directors&#146;
share plan, the directors, as a group, as of December&nbsp;31,
2002, are entitled to receive 2,748 ordinary shares (based upon
the prevailing market price for the ordinary shares on
October&nbsp;1, 2001).
</FONT>

<P align="left">
<B><FONT size="2">Employment Agreements and Related
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into a three-year employment agreement
with Jeffrey M. Parker, our Chairman of the board of directors
and Chief Executive Officer. This agreement, as amended, was
originally scheduled to expire on December&nbsp;31, 2001,
however, it extends automatically each year for an additional
one-year term. Mr.&nbsp;Parker devotes at least 75% of his
working time to us and the remainder of his working time to his
accountancy practice. If we terminate Mr.&nbsp;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.&nbsp;Parker is terminated
automatically vest and become fully exercisable. Under the terms
of his employment agreement, Mr.&nbsp;Parker is granted an
option to purchase that number of ordinary shares which equals
1% of our net profit for the year in which the grant occurs. The
exercise price of the options to be granted is 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&nbsp;31, 2002,
Mr.&nbsp;Parker was granted an option to purchase
26,159&nbsp;ordinary shares at an exercise price of
$11.93&nbsp;per share. All options granted to Mr.&nbsp;Parker
after March 1999 expire on the third anniversary of the date of
the auditor&#146;s report on the financial statements for the
year of the grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of his employment agreement,
Mr.&nbsp;Parker is entitled to receive an annual bonus for each
completed financial year during which he serves in the
capacities of Chairman and Chief Executive Officer. The amount
of the bonus consists of the following two amounts:
(a)&nbsp;1.5% of our net profits for that financial year, before
charging this bonus, dividends, or crediting any amounts arising
from the re-valuation of our assets and (b)&nbsp;15% of the
amount by which our net profits for that financial year
(calculated in the same manner as in (a)&nbsp;above) exceed the
highest annual net profits earned by us in any prior financial
year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to serving as our Chairman of the
Board and Chief Executive Officer, Mr.&nbsp;Parker owns an
accountancy practice in the Cayman Islands. Until 1999, we paid
the accountancy practice for services rendered to us by
Mr.&nbsp;Parker through his practice. In 1999, we began paying
Mr.&nbsp;Parker directly for his services. During 2001, his
accounting practice provided us professional services for which
we paid $4,523. In
</FONT>

<P align="center"><FONT size="2">62
</FONT>

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<DIV align="left">
<FONT size="2">addition, we reimbursed his accounting practice
$1,355 in 2001 and $416 in 2002 for communication charges made
on our behalf.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into a three-year employment agreement
with Frederick W. McTaggart, our President, Chief Operating
Officer and Chief Financial Officer. This agreement, as amended,
was originally scheduled to expire on October&nbsp;16, 2003,
although it extends automatically each year for an additional
one-year term. If we terminate Mr.&nbsp;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.&nbsp;Frederick McTaggart is
terminated automatically vest and become fully exercisable.
Pursuant to his agreement, Mr.&nbsp;Frederick McTaggart is
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&nbsp;31, 2002,
Mr.&nbsp;Frederick McTaggart was granted an option to purchase
26,427 ordinary shares at an exercise price of $11.93 per share.
All options granted to Mr.&nbsp;Frederick McTaggart expire on
the third anniversary of the date of the auditor&#146;s report
on the financial statements for the year of grant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of his employment agreement,
Mr.&nbsp;Frederick McTaggart is entitled to receive an annual
bonus for each completed financial year during which he serves
in the capacities of President and Chief Operating Officer. The
bonus consists of the following two amounts: (a)&nbsp;2.5% of
our net profits for that financial year, before charging this
bonus, dividends or crediting any amounts arising from the
re-valuation of our assets and (b)&nbsp;5% of the amount by
which our net profits for that financial year (calculated in the
same manner as in (a)&nbsp;above) exceed the highest annual net
profits earned by us in any prior financial year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into an employment agreement with
Peter D. Ribbins, our former President and Chief Operating
Officer and currently Director&nbsp;&#151; Special Projects. The
agreement fixes the salary of Mr.&nbsp;Ribbins until
October&nbsp;31, 2003 and thereafter it will be determined by
mutual consent. Until October&nbsp;31, 2003, Mr.&nbsp;Ribbins
will 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
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&nbsp;31, 2002,
Mr.&nbsp;Ribbins was granted an option to purchase
25,767&nbsp;ordinary shares at an exercise price of $11.93. All
options granted to Mr.&nbsp;Ribbins expire on the third
anniversary of the date of the auditor&#146;s report on the
financial statements for the year of grant. If
Mr.&nbsp;Ribbins&#146; employment agreement is terminated, he
will be allowed to purchase the medical insurance provided by us
to our employees for the rest of his life.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into a three-year employment agreement
with Gregory McTaggart, our Vice President of Operations. This
agreement was originally scheduled to expire on August&nbsp;19,
2001, although it extends automatically each year for an
additional one year term. Under the agreement, if we terminate
Mr.&nbsp;Gregory McTaggart without cause, he is entitled to all
financial benefits under the agreement for a period of one year.
Under the terms of his employment agreement, Mr.&nbsp;Gregory
McTaggart is 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.&nbsp;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. For the year ended December&nbsp;31,
2002, Mr.&nbsp;Gregory McTaggart was granted an option to
purchase 19,325 ordinary shares at an exercise price of $11.93.
All options granted to Mr.&nbsp;Gregory McTaggart expire on the
third anniversary of the date of the auditor&#146;s report on
the financial statements for the year of grant. As a result of
the option grant described above, Mr.&nbsp;Gregory McTaggart was
no longer eligible to participate in the employee share
incentive plan for fiscal years after 1999.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of his employment agreement,
Mr.&nbsp;Gregory McTaggart is entitled to receive an annual
bonus for each completed financial year during which he serves
in the capacity of Vice President of Operations (Cayman
Islands). The bonus consists of 2.5% of the amount by which our
net profits for that financial year (before charging this bonus,
dividends or crediting any amounts arising from the re-valuation
of our assets) exceed the highest annual net profits earned by
us in any prior financial year.
</FONT>

<P align="center"><FONT size="2">63
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into employment agreements with
Gerard Pereira, our new Vice President of Engineering, Kenneth
Crowley, our new Vice President of Overseas Operations and
Robert Morrison, our new Vice President of Purchasing and
Information Technology. Each employment agreement provides that
the agreements shall remain in force unless terminated by either
party upon 90&nbsp;days written notice (except in cases of gross
negligence or misconduct). Under the terms of
Mr.&nbsp;Pereira&#146;s employment agreement, he is entitled to
receive an annual bonus equal to 0.6% of the sum of the net
profits of Ocean Conversion (BVI)&nbsp;and DesalCo (Barbados)
(before charging this bonus, dividends or crediting any amounts
arising from the re-valuation of our assets). Under the terms of
Mr.&nbsp;Crowley&#146;s employment agreement, he is entitled to
an annual bonus of 1.5% of the sum of net profits of Waterfields
and Belize Water Limited (before charging this bonus, dividends
or crediting any amounts arising from the re-valuation of our
assets).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have also entered into a two-year employment
agreement with Brent Santha, our new Vice President of Finance
and Assistant Secretary. The agreement will expire on
January&nbsp;1, 2005, unless extended by the parties. In
addition to his salary, Mr.&nbsp;Santha is entitled to an annual
bonus as determined in the discretion of our President and an
option to purchase that number of ordinary shares which equals
0.25% of our net profit for that year. The exercise price of the
options to be granted to Mr.&nbsp;Santha shall be equal to the
average of the closing market price of our ordinary shares on
the last trading day of that year. All options granted to
Mr.&nbsp;Santha expire on the day before the third anniversary
of the date of the auditor&#146;s report on the financial
statement for the year of the grant. Mr.&nbsp;Santha may
terminate this employment agreement upon three months written
notice prior to the anniversary of this agreement. We may
terminate this employment agreement without reason if we pay
Mr.&nbsp;Santha 25% of his annual salary at the time the
termination takes place.
</FONT>

<P align="left">
<B><FONT size="2">Pension Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As with every employer in the Cayman Islands, we
are required by the National Pension Law to provide a pension
plan for our employees. We belong to the Cayman Islands Chamber
Pension Plan, which is the largest pension plan in the Cayman
Islands and is open to employers and their employees in the
Cayman Islands. As of December&nbsp;31, 2002, the Chamber
Pension Plan reported that it had approximately
$65.28&nbsp;million in assets. The Chamber Pension Plan is a
non-profit entity which is administered by the Bank of
Butterfield.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the National Pensions Law, all employees
between the ages of 18 and 60 must contribute a specified
minimum percentage of their earnings to the Chamber Pension
Plan. Until recently, the exact percentage of contributions
varied according to the age of each employee. Since June&nbsp;1,
2002, however, all employees must contribute 5% of their
earnings to the Chamber Pension Plan. An employee also has the
option of contributing more than the prescribed minimum. The
employer must match the contribution of the first 5% of each
participating employee&#146;s salary to a maximum of $72,000.
Employees earning more than $72,000 are not required to make
contributions on amounts over $72,000. All contributions by our
employees are collected by us and paid into the Chamber Pension
Plan on a monthly basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a defined benefit plan, the amount that an
employee receives upon retirement is directly related to the
amount contributed to the plan by the employee while working.
Once an employee retires (employees become eligible for
retirement at age&nbsp;60 in the Cayman Islands), an employee
has the following options for receiving benefits:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">receive a cash payout if the employee&#146;s
    retirement savings is less than $6,000;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">transfer the retirement savings to a life annuity
    for investment by a life insurance company and payment of a
    regular income stream to the employee for the remainder of the
    employee&#146;s life (and the employee&#146;s spouse&#146;s life
    if the employee is married at the time of retirement); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">transfer the retirement savings to a Retirement
    Savings Arrangement account with an approved provider or bank
    and receive regular income payments until the account is
    depleted.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Indemnification Provision</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have indemnified our directors and officers
from and against all actions, proceedings, costs, charges,
losses, damages and expenses incurred in connection with their
service as a director or officer. We have not
</FONT>

<P align="center"><FONT size="2">64
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">indemnified our officers or directors for
actions, proceedings, costs, charges, losses, damages and
expenses incurred by these officers or directors as a result of
their willful neglect or default of their obligations to us.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To the extent that indemnification for
liabilities arising under the Securities Act of 1933 may be
available under the above provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange
Commission this indemnification is against public policy as
expressed in the Securities Act of 1933 and is unenforceable in
the United States.
</FONT>

<P align="center"><FONT size="2">65
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "PRINCIPAL AND SELLING SHAREHOLDERS" -->
<DIV align="left"><A NAME="014"></A></DIV>

<DIV align="center">
<B><FONT size="2">PRINCIPAL AND SELLING SHAREHOLDERS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below sets forth the beneficial
ownership of our ordinary shares, par value CI$1.00 per share,
of which 4,275,568 are outstanding before this offering, and our
redeemable preferred shares, par value CI$1.00&nbsp;per share,
of which 18,914 are outstanding before this offering, by:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each person or entity that we know beneficially
    owns more than 5% of our ordinary shares or redeemable preferred
    shares;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each of our executive officers and directors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all of our officers and directors as a group; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the selling shareholder
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Being</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">After the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">After the</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Class</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Identity of Person or Group</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Argyle/Cay-Water, Ltd.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">567,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">567,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Jeffrey M. Parker,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">236,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">236,591</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board and CEO
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Frederick W. McTaggart,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">60,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">60,669</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, President, Chief&nbsp;Operating Officer
    and Chief&nbsp;Financial Officer
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Peter D. Ribbins,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">158,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3.7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">158,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2.9</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director, Director-Special Projects and Company
    Secretary
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Gregory S. McTaggart,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">71,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">71,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Operations (Cayman Islands)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">J. Bruce Bugg, Jr.,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">570,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">567,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,689</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice Chairman of the Board of Directors
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Kenneth R. Crowley,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Overseas Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Robert B. Morrison,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Purchasing and Information
    Technology
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Gerard Pereira,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Engineering
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Brent Santha,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Finance and Assistant Company
    Secretary
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">William T. Andrews,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Brian E. Butler,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">17,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">17,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stephen A. Carr,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">45,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.1%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">45,132</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Richard L. Finlay,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">66
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Being</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">After the</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">After the</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Class</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Identity of Person or Group</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Clarence B. Flowers, Jr.,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Wilmer Pergande,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,633</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4,633</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Raymond Whittaker,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">11,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">11,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">*&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Carson K. Ebanks,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <FONT size="2">Ordinary Shares
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Directors and Executive
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,190,738</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">26.4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">567,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">623,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Officers as a Group (17&nbsp;Persons)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Gregory S. McTaggart,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.6%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.6</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice President of Operations (Cayman Islands)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director and Executive
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.6%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.6</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Officers as a Group (1&nbsp;person)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Abel Castillo,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">15.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">15.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations Manager
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Margaret Julier,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,525</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,525</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">13.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Officer Manager
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">William Banker,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">20.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">20.0</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations Manager
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chet Ritch,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,211</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6.4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,211</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6.4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Rudy Ritch,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12.7%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12.7</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Helbert Rodriquez,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">6.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Ivan Tabora,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.6%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,057</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.6</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Operations
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <BR>
    <FONT size="2">Redeemable
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Elizabeth Triana,
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.4%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred Shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Customer Service
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An asterisk (*) in the above table indicates less
than one percent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The address for Jeffrey M. Parker, Frederick W.
McTaggart, Peter D. Ribbins, Gregory S. McTaggart, Kenneth R.
Crowley, Robert B. Morrison, Gerard Pereira, Brent Santha, Abel
Castillo, Margaret Julier, William Banker, Chet Ritch, Rudy
Ritch, Helbert Rodriquez, Ivan Tabora and Elizabeth Triana is as
follows: c/o&nbsp;Consolidated Water Co. Ltd., Trafalgar Place,
West Bay Road, P.O.&nbsp;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
William T. Andrews is 12 Chapel Road, Paget PG02, Bermuda. The
address for Brian Butler is P.O.&nbsp;Box 2581GT, Grand Cayman,
B.W.I. The address for Steven A. Carr c/o Carr &#38; Associates,
4103 South Texas Avenue, Suite&nbsp;209, Bryan, Texas 77802. The
address for Carson K. Ebanks is Government Administration
Building, Georgetown, Grand Cayman, B.W.I. The address for
Richard Finlay is P.O.&nbsp;Box 709GT, Grand Cayman, B.W.I. The
address for Clarence Flowers, Jr. is P.O.&nbsp;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&nbsp;1982GT, Grand Cayman, B.W.I.
</FONT>

<P align="center"><FONT size="2">67
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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&nbsp;days after March&nbsp;31, 2002 are
deemed outstanding for that person but are not deemed
outstanding for computing the percentage of ownership of any
other person. Of the 236,591 ordinary shares owned by
Mr.&nbsp;Parker, 81,590 of these shares are ordinary shares
underlying options granted to Mr. Parker, which may be exercised
within 60&nbsp;days after March&nbsp;18, 2003. Mr.&nbsp;Parker
has sole voting and investment power over 231,491&nbsp;shares
and shared voting and investment power over 5,100 shares. Of the
60,669 ordinary shares owned by Mr.&nbsp;Frederick W. McTaggart,
54,960 are ordinary shares underlying options granted to
Mr.&nbsp;Frederick W. McTaggart, which may be exercised within
60&nbsp;days after March&nbsp;18, 2003. Of the
158,622&nbsp;ordinary shares owned by Mr.&nbsp;Ribbins, 59,022
are ordinary shares underlying options granted to
Mr.&nbsp;Ribbins, which may be exercised within 60&nbsp;days
after March&nbsp;18, 2003. Mr.&nbsp;Bugg is deemed the
beneficial owner of the 567,662&nbsp;ordinary shares held by
Argyle/ Cay-Water, Ltd. Of the 71,131 ordinary shares owned by
Mr.&nbsp;Gregory W. McTaggart, 40,125 are ordinary shares
underlying options granted to Mr.&nbsp;Gregory McTaggart, which
may be exercised within 60&nbsp;days after March&nbsp;18, 2003
and 297 are redeemable preferred shares, which may be exercised
or converted within 60&nbsp;days after March&nbsp;18, 2003.
</FONT>

<P align="left">
<B><FONT size="2">Shares Eligible for Future Sale</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, we will have
5,475,568 ordinary shares outstanding (5,740,718 ordinary shares
if the underwriter&#146;s over-allotment option is exercised in
full). With the exception of the ordinary shares held by our
officers, directors, ten percent (10%) shareholders and other
affiliates, 4,938,084 of our outstanding shares may be
immediately sold without registration under the Securities Act
of 1933 upon completion of this offering. These shares may be
sold under Rule&nbsp;144 or under the exemption provided by
Section&nbsp;4(1) of the Securities Act of 1933 for transactions
by any person other than issuer, underwriter or dealer. In
addition, 321,770 ordinary shares held by our affiliates (as
this term is defined in the Securities Act of 1933) will be
eligible for resale in compliance with Rule&nbsp;144 upon
completion of this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Generally, Rule&nbsp;144 permits the sale, within
any three-month period, of shares in an amount which does not
exceed the greater of one percent (1%) of the then-outstanding
ordinary shares or the average weekly trading volume during the
four calendar weeks before a sale. We cannot predict the effect
sales made under Rule&nbsp;144, or otherwise, may have on the
then-prevailing market price of the ordinary shares. Any
substantial sale of the restricted ordinary shares under
Rule&nbsp;144, or otherwise, may have a material adverse effect
on the market price of the ordinary shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with our acquisition of Ocean
Conversion (Cayman), we are also obligated to register 185,714
shares issued to one of the sellers with the Securities and
Exchange Commission by June&nbsp;30, 2003. The registration
statement will also cover 30,000 shares acquired by one of our
consultants.
</FONT>

<P align="left">


<!-- link1 "FOREIGN EXCHANGE REGULATIONS AND TAXATION" -->
<DIV align="left"><A NAME="015"></A></DIV>

<DIV align="center">
<B><FONT size="2">FOREIGN EXCHANGE REGULATIONS AND
TAXATION</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Foreign Exchange Regulations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are 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
the ordinary shares. There are no exchange control restrictions
in the Cayman Islands.
</FONT>

<P align="left">
<B><FONT size="2">Cayman Islands Taxation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Cayman Islands presently impose no taxes on
our profit, income, distribution, capital gains, or
appreciations 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. There is no income tax
treaty between the United States and the Cayman Islands.
</FONT>

<P align="center"><FONT size="2">68
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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&nbsp;14, 2001 to May&nbsp;13, 2003, the
stamp tax rate is temporarily set at 5%. To prevent stamp tax
avoidance by transfer of 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&#146;s Cayman land or interest bears to its
total assets and whether the intention of the transfer is to
transfer ownership or part of a company&#146;s entire business
or a part of its Cayman land or interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to our ordinary shares becoming quoted in
the United States, we paid this tax on private share transfers.
We have never paid the tax on transfers of our publicly traded
shares. Since 1994, we requested that the Cayman Islands
government exempt us from the share transfer tax. Other local
companies whose businesses are not primarily related to
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. On April&nbsp;10,
2003, we received notice that the Cayman Islands government had
granted an exemption from taxation for all transfers of our
shares after that date. We believe it is unlikely that
government will seek to collect this tax on transfers of our
publicly traded shares between the period from 1994 through
April&nbsp;10, 2003.
</FONT>

<P align="left">
<B><FONT size="2">United States Taxation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion summarizes some of the
principal U.S. federal income tax considerations that may be
relevant to you if you invest in ordinary shares and are a U.S.
holder. You will be a U.S. holder if you are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a citizen or resident alien individual of the
    United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a corporation or partnership, including an entity
    treated as a corporation or partnership for U.S. federal income
    tax purposes, created or organized in or under the laws of the
    United States or any State thereof or the District of Columbia;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an estate the income of which is subject to U.S.
    federal income taxation regardless of its source;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a trust (i)&nbsp;if a United States court is able
    to exercise primary supervision over the trust&#146;s
    administration and one or more United States persons have the
    authority to control all substantial decisions of the trust or
    (ii)&nbsp;that has a valid election in effect under applicable
    U.S. Treasury Regulations to be treated as a U.S. Holder; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any holder whose income or gain in respect to its
    investment is effectively connected with the conduct of a United
    States trade or business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The summary deals only with U.S. holders that
hold ordinary shares as capital assets. It does not address
considerations that may be relevant to you if you are an
investor that is subject to special tax rules, such as a bank,
thrift, real estate investment trust, regulated investment
company, insurance company, dealer in securities or currencies,
trader in securities or commodities that elects mark-to-market
treatment, a person that will hold ordinary shares as a position
in a &#147;straddle&#148; or conversion transaction, tax exempt
organization, certain insurance companies, a person whose
&#147;functional currency&#148; is not the dollar, or a person
that holds 10% or more of our voting shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividends paid with respect to ordinary shares to
the extent of our current and accumulated earnings or profits as
determined under U.S. federal income tax principles will be
taxable to you as ordinary income at the time that you receive
such amounts. Dividends generally will be foreign source income
and will not be eligible for the dividends-received deduction
available to domestic corporations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a sale, exchange or other taxable
disposition of ordinary shares you generally will recognize gain
or loss for federal income tax purposes in an amount equal to
the difference between (1)&nbsp;the sum of the amount of cash
and fair market value of any property you receive and
(2)&nbsp;your tax basis in the ordinary shares that you
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<DIV align="left">
<FONT size="2">dispose of. Such gain or loss will generally be
long-term capital gain or loss if you have held the ordinary
shares for more than one year. Generally, gain from the sale of
long-term capital assets is subject to a maximum capital gains
tax rate for individuals of 20% (10% for individuals in the 10%
or 15% tax bracket). A special lower rate of 18% (8% for
individuals in the 10% or 15% tax bracket) may apply to
transactions, when the asset was held more than five years. The
ability of U.S. holders to offset capital losses against
ordinary income is limited. Any gain generally will be treated
as U.S. source income.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may be subject to backup withholding at a
rate of 30% in 2003, 29% in 2004 and 2005, and 28% thereafter,
with respect to dividends paid on ordinary shares or the
proceeds of a sale, exchange or other disposition or ordinary
shares, unless you: (i)&nbsp;are a corporation or come within
another exempt category, and when required, you demonstrate this
fact, or (ii)&nbsp;provide a correct taxpayer identification
number, certify that you are not subject to backup withholding
and otherwise comply with applicable requirements of the backup
withholding rules.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amount withheld under these rules will be
creditable against your federal income tax liability. You should
consult your tax advisor regarding your qualification for
exemption from backup withholding and the procedure for
obtaining such an exemption, if applicable.
</FONT>

<P align="center"><FONT size="2">70
</FONT>

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<P align="left">


<!-- link1 "MEMORANDUM AND ARTICLES OF ASSOCIATION" -->
<DIV align="left"><A NAME="016"></A></DIV>

<DIV align="center">
<B><FONT size="2">MEMORANDUM AND ARTICLES OF
ASSOCIATION</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Registered Office</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been assigned registration number C/0250
by the registrar of companies in the Cayman Islands. The
registered office is located at Trafalgar Place, West Bay Road,
P.O.&nbsp;Box&nbsp;1114, Grand Cayman, Cayman Islands. The
telephone number at that location is (345)&nbsp;945-4277.
</FONT>

<P align="left">
<B><FONT size="2">Object and Purpose</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Paragraphs 3 and 4 of the Amended and Restated
Memorandum of Association (&#147;Memorandum of
Association&#148;) provide that our object and purpose is to
perform all functions permitted under the Companies Law (1998
Revision). Without limiting paragraphs 3 and 4, paragraph 5 of
the Memorandum of Association provides that the objects and
powers of our company shall include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To supply water for domestic and all other
    purposes in the Cayman Islands and to construct the necessary
    works for such supply;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To purchase, take on lease, hire or otherwise
    acquire waterworks or the right to supply and work water
    undertakings;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To fit out, maintain and work with any form of
    mechanical steam or electric or other power the necessary works
    for the supply of water including the construction and fitting
    out of pumping stations, reservoirs, desalinators, reverse
    osmosis equipment, pipe lines and all other works necessary or
    reasonably required for the supply of water for the purposes
    aforesaid;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To acquire, manufacture, repair and maintain all
    machines, machinery pipes, utensils, apparatus and materials
    required for the supply aforesaid;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To make from time to time such applications to
    the Cayman Islands government or other authority as may be
    thought necessary or desirable for powers to construct maintain
    and work the business of our company or to acquire or lease
    land, buildings, easements, water rights, water and other works
    and any extensions thereof and to execute any works in
    connection therewith;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To purchase, take upon, lease or otherwise
    acquire or build upon or improve any lands or building or any
    estates or interest therein and any licenses, rights, easements
    or privileges which may be considered necessary or expedient for
    the purposes of the business of our company and to do any such
    things notwithstanding that in any case, the whole of the land
    may not be required for such purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To manufacture, buy, sell, let upon hire, with or
    without an option of purchase, all pipes, taps, valve engines,
    tools, machines and other chattels and things used or which may
    at any time hereafter be used in the establishment, maintenance,
    equipping or working of the aforesaid.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To sell, grant, let, exchange or otherwise
    dispose of absolutely or conditionally or for any limited estate
    or interest, all or any part or section of, the undertaking
    worked our company or any of them or any or any part of the
    property or properties, rights or powers thereof or any
    licenses, rights or privileges in over or in relation to any
    such property or any part thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To purchase or otherwise acquire any lands and
    buildings, and to utilize the same for the treatment, re-use and
    disposal of sewage, and to construct, erect and lay down any
    buildings, engines, pumps, sewers, tanks, drains, culverts,
    channels, sewage or other works or things that may be necessary
    or convenient for any of the objects of our company;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To manufacture, purchase, sell, deal in or
    otherwise dispose of chemical vegetable and other manures and
    other substances, materials and things that may be conveniently
    dealt with in connection with sewage works.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To engage in or carry on any other lawful trade,
    business or enterprise which may at any time appear to our
    directors capable of being conveniently carried on in
    conjunction with any of the aforementioned businesses or
    activities or which may appear to our directors likely to be
    profitable to us.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">71
</FONT>

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<P align="left">
<B><FONT size="2">Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;26.05 of our Amended and Restated
Articles of Association (the &#147;Articles of
Association&#148;) provides that a director may vote in respect
of any contract, arrangement or other matter notwithstanding
such director&#146;s interest provided that the nature of his or
her interest shall have been disclosed to the directors prior to
the resolution. Article&nbsp;25.01 provides that remuneration of
the directors shall be in such amount or at such rate as the
directors may from time determine. Article&nbsp;30.03 provides
that the directors may exercise all the powers of our company to
borrow money and to mortgage or charge its undertaking, property
and uncalled capital or any part thereof by ways of fixed
charge, floating charge or other form of encumbrance, and to
issues debentures, debenture stock and other securities whether
outright or as security for any debt, liability or obligation of
our company or any third party. Article&nbsp;24.02 provides that
our directors are not required to own shares of our company in
order to act as directors of our company unless prescribed by
special resolution.
</FONT>

<P align="left">
<B><FONT size="2">Rights of Shareholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Article&nbsp;4.02 of our Articles of Association
provides that unless otherwise provided in the terms of issue of
a class of stock, the rights attached to any class of shares may
not be changed unless approved by the holders of such class of
shares by special resolution.
</FONT>

<P align="left">
<B><FONT size="2">Annual General Meetings/ Extraordinary General
Meetings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Article&nbsp;16 and Article&nbsp;18, of our
Articles of Association, we shall hold an annual general meeting
on a date determined by our board of directors upon at least
five days notice unless all of the shareholders waive the notice
requirements. Article&nbsp;17.01 of our Articles of Association
provides that an extraordinary general meeting may be called by
our board of directors or by the directors upon the request of
the holders of 51% of shares that have the right to vote at a
general meeting. If the directors do not call an extraordinary
general meeting within 21&nbsp;days of such request, the
shareholders requesting such meeting may call an extraordinary
general meeting so long as the meeting takes place within 90
days of the original request by the shareholders. Under
Article&nbsp;18.01, five days notice must be given prior to an
extraordinary general meeting unless at least 75% of the
shareholders entitled to vote at the meeting agree to call the
meeting on shorter notice (but not shorter than two days).
</FONT>

<P align="left">
<B><FONT size="2">Certain Provisions of the Articles of
Association Having the Effect of Delaying, Deferring or
Preventing a Change in Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Articles of Association provide for our board
of directors to be divided into three classes of directors
serving staggered three-year terms. As a result, approximately
one-third of the board of directors will be elected each year. A
director may be removed prior to expiration of his or her term
by a special resolution of the shareholders. Our Articles of
Association define &#147;special resolution&#148; as a
resolution passed at a shareholder meeting by a majority of
three-quarters of the votes cast, or a resolution passed without
a shareholder meeting by a unanimous vote of all shareholders of
record. Vacancies on the board of directors may be filled either
by the directors or the shareholders. Our classified board of
directors could have the effect of increasing the length of time
necessary to change the composition of a majority of the board
of directors
</FONT>

<P align="left">


<!-- link1 "DESCRIPTION OF SECURITIES" -->
<DIV align="left"><A NAME="017"></A></DIV>

<DIV align="center">
<B><FONT size="2">DESCRIPTION OF SECURITIES</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following statements are not complete. For a
complete description, you should read our Memorandum of
Association and Articles of Association, which are incorporated
by reference in the registration statement.
</FONT>

<P align="left">
<B><FONT size="2">Ordinary Shares</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are authorized to issue 9,900,000 ordinary
shares, par value CI$1.00 per share. Before this offering,
4,275,568 ordinary shares were issued and outstanding.
</FONT>

<P align="center"><FONT size="2">72
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of ordinary shares are entitled to
receive ratably dividends, if any, distributed out of our
accumulated profits. Subject to the preferential rights of
holders of the redeemable preference shares, upon liquidation,
all holders of ordinary shares are entitled to participate pro
rata in our assets which are available for distribution.
</FONT>

<P align="left">
<B><FONT size="2">Redeemable Preferred Shares</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are authorized to issue 100,000 redeemable
preferred shares, par value CI$1.00 per share. As of the date of
this prospectus, 18,914 redeemable preferred shares were issued
and outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of redeemable preferred shares may cast
one vote for each share held of record at all shareholder
meetings. All voting is on a non-cumulative basis. Upon the
event of our liquidation, 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 incentive plan, we may redeem any
redeemable preferred shares issued to an employee under certain
circumstances. The ordinary shares and the redeemable preferred
shares rank equally in all other respects.
</FONT>

<P align="left">
<B><FONT size="2">Class&nbsp;B Ordinary Shares</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 prospectus, there are no class&nbsp;B ordinary shares
issued and outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of class B ordinary shares are entitled
to the same dividends paid on ordinary shares and redeemable
preference shares, and we cannot pay a dividend on the ordinary
shares without paying the same dividend on the class&nbsp;B
ordinary shares, and vice versa. We cannot redeem the
class&nbsp;B ordinary shares, and the holders of the
class&nbsp;B ordinary shares are not entitled to any repayments
of capital upon our dissolution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 also be
exchanged pursuant to a formula. The class&nbsp;B ordinary
shares and the ordinary shares rank equally in all other
respects.
</FONT>

<P align="left">
<B><FONT size="2">Option Deed</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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
&#147;poison pill.&#148; The option deed may delay or prevent a
change in control of us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 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 us, 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 us.
</FONT>

<P align="center"><FONT size="2">73
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The options are attached to each ordinary share
and redeemable preferred share, including any shares offered by
this prospectus, 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&nbsp;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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 us and our shareholders as determined by
our board of directors. However, a shareholder could potentially
disagree with the board&#146;s determination of what constitutes
a fair price or the best interests of our company and our
shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The full terms and conditions of the options are
contained in an option deed between us and our option agent,
American Stock Transfer &#38; Trust Company. See &#147;Where You
Can Find More Information&#148; on page&nbsp;77 of this
prospectus for information on how to obtain a copy of the option
deed. 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.
</FONT>

<P align="left">
<B><FONT size="2">Transfer Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent for the ordinary shares is
American Stock Transfer&nbsp;&#38; Trust Company, New&nbsp;York,
New&nbsp;York.
</FONT>

<P align="center"><FONT size="2">74
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "UNDERWRITING" -->
<DIV align="left"><A NAME="018"></A></DIV>

<DIV align="center">
<B><FONT size="2">UNDERWRITING</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Janney Montgomery Scott LLC, 1801 Market Street,
Philadelphia, PA 19103 and Wells Fargo Securities, LLC, 600
California Street, San Francisco, CA 94108 are the
representatives of the underwriters. Subject to the terms and
conditions of an underwriting agreement, the underwriters will
purchase from us and the selling shareholder the number of
ordinary shares listed below.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Underwriters</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number of Ordinary Shares</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Janney Montgomery Scott LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wells Fargo Securities, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters are offering the ordinary shares
to the public at an offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
The underwriting agreement provides that obligations of the
underwriters to purchase the ordinary share that are being
offered are subject to the approval of certain legal matters by
counsel to the underwriters and certain other conditions. The
underwriters must take and pay for all of the ordinary shares
offered under this prospectus if any are taken. We will pay
underwriting discounts and commissions to the underwriters
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the gross proceeds from this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters propose to offer the ordinary
shares to the public initially at the offering price per share
shown on the cover page of this prospectus and to certain
dealers at such price less a concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. The underwriters may allow, and such dealers may reallow,
a concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to certain other dealers. After the public offering of the
ordinary shares, the public offering price and the concessions
may be changed by the underwriters.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Without</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">With</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Without</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">With</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Over-allotment</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Underwriting Discounts and Commissions to be paid
    by us
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to indemnify the underwriters and
their respective affiliates, directors, officers, employees,
agents and controlling persons, against any and all losses,
claims, damages or liabilities, joint or several, to which any
of them may become subject under any applicable federal or state
law, or otherwise, and arising out of any transactions
contemplated by the underwriting agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to pay all costs and expenses
incident to the issuance, purchase sale and delivery of the
ordinary shares. The following table sets forth some of such
estimated expenses:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SEC Registration Fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,410.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NASD Filing Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,480.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nasdaq National Market Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advisory Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-accountable Expense Allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Printing Registration Statement, Prospectus and
    Related Documents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounting Fees and Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal Fees and Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transfer Agent Fees and Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miscellaneous
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted the underwriters an option,
exercisable during the 30-day period after the effective date of
the registration statement for this offering, to purchase from
us at the offering price, less underwriting discounts and
commissions, up to 265,150 additional ordinary shares for the
sole purpose of covering
</FONT>

<P align="center"><FONT size="2">75
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">over-allotments, if any. To the extent the
underwriters exercise this option, each of the underwriters has
a firm commitment, subject to certain conditions to purchase a
number of additional ordinary shares proportionate to such
underwriter&#146;s initial commitment in the table that lists
the underwriters.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering and in
compliance with applicable securities laws, the underwriters may
over-allot, which means that they may sell more ordinary shares
than is shown on the cover of this prospectus. The underwriters
may also engage in transactions on the Nasdaq National Market
which stabilize, maintain or otherwise affect the market price
of the ordinary shares at levels above those which might
otherwise prevail in the open market. These transactions may
include placing bids for the ordinary shares or purchasing the
ordinary shares for pegging, fixing or maintaining the price of
the ordinary shares or to reduce a short position created in
connection with this offering. A short position may be covered
by exercising the over-allotment option described above instead
of or in addition to open market purchases. The underwriters do
not have to engage in these activities, and if they do, they may
discontinue them at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, the underwriters may engage in
syndicate covering transactions, which involve purchases of the
ordinary shares in the open market after distribution has been
completed in order to cover syndicate short positions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters may also impose a penalty bid.
Penalty bids permit the underwriters to reclaim a selling
concession from a syndicate member when the ordinary shares
originally sold by that syndicate member are purchased in a
stabilizing transaction or syndicate covering transaction to
cover syndicate short positions. The imposition of a penalty bid
may have an effect on the price of the ordinary shares to the
extent that it may discourage resales of the ordinary shares.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Rule&nbsp;103 of Regulation&nbsp;M of the
Securities Exchange Act of 1934, as amended, certain
underwriters, selling group members or their respective
affiliates who are qualified market makers on the Nasdaq
National Market, may engage in passive market making
transactions in our ordinary shares on the Nasdaq National
Market. They may engage in these activities during the five
business days prior to the pricing of this offering before the
commencement of offers and sales of the ordinary shares. Passive
market makers must comply with volume and price limitations and
must be identified as passive market makers. In general, a
passive market maker must display its bid at a price that is not
greater than the highest independent bid for the security. If
all independent bids are lowered below the passive market
maker&#146;s bid, then the passive market maker&#146;s bid must
then be lowered when certain purchase limits are exceeded.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We and the underwriters do not make any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the ordinary shares. In addition, we and the
underwriters do not make any representations that the
underwriters will engage in any of these transactions or that if
they do, they will not discontinue these transactions without
notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each underwriter does not intend to confirm sales
of the ordinary shares to any accounts over which it exercises
discretionary authority.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under a lock-up agreement with the
representatives, our officers, directors and our principal
shareholders may not offer or sell, without the prior written
consent of the representatives, any of their ordinary shares or
securities convertible into ordinary shares for a period of
120&nbsp;days after the effective date of the registration
statement for this offering. However, we may offer or sell
ordinary shares under our employee share incentive plan and
other transactions specified in the underwriting agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the terms of our engagement letter
with Janney Montgomery Scott LLC, we have also paid Janney
Montgomery Scott LLC an advisory fee of $25,000. We have also
agreed to pay to Janney Montgomery Scott LLC, a non-accountable
expense allowance of $225,000 to be paid on the closing of this
offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information in this section is just a brief
summary of the principal terms of the underwriting agreement. To
find out about all of the terms and conditions of the
underwriting agreement, you should look at a copy of the
underwriting agreement, which is filed as an exhibit to the
registration statement for this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ordinary shares are listed on the NASDAQ
National Market System under the symbol &#147;CWCO.&#148;
</FONT>

<P align="center"><FONT size="2">76
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="019"></A></DIV>

<DIV align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the ordinary shares and
statements in this prospectus concerning matters of Cayman
Islands law will be passed upon by Charles Adams, Ritchie and
Duckworth, our legal counsel in the Cayman Islands.
Richard&nbsp;L. Finlay, an attorney with the firm of Charles
Adams, Ritchie and Duckworth, is one of our directors and
beneficially owns 10,348&nbsp;ordinary shares.
Edwards&nbsp;&#38; Angell, LLP, Fort Lauderdale, Florida, is
acting as counsel to us with respect to certain matters of U.S.
law in connection with this offering. Ballard Spahr
Andrews&nbsp;&#38; Ingersoll, LLP, Philadelphia, Pennsylvania,
is acting as counsel for the underwriters in connection with
this offering.
</FONT>

<P align="left">


<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="020"></A></DIV>

<DIV align="center">
<B><FONT size="2">EXPERTS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our consolidated financial statements for each of
the years in the three-year period ended December&nbsp;31, 2002,
have been included herein and in the registration statement in
reliance upon the report of KPMG Charter Accountants,
independent accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The combined financial statements of Ocean
Conversion (Cayman) Limited, DesalCo Limited and Ocean
Conversion (BVI) Ltd. included in this registration statement
have been audited by Deloitte &#38; Touche, independent
auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements of Waterfields Company
Limited as of and for the years ended December&nbsp;31, 2002 and
December&nbsp;31, 2001 included in this registration statement
have been so included in reliance upon the report of
PricewaterhouseCoopers, independent accountants, given on the
authority of said firm as experts in accounting and auditing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;27, 2002, we dismissed our
independent auditors, PricewaterhouseCoopers. The decision to
dismiss PricewaterhouseCoopers was recommended and approved by
the audit committee of our board of directors. During the fiscal
years ended December&nbsp;31, 2000 and 2001,
PricewaterhouseCoopers&#146; report on our financial statements
did not contain an adverse opinion or disclaimer of opinion and
was not qualified or modified as to uncertainty, audit scope, or
accounting principles. In addition, during each of our fiscal
years ended December&nbsp;31, 2000 and 2001 and the interim
period through June&nbsp;27, 2002, we did not have any
disagreements with PricewaterhouseCoopers on any matter of
accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which, if not
resolved to the satisfaction of PricewaterhouseCoopers, would
have caused PricewaterhouseCoopers to make reference to the
subject matter of the disagreements in connection with its
reports on our financial statements for the year or period in
question. We engaged KPMG to replace PricewaterhouseCoopers on
July&nbsp;9, 2002. We have authorized PricewaterhouseCoopers to
respond fully to the inquiries, if any, of KPMG regarding any
accounting or financial matters relating to us. KPMG has
re-audited the years ended December&nbsp;31, 2000 and 2001 and
there have been no re-statements of the prior audited financial
statements resulting from the re-audits.
</FONT>

<P align="left">


<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="021"></A></DIV>

<DIV align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed with the Securities and Exchange
Commission a registration statement under the Securities Act on
Form&nbsp;F-2 covering the ordinary shares being sold in this
offering. We have not included in this prospectus all of the
information contained in the registration statement, and you
should refer to the registration statement and its exhibits for
further information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The registration statement, including exhibits
and schedules filed with it and all other reports and other
information we file with the Securities and Exchange Commission
can be inspected without charge and copied, at prescribed rates,
at the Securities and Exchange Commission&#146;s Public
Reference Room at 450&nbsp;Fifth Street, N.W., Washington, D.C.
20549. You may also find these documents, other than
confidential filings, at the Securities and Exchange
Commission&#146;s website at http://www.sec.gov. We are subject
to the reporting requirements of the Securities Exchange Act of
1934 and voluntarily file reports on Form&nbsp;10-K,
Form&nbsp;10-Q
</FONT>

<P align="center"><FONT size="2">77
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">and Form&nbsp;8-K with the Securities and
Exchange Commission. We are a foreign private issuer and are
exempt from the rules relating to the furnishing and content of
proxy statements and annual reports to shareholders and the
short swing profit recovery provisions in Section&nbsp;16 of the
Securities Exchange Act of 1934.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will provide a copy of this filing to you upon
request. You should direct your oral or written request for a
copy of this filing to: Consolidated Water Co. Ltd., Trafalgar
Place, West Bay Road, P.O. Box&nbsp;1114GT, Grand Cayman, Cayman
Islands, British West Indies, Attention: Jeffrey M. Parker,
Chief Executive Officer (telephone: 345-945-4277). You will not
be charged for copies unless you request exhibits, for which we
will charge you a minimal fee. However, you will not be charged
for exhibits in any case where the exhibit you request is
specifically incorporated by reference into another document
which is incorporated by this prospectus.
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<!-- link1 "INDEX TO FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="022"></A></DIV>

<DIV align="center">
<B><FONT size="2">INDEX TO FINANCIAL STATEMENTS</FONT></B>
</DIV>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Consolidated Water Co. Ltd.:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Independent Auditors&#146; Report
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Balance Sheets as of
    December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Income for each of the
    years ended<BR>
    December&nbsp;31, 2002, 2001 and 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Stockholders&#146;
    Equity for each of the years ended December&nbsp;31, 2002, 2001
    and 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Cash Flows for each of
    the years ended<BR>
    December&nbsp;31, 2002, 2001 and 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes to Consolidated Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Combined Financial Statements of DesalCo
    Limited, Ocean Conversion (Cayman) Limited, and Ocean Conversion
    (BVI)&nbsp;Ltd.:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Independent Auditors&#146; Report
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined Balance Sheets as of December&nbsp;31,
    2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined Statements of Income and Retained
    Earnings for each of the years ended<BR>
    December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined Statements of Comprehensive Income for
    each of the years ended December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Combined Statements of Cash Flows for each of the
    years ended December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes to Combined Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financial Statements of Waterfields Company
    Limited</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Report of Independent Accountants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance Sheets as of December&nbsp;31, 2002 and
    2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income Statements for each of the years ended
    December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Statements of Changes in Shareholders&#146; Equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Statements of Cash Flows for each of the years
    ended December&nbsp;31, 2002 and 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes to Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INDEPENDENT AUDITORS&#146; REPORT</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors and Stockholders
</FONT>

<DIV align="left">
<FONT size="2">Consolidated Water Co. Ltd.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Consolidated Water Co. Ltd. and subsidiaries
(the &#147;Company&#148;) as of December&nbsp;31, 2002 and 2001,
and the related consolidated statements of income,
stockholders&#146; equity and cash flows for each of the years
in the three-year period ended December 31, 2002. These
consolidated financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with the
auditing standards generally accepted in the United States of
America. Those standards 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. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the consolidated financial
statements referred to above present fairly, in all material
aspects, the financial position of Consolidated Water Co. Ltd.
and subsidiaries as of December&nbsp;31, 2002 and 2001, and the
results of their operations and cash flows for each of the three
years in the three-year period ended December&nbsp;31, 2002, in
conformity with accounting principles generally accepted in the
United States of America.
</FONT>

<P align="left">
<FONT size="2">/s/ KPMG Chartered Accountants
</FONT>

<P align="left">
<FONT size="2">Cayman Islands
</FONT>

<DIV align="left">
<FONT size="2">March&nbsp;18, 2003
</FONT>
</DIV>

<P align="center"><FONT size="2">F-2
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Expressed in United States dollars)</FONT></B>
</DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents (Note 3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">568,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516,446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable (Note 4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,406,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,323,156</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">388,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">370,429</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">887,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total current assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,621,667</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,479,013</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Property, plant and equipment
    </FONT></B><FONT size="2">(Note 5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,253,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,414,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Intangible asset
    </FONT></B><FONT size="2">(Note 6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,619,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,814,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Investment</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,507,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,721,178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND STOCKHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends payable (Note 7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">508,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">499,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and other liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,143,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,087,470</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock compensation liability (Note 15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">424,841</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,324</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long term debt (Note 8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">518,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">355,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total current liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,595,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,153,017</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Long term debt </FONT></B><FONT size="2">(Note
    8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,074,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,213,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Security deposits</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,763</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Advances in aid of construction</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,806,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,457,078</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Stockholders&#146; equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redeemable preferred stock, $1.20 par value.
    Authorized 100,000 shares; issued and outstanding 19,740 shares
    in 2002 and 25,195 shares in 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;A common stock, $1.20 par value.
    Authorized 9,870,000 shares; issued and outstanding 3,993,419
    shares in 2002 and 3,920,064 shares in 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,792,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,704,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;B common stock, $1.20 par value.
    Authorized 30,000 shares; issued and outstanding nil shares for
    2002 and nil shares for 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,354,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,896,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,531,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,633,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total stockholders&#146; equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,701,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,264,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Commitments (Note 14)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total liabilities and stockholders&#146;
    equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,507,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,721,178</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF INCOME</FONT></B>

<DIV align="center">
<B><FONT size="2">(Expressed in United States dollars)</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,910,720</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,026,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,576,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of water sales (Note 10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,882,177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,109,117</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,423,297</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,028,543</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,917,806</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,153,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses (Note 10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,747,990</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,600,016</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,197,569</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,280,553</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,317,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,956,093</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,711</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,584</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">281,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">418,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">416,413</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">295,757</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">446,783</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">448,727</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share (Note 11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share (Note 11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of common shares used in
    the determination of:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per share (Note 11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,969,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,897,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,532,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per share (Note 11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,087,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,999,691</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,616,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146;
EQUITY</FONT></B>

<DIV align="center">
<B><FONT size="2">For Each of the Three Years in the Period
Ended December&nbsp;31, 2002</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(Expressed in United States dollars)</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Redeemable Preferred</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Paid-in</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Retained</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Stockholders&#146;</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Dollars</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Dollars</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Earnings</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Equity</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 1999
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,051,715</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,662,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,765,407</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,301,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,778,299</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Public offering of ordinary shares, $7.05, net of
    issue costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">773,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">927,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,035,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,962,731</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issue of share capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,415</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">128,269</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">325,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">458,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,639</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,767</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(240</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(240</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase and cancellation of ordinary shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(79,100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(94,920</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(399,455</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(494,375</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,262,675</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,262,675</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,634</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,863,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,635,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,726,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,443,709</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,846,593</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issue of share capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,821</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">411,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,260</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(17,112</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase and cancellation of ordinary shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(25,200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30,240</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(241,595</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(271,835</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,575,246</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,575,246</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,920,064</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,704,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,896,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,633,036</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,264,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issue of share capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">490,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">575,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Conversion of preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,083</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(702</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(842</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,999</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,841</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase and cancellation of ordinary shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,184</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,621</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(30,248</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(32,869</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,678,149</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,678,149</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,740</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,688</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,993,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,792,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,354,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,531,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,701,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<DIV align="center">
<B><FONT size="2">(Expressed in United States dollars)</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Adjustments to reconcile net income to net
    cash</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,269,126</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,113,041</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,071,455</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of intangible asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194,906</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">193,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,979</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stock compensation on share grants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on sale of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,702</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Increase) decrease in accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(83,791</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(56,259</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Increase) decrease in inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(68,620</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(165,278</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,043</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Increase) decrease in prepaid expenses and other
    assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(50,529</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(20,401</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in accounts payable and other liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">320,183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase (decrease)&nbsp;in stock compensation
    liability
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">214,517</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(170,526</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,259</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in security deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,196</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Decrease in advances in aid of construction
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,218</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,596</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,994</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,329,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,193,921</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,922,712</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash flows from investing activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(460,886</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,107,837</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,892,147</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,301,759</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of property, plant and
    equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of investment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(12,450</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of subsidiary, net of cash acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,966,979</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,568,723</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,904,237</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,268,738</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash flows from financing activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(426,970</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,669,088</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,477,828</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,127,295</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from credit facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Principal repayments of long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(476,760</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(281,922</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(885,355</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net proceeds from issuance of stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">400,502</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,601</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,368,945</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment to acquire common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(32,869</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(271,595</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(494,375</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment to acquire redeemable preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,841</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">(Decrease) increase in bank overdraft
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(703,331</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,938</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Principal payments under water purchase agreement
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(320,141</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash (used in) provided by financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(709,026</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,024,075</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,574,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net increase in cash and cash
    equivalents</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">228,691</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash and cash equivalents at beginning of
    year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516,446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,146</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash and cash equivalents at end of
    year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">568,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">516,446</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">250,837</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal
Activity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated Water Co. Ltd. and its wholly-owned
subsidiaries (together the &#147;Company&#148;) use reverse
osmosis technology to produce fresh water from seawater. The
Company processes and supplies water to its customers in Grand
Cayman, Cayman Islands; Ambergris Caye, Belize; and South
Bimini, Bahamas. The Company&#146;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&nbsp;11,
1990 in addition to having a right of first refusal on the
extension or renewal thereof. The Company has a contract with
Belize Water Services Ltd. (&#147;BWSL&#148;) 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&nbsp;11, 2001 the Company commenced supplying water under a
ten year agreement to South Bimini International Ltd., a
Bahamian company that owns and operates resort properties on
South Bimini Island, Bahamas. The base price of water supplied
by the Company, 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.
</FONT>

<P align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting
Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Basis of
preparation:</FONT></I><FONT size="2"> The financial statements
presented are prepared in accordance with the accounting
principles generally accepted in the United States of America.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Use of estimates:</FONT></I><FONT size="2">
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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s significant accounting
policies are:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Basis of
consolidation:</FONT></I><FONT size="2"> The consolidated
financial statements include the accounts of the Company&#146;s
wholly-owned subsidiaries Belize 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 being
July&nbsp;21, 2000. All inter-company balances and transactions
have been eliminated. There are no operating results for
Hurricane Hide-A-Way Ltd. and Cayman Water Company Limited as
these companies have been dormant since inception and have no
assets and liabilities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Foreign currency:</FONT></I><FONT size="2">
The functional currency of the Company and its foreign
subsidiaries are their respective local currencies. The
consolidated operations are reported in United States dollars.
The exchange rates between the Cayman Islands dollar, the Belize
dollar and the Bahamian dollar have been fixed to the United
States dollar during all periods presented.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 and losses are included in other
income in the consolidated statements of income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Cash and cash
equivalents:</FONT></I><FONT size="2"> Cash and cash equivalents
comprise cash at bank on call and highly liquid deposits with an
original maturity of three months or less.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Trade accounts
receivable:</FONT></I><FONT size="2"> Trade accounts receivable
are recorded at invoiced amounts based on meter readings. The
allowance for doubtful accounts is the Company&#146;s best
estimate of the amount of probable credit losses in the
Company&#146;s existing accounts receivable balance. The Company
determines the allowance for doubtful accounts based on
historical write-off experience and monthly review of delinquent
accounts. Past
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting
Policies&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">due balances are reviewed individually for
collectibility and disconnection. Account balances are charged
off against the allowance for doubtful accounts after all means
of collection have been exhausted and the potential for recovery
is considered by management to be remote.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Inventory:</FONT></I><FONT size="2"> Inventory
primarily includes replacement spares and parts that are valued
at the lower of cost and net realizable value on a first-in,
first-out basis. Inventory also includes potable water held in
the Company&#146;s reservoirs. The value of the water inventory
is the lower of the average cost of producing and purchasing
water during the year and net realizable value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Deferred
expenditures:</FONT></I><FONT size="2"> Deferred expenditures
represent direct costs incurred in connection with planned
business combinations and financing transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Property, plant and
equipment:</FONT></I><FONT size="2"> Property, plant and
equipment are stated at cost less accumulated depreciation.
Depreciation is calculated using a straight line method with an
allowance for estimated residual values. Rates are determined
based on the estimated useful lives of the assets as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="48%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">5 to 40 years
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">4 to 25 years
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distribution system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">3 to 40 years
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Office furniture, fixtures and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">3 to 10 years
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vehicles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">3 to 10 years
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Leasehold improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Shorter of 5 years and operating lease term
    outstanding
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lab Equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">3 to 10 years
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additions to property, plant and equipment are
comprised of the cost of the contracted services, direct labour
and materials. Assets under construction are recorded as
additions to property, plant and equipment upon completion of
the projects. Depreciation commences in the month of addition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year ended December&nbsp;31, 2001, the
Company carried out an extensive engineering analysis of its
potable water production and distribution equipment in Grand
Cayman. The Company&#146;s analysis concluded that certain
assets would not need to be replaced or relocated as early as
previously planned. As a result of these circumstances,
management considered it appropriate to reassess the estimated
useful economic life of these assets. 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&nbsp;31, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Intangible asset:</FONT></I><FONT size="2">
The Company adopted the provisions of SFAS No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets&#148;, as of
January&nbsp;1, 2002. Goodwill and intangible assets acquired in
a purchase business combination and determined to have an
indefinite useful life are not amortized, but instead tested for
impairment at least annually in accordance with the provisions
of SFAS No.&nbsp;142. SFAS No.&nbsp;142 also requires that
intangible assets with estimable useful lives be amortized over
their respective estimated useful lives to their estimated
residual values, and reviewed for impairment in accordance with
SFAS No.&nbsp;144, &#147;Accounting for Impairment or Disposal
of Long-Lived Assets&#148;. The adoption of SFAS No.&nbsp;142
had no impact on the Company&#146;s consolidated financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the adoption of SFAS No.&nbsp;142, the
intangible asset recorded by the Company was amortized on a
straight-line over the remaining period of the contract. The
impairment of the intangible asset, if any, was measured based
on projected discounted future operating cash flows using a
discount rate reflecting the Company&#146;s average cost of
funds.
</FONT>

<P align="center"><FONT size="2">F-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting
Policies&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Investment:</FONT></I><FONT size="2">
Investments are recorded at cost. The Company recognizes an
impairment loss on declines in value that are other than
temporary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Advances in aid of
construction:</FONT></I><FONT size="2"> The Company recognizes a
liability when advances are received from condominium developers
in the licensed area to help defray the capital expenditure
costs of the Company. These advances do not represent loans to
the Company and are interest free. However, the Company allows a
discount of ten percent on future supplies of water to these
developments until the aggregate discounts allowed are
equivalent to advances received. Discounts are charged against
advances received.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Shares repurchased:</FONT></I><FONT size="2">
Under Cayman Islands law, ordinary shares repurchased must be
cancelled upon redemption. The Company&#146;s issued share
capital is reduced by the par value of those shares, with the
difference being adjusted to additional paid in capital.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Stock and stock option incentive
plans:</FONT></I><FONT size="2"> The Company issues stock under
incentive plans that form part of employees and non-executive
Directors&#146; remuneration and grants options to purchase
ordinary shares as part of remuneration for certain long-serving
employees and the executive officers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company applies the intrinsic-value-based
method of accounting prescribed by APB Opinion No.&nbsp;25
&#147;Accounting for Stock Issued to Employees&#148;, and
related interpretations to account for its fixed-plan stock
options. Under this method, compensation expense is recorded on
the date of grant only if the current market price of the
underlying stock exceeds the exercise price. SFAS No.&nbsp;123
&#147;Accounting for Stock-Based Compensation&#148; established
accounting and disclosure requirements using a fair-valued-based
method of accounting for stock-based employee compensation
plans. As allowed by SFAS No.&nbsp;123, the Company continues to
apply the intrinsic-value method of accounting described above
and has adopted the disclosure requirements of SFAS
No.&nbsp;123. The following table illustrates the effect on net
income if the fair-value-based method has been applied to all
outstanding and unvested awards in each period.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income, as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Add stock-based employee compensation expense
    included in reporting net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">442,497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">169,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,772</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deduct total stock-based employee compensation
    expense determined under fair-value-based method for all rewards
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(622,702</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(645,290</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(417,837</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,396,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,288,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,111,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Earnings per share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic&nbsp;&#151;&nbsp;as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic&nbsp;&#151;&nbsp;pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted&nbsp;&#151;&nbsp;as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted&nbsp;&#151;&nbsp;pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cost of stock options granted to employees is
recorded as a liability and is expensed to the consolidated
statements of income over the vesting period of the options. 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. Options that expire without exercise are also
credited to additional paid in capital in the period in which
the option expired.
</FONT>

<P align="center"><FONT size="2">F-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounting
Policies&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Water sales and cost of water
sales:</FONT></I><FONT size="2"> Customers are billed monthly
based on meter readings performed at or near each month end and
in accordance with agreements which stipulate minimum monthly
charges for water service. An accrual, where necessary, is made
for water delivered but unbilled at year end when readings are
not performed at the year end date. The accrual is matched with
the direct costs of producing, purchasing and delivering water.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Repairs and
maintenance:</FONT></I><FONT size="2"> All repair and
maintenance costs are expensed as incurred.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Comparative figures:</FONT></I><FONT size="2">
Certain of prior year&#146;s figures have been reclassed to
conform to the current year&#146;s presentation.
</FONT>

<P align="left">
<B><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and Cash
Equivalents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents are not restricted as
to withdrawal or use. At December&nbsp;31, 2002, the equivalent
of $395,897 (2001: $372,688) is denominated in Belize dollars.
The Company has a guarantee from the Government of Belize to
repatriate any and all of the Belize Water Limited earnings in
United States dollars.
</FONT>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
Receivable</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounts receivable comprise receivables from
customers and are shown net of an allowance for doubtful
accounts of $12,000 (2001: $12,000). Significant concentrations
of credit risk are disclosed in Note&nbsp;18.
</FONT>

<P align="left">
<B><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property,
Plant and Equipment</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Land
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">475,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">475,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buildings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,211,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,147,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,288,460</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,531,739</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Distribution system
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,237,043</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,007,223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Office furniture, fixtures and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">715,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">675,450</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vehicles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,230</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">580,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Leasehold improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lab equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assets under construction
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,202,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">284,906</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,817,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,780,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,564,078</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,365,081</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,253,646</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,414,935</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002, the Company had
outstanding capital commitments of $1,080,000 (2001:
$1,620,000). It is the Company&#146;s policy to maintain
adequate insurance for loss or damage to all fixed assets that
in management&#146;s assessment may be susceptible to loss. The
Company does not insure the costs of its underground
distribution system which total $9,806,663 (2001: $9,471,931) or
plant and equipment insured by third parties with a total cost
of $3,633,997 (2001: $3,633,997).
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible
Asset</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;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 was attributed to the
water purveyor contract (the &#147;contract&#148;) that the
acquired company had with Belize Water Services Ltd. Seatec
Belize Ltd., now renamed Belize Water Limited, owns and operates
a reverse osmosis plant in Ambergris Caye, Belize. This
acquisition was accounted for by the purchase method and the
intangible asset is being amortized on a straight line basis
over the remaining period of the contract, which expires in
April 2011.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Intangible asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,073,462</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,073,462</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated amortisation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(453,588</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(258,682</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,619,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,814,780</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amortization for each of the next five years is
estimated to be $195,000 per year.
</FONT>

<P align="left">
<B><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Quarterly interim dividends were declared in
respect of Class&nbsp;A common stock and preference shares as
follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March 31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">June 30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">September 30
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December 31
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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&nbsp;31, 2002 are unclaimed
dividends of $85,671 (2001: $100,160).
</FONT>

<P align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long Term
Debt</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">European Investment Bank loan bearing interest at
    3.36%, repayable in semi annual installments, due June&nbsp;20,
    2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">905,384</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,132,144</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Royal Bank of Canada loan bearing interest at six
    month LIBOR plus 1.5%, repayable in semi annual installments of
    $62,500 plus interest, due April&nbsp;27, 2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">312,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">437,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Royal Bank of Canada loan bearing interest at
    monthly LIBOR plus 1.5%, repayable in monthly installments of
    $12,500 plus interest, due February&nbsp;2, 2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,375,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,592,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,569,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less current portion
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(518,275</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(355,840</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term debt, excluding current portion
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,074,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,213,804</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long Term
Debt &nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002, the total lending
facility made available by the Royal Bank of Canada comprised:
a)&nbsp;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)&nbsp;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 of $3,000,000.
The fixed charge covers land owned by the Company and the
floating charge covers all other assets of the Company, except a
reverse osmosis plant charged in connection with the water
purchase agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The European Investment Bank loan is guaranteed
by the Overseas Development Administration (&#147;ODA&#148;) of
the Foreign and Commonwealth Office of the Government of the
United Kingdom. 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 has
agreed to secure the counter guarantee by a second charge over
all assets of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is subject to certain restrictive
covenants associated with its long term debt and is in
compliance with all such covenants at December&nbsp;31, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The aggregate capital repayment obligations
over the next five years are as follows:</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">518,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">530,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">480,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">288,758</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,967,884</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share Capital
and Additional Paid in Capital</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Redeemable preferred stock (&#147;preference
shares&#148;) is issued under the Company&#146;s Employee Share
Incentive Plan as discussed in Note&nbsp;15 and carries the same
voting and dividend rights as ordinary shares of common stock
(&#147;ordinary share&#148;). Preference shares vest over four
years and convert to common stock on a share for share basis on
the fourth anniversary of each grant date. Preference shares are
only redeemable with the Company&#146;s agreement. Upon
liquidation preference shares rank in preference to the ordinary
shares to the extent of the par value of the preference shares
and any related additional paid in capital.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a Class&nbsp;&#145;B&#146; stock
option plan designed to deter coercive takeover tactics.
Pursuant to this plan, holders of ordinary shares and preference
shares were granted options which entitle them to purchase 1/100
of a share of Class&nbsp;&#145;B&#146; 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&#146;s ordinary
shares. Option holders (other than the acquiring person or
group) will also be entitled to buy, for the $37.50 exercise
price, ordinary shares with a then market value of $75.00 in the
event a person or group actually acquires 20% or more of the
Company&#146;s ordinary shares. Options may be redeemed at $0.01
under certain circumstances. 30,000 of the Company&#146;s
authorized but unissued ordinary shares have been reserved for
issue as Class&nbsp;&#145;B&#146; stock. The
Class&nbsp;&#145;B&#146; stock ranks pari passu with ordinary
shares for dividend and voting rights. No
Class&nbsp;&#145;B&#146; stock options have been exercised or
redeemed up to December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the Year Ended December&nbsp;31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cost of water sales comprise the
    following:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water purchases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,952,331</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,074,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,062,582</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,175,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,018,541</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">992,410</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortisation of intangible asset (Note 6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194,906</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">193,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,979</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,042,192</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">939,976</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">741,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fuel oil
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">179,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,842</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">81,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Royalties (Note 14)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">737,064</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">694,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">641,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Electricity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">710,168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">534,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">316,135</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Insurance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">124,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,808</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">64,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other direct costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">766,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">471,218</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">458,712</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,882,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,109,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,423,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Indirect expenses comprise the
    following:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,427,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,299,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,045,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">103,986</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">99,956</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">93,777</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Professional fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">280,297</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">275,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Insurance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">141,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Directors&#146; fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,184</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104,149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other indirect costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">545,085</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">628,874</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">522,866</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,747,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,600,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,197,569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings Per
Share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic earnings per share is calculated by
dividing the net profit attributable to common stockholders by
the weighted average number of ordinary shares in issue during
the year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The net income, weighted average number of
ordinary shares and potential ordinary shares figures used in
the determination of the basic and diluted earnings per ordinary
share are summarized as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared and earnings attributable on
    preference shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,913</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,794</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,220</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income available to holders of ordinary
    shares in the determination of basic earnings per ordinary share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,567,397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,753,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,390,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of ordinary shares in the
    determination of basic earnings per ordinary share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,969,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,897,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,532,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plus:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of preference shares
    outstanding during the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Potential dilutive effect of unexercised options
    and warrants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">93,870</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average number of shares used for
    determining diluted earnings per ordinary share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,087,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,999,691</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,616,271</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segmented
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The supply of water to the Cayman Islands, 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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Water sales from Belize Water Limited for the
three years ending December&nbsp;31, 2002 were earned from one
customer.
</FONT>

<P align="center"><FONT size="2">F-14
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segmented
Information&nbsp;&#151; (continued)</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="47"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="46" align="center" nowrap><B><FONT size="1">As at December 31 and for the Year then Ended</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="46" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Cayman Islands</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Belize(*)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Bahamas(**)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,321,598</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9,769,815</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9,112,031</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,471,098</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,230,775</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">464,928</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">118,024</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">26,333</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,910,720</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,026,923</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9,576,959</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">286,904</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">417,786</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">448,727</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,849</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">28,554</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">443</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">295,757</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">446,783</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">448,727</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cost of water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,871,118</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,344,370</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,172,945</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">862,455</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">718,121</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">250,352</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">148,604</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">46,626</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,882,177</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,109,117</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,423,297</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Indirect expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,512,867</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,404,977</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,164,147</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">226,186</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">190,913</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">33,422</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,937</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,126</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,747,990</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,600,016</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,197,569</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="left" valign="top">
    <FONT size="1">Cost of water sales and direct expenses include:
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">103,427</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">99,865</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">152,757</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">559</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">91</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">103,986</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">99,956</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">152,757</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,043,397</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">932,029</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,009,420</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">180,105</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">160,825</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">62,035</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">45,624</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20,187</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,269,126</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,113,041</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,071,455</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,224,517</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,438,254</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,223,666</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">391,306</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">350,295</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">181,154</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(39,513</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(23,976</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,576,310</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,764,573</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,404,820</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">17,698,944</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,770,560</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,735,330</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,440,673</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,541,795</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,601,166</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,114,029</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,102,580</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">307,395</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">20,253,646</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,414,935</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">17,643,891</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">22,214,167</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,595,627</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,421,195</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,160,107</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,310,772</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,117,082</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,133,363</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,125,551</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">307,395</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">25,507,637</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">22,721,178</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,845,672</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(*)</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company acquired 100% of the outstanding
    shares in Belize Water Limited and began operations on
    July&nbsp;21, 2000.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(**)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On December&nbsp;18, 2000, the Company entered
    into a water supply agreement with South Bimini International
    Ltd. Operations began on July&nbsp;11, 2001.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">F-15
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A professional service firm, of which a Director
is a partner, provided professional services during the year
ended December&nbsp;31, 2002 for which it charged $225,400
(2001: $275; 2000: $12,916).
</FONT>

<P align="left">
<B><FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has committed to purchase a 13.5%
equity interest in Waterfields Company Limited, a Bahamian
company, from Bacardi and Company Ltd. for approximately
BAH$1.4&nbsp;million. Completion of this purchase is subject to
the fulfillment of certain conditions, including the receipt of
government approvals and the commitment of at least 51% of
Waterfields&#146; shareholders to sell their shares to the
Company. In furtherance of this purchase agreement, on
December&nbsp;20, 2002, the Company made a tender offer of
BAH$690 per share to the remaining shareholders of Waterfields.
This tender offer, which is contingent on completion of the
share purchase agreement with Bacardi and Company Ltd., closed
on January&nbsp;31, 2003, by which time the Company had received
acceptances from another 64.7% of Waterfields&#146; shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has committed to sell 165,000
Class&nbsp;C shares in Ocean Conversion (BVI)&nbsp;Ltd., a
British Virgin Islands company, to Sage Water Holdings
(BVI)&nbsp;Ltd. for approximately US$2.1&nbsp;million. The
Company acquired these shares on February&nbsp;7, 2003 as
disclosed in Note 21.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is party to a water purchase
agreement with Ocean Conversion (Cayman) Limited
(&#147;OCL&#148;) under which an annual minimum amount of water
is required to be purchased. At December&nbsp;31, 2002, accounts
payable includes $208,556 (2001: $192,340) outstanding under the
agreement. Water purchases for the three years ended
December&nbsp;31, 2002 are disclosed in Note&nbsp;10.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From the acquisition date of Belize Water Limited
in the year ended December&nbsp;31, 2000, the Company has been
under contract to supply a minimum of 135,000 US&nbsp;Gallons of
water per day to BWSL of Belize. The price of water is adjusted
annually based on government indices. Water sales under this
contract for the three years ended December&nbsp;31, 2002
comprise total sales as disclosed in Note 12.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is obligated to supply water, where
feasible, to customers in the Cayman Islands within its licence
area in accordance with the terms of the licence. Royalties are
paid to the Government of the Cayman Islands at the rate of 7.5%
of gross water sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has committed to lease premises in
the Cayman Islands for a period of one year from
February&nbsp;1, 2003 to January&nbsp;31, 2004 at approximately
$82,000 per annum.
</FONT>

<P align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company operates various stock compensation
plans that form part of employees&#146; remuneration. Stock
compensation expense of $442,497 (2001: $169,599; 2000:
$124,772) is recorded in accordance with APB Opinion No.&nbsp;25
and included within employee costs. Had compensation cost for
the Company&#146;s stock based compensation plans been
determined based on the fair value at the grant dates for awards
under those
</FONT>

<P align="center"><FONT size="2">F-16
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
Compensation&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">plans consistent with the method of
SFAS&nbsp;123, the Company&#146;s net income and earnings per
share would have been reduced to the pro forma amounts below:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="59%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the Year Ended December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income&nbsp;&#151; As reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,576,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764,573</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,404,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income&nbsp;&#151; Pro Forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,396,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,288,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,111,755</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per ordinary share&nbsp;&#151; As
    reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic earnings per ordinary share&nbsp;&#151; Pro
    Forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per ordinary share&nbsp;&#151;
    As reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diluted earnings per ordinary share&nbsp;&#151;
    Pro Forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In calculating the fair value for these options
under SFAS&nbsp;123 the Black-Scholes model was used with the
following weighted average assumptions:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options granted with an exercise price below
market price on the date of grant:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exercise price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grant date market value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk free interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.93</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.56</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected life
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.23 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.21 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.0 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected volatility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42.91</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52.79</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62.64</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected dividend yield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.85</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.59</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options granted with an exercise price above
market price on the date of grant:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="68%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exercise price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Grant date market value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk free interest rate
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected life
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.2 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected volatility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62.57</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected dividend yield
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.57</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Employee Share Incentive Plan (Preference
    shares)</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company awards preference shares 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 ordinary shares. In addition
options are granted to purchase preference shares at a fixed
price, determined annually, which will typically represent a
discount to the market value of the ordinary shares. In
consideration for preference shares, the Company issues ordinary
shares on a share for share basis. Under the plan the conversion
is conditional on the grantee&#146;s satisfying requirements
outlined in the award agreements. Preference shares are only
redeemable with the Company&#146;s agreement.
</FONT>

<P align="center"><FONT size="2">F-17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
Compensation&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The details of preferred shares and preferred
share options granted and exercised under the Employee Share
Incentive Plan is as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Year of</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Strike</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Options</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Grant</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Granted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercised</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Expired</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">nil</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">nil</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">nil</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred share options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,143</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,096</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each employee&#146;s option to purchase preferred
shares must be exercised within 40&nbsp;days of the annual
general meeting of the Company following the date of grant.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Employee
Share Option Plan (Ordinary Stock Options)</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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. The
price at which the option may be exercised will be the closing
market price on the grant date, which is 40&nbsp;days after the
date of the Company&#146;s annual general meeting. The number of
options each employee is granted is equal to five times the sum
of (i)&nbsp;the number of preference shares which that employee
receives for $nil consideration and (ii)&nbsp;the number of
preference share options which that employee exercises in that
given year. Options 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.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-Executive
Directors&#146; Share Plan</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1999, the Company introduced a stock grant
plan, which forms part of Directors&#146; remuneration. Under
the plan Directors receive a combination of cash and ordinary
shares 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 granted are
calculated with reference to a strike price that is set by the
Board of Directors on October&nbsp;1 of the year preceding the
grant. Stock granted during the year ended December&nbsp;31,
2002 totaled 6,305 shares (2001: 7,860) at a strike price of
$10.70 (2001: $7.25).
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Directors and
senior management stock compensation</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain members of senior management are entitled
to receive, as part of the compensation for their services to
the Company, options to purchase ordinary shares. One other
director was granted options as remuneration for services
rendered to the Company during the year ended December&nbsp;31,
2001. In addition, another member of senior management is
entitled to receive, as part of compensation for services to the
Company, ordinary shares of the Company. As at December&nbsp;31,
2002, 2,405 shares (2001: 3,172) were due to this employee.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Non-employee</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of an agreement for market
representation, the Company issued options to purchase ordinary
shares to an investment company for $nil consideration. These
options had an expiry date of one year
</FONT>

<P align="center"><FONT size="2">F-18
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
Compensation&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">commencing on the termination of the agreement,
which management formally terminated on April&nbsp;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.
The Company also issued warrants in conjunction with a private
placement in 1995. These warrants were exercised in full in
January and February 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes information about
the Company&#146;s stock option plans as of December&nbsp;31,
2002, 2001 and 2000, and changes during the years ended on those
dates.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outstanding at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">341,136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">243,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">127,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Granted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">162,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">117,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Exercised
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(58,596</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(61,858</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,136</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Forfeited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,096</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,105</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,143</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outstanding and exercisable at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">394,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.02</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">341,136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">243,045</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summarizes the weighted average
grant-date fair value of options granted during the year:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">For the Year Ended</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="10" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Options granted with an exercise price below
    market price on the date grant:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior management
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non executive Director
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employees&nbsp;&#151; preferred shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employees&nbsp;&#151; ordinary share options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Overall weighted average
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Options granted with an exercise price above
    market price on the date of grant:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior management
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Summary of Options Outstanding at
December&nbsp;31, 2002</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002, the range of exercise
prices on outstanding options was $6.75&nbsp;&#150; $14.69.
Accordingly the following information is presented on options
outstanding, which are all exercisable, at December&nbsp;31,
2002:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="62%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise Prices</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Prices from</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">from</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">$6.75&nbsp;&#150;&nbsp;$9.20</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">$10.84&nbsp;&#150;&nbsp;$14.69</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of options outstanding at
    December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147,671</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">246,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average exercise price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average remaining contractual life
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.13 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.64 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
Compensation&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The weighted average fair value per share under
SFAS 123 for shares issued during the year below market price on
the date of grant follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Weighted</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee Share Incentive Plan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,963</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Directors Share Plan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,056</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,860</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,889</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior management
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Overall weighted average
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,941</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.09</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">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 its Belize operations. The exemption expires in
2006 and is renewable in accordance with the provisions of the
BWSL contract. Services to the 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.
</FONT>

<P align="left">
<B><FONT size="2">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension
Benefits</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A staff pension plan is offered to all employees.
The plan 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&#146;s salary. The total amount recognized as an
expense under the plan during the year ended December&nbsp;31,
2002 was $70,210 (2001: $63,740; 2000: $67,760).
</FONT>

<P align="left">
<B><FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Instruments</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Credit
Risk:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is not exposed to significant credit
risk on the vast majority of customer accounts as the policy is
to cease supply of water to customers&#146; accounts that are
more than 45&nbsp;days overdue. The Company&#146;s exposure to
credit risk is concentrated on receivables from one customer in
Belize. The balance from this customer is current as at
December&nbsp;31, 2002 and management does not anticipate any
losses on this concentration.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest Rate
Risk:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The interest rates and terms of the
Company&#146;s loans are presented in Note 8 of these financial
statements. The Company is subject to interest rate risk to the
extent that LIBOR changes.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Foreign
Exchange Risk:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All relevant foreign currencies have fixed
exchange rates to the United States dollar as detailed under the
foreign currency accounting policy note. If any of these fixed
exchange rates become floating exchange rates, the
Company&#146;s results of operations could be adversely affected.
</FONT>

<P align="center"><FONT size="2">F-20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Instruments &nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Fair
Values:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2002 and 2001, the carrying
amounts of cash and cash equivalents, accounts receivable,
accounts payable and other liabilities and dividends payable
approximate fair values due to the short term maturities of
these assets and liabilities. The Directors consider that the
carrying amount for long term debt due to Royal Bank of Canada
approximates fair value. The fair value for long term debt due
to European Investment Bank is approximately $840,720 (2001:
$1,041,000) 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.
</FONT>

<P align="left">
<B><FONT size="2">19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Cash
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company made the following non-cash
transactions:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="65%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preference shares and issue of
    replacement ordinary shares at $nil consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,767</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preference shares issued to employees at $nil
    consideration (Note 15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,756</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,735</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preference shares at $nil
    consideration
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(240</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary shares issued under the Non-executive
    Directors Share Plan at $nil consideration (Note 15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,998</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ordinary shares issued under senior management
    employment agreements at $nil consideration (Note 15)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid in capital from exercise of stock
    options
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">227,420</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,579</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Reduction in ordinary shares and additional paid
    in capital from cancellation of shares repurchased
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">271,595</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">494,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared but not paid (Note 7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">508,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">499,383</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">401,965</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impact of
Recent Issued Accounting Standards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Financial Accounting Standards Board issued
four standards and one interpretation that affect the Company. A
summary of these standards and interpretation is given below:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the FASB issued SFAS No.&nbsp;143,
&#147;Accounting for Assets Retirement Obligations&#148;. SFAS
No.&nbsp;143 requires the Company to record the fair value of an
asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the
retirement of tangible long-lived assets that result from the
acquisition, construction, development and/or normal use of the
assets. The Company also records a corresponding asset that is
depreciated over the life of the asset. Subsequent to the
initial measurement of the asset retirement obligation, the
obligation will be adjusted at the end of each period to reflect
the passage of time and changes in the estimated future cash
flows underlying the obligation. The
</FONT>

<P align="center"><FONT size="2">F-21
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impact of
Recent Issued Accounting Standards &nbsp;&#151;
(continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">Company is required to adopt SFAS No.&nbsp;143 on
January&nbsp;1, 2003. The Company adopted SFAS No.&nbsp;143
early during the year ended December&nbsp;31, 2001. The adoption
did not have a material effect on the Company&#146;s financial
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In April 2002, the FASB issued SFAS No.&nbsp;145,
&#147;Rescission of FASB Statements No.&nbsp;4, 44, and 64,
Amendment of FASB Statement No.&nbsp;13 and Technical
Corrections&#148;. SFAS No.&nbsp;145 amends existing guidance on
reporting gains and losses from extinguishment of debt to
prohibit the classification of the gain or loss as
extraordinary, as the use of such extinguishments have become
part of the risk management strategy of many companies. SFAS
No.&nbsp;145 also amends FASB Statement No.&nbsp;13 to require
sale-leaseback accounting for certain lease modifications that
have economic effects similar to sale-leaseback transactions.
The provisions of the Statement related to the rescission of
Statement No.&nbsp;4 is applied in fiscal years beginning after
May&nbsp;15, 2002. Earlier application of these provisions is
encouraged. The provisions of the Statement related to Statement
No.&nbsp;13 were effective for transactions occurring after
May&nbsp;15, 2002, with early application encouraged. The
adoption of SFAS No.&nbsp;145 is not expected to have a material
effect on the Company&#146;s financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2002, the FASB issued SFAS No.&nbsp;146,
&#147;Accounting for Costs Associated with Exit or Disposal
Activities&#148;. SFAS No.&nbsp;146 addresses financial
accounting and reporting for costs associated with exit or
disposal activities and nullifies EITF Issue&nbsp;94-3
&#147;Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity&#148;. The
provisions of this Statement are effective for exit or disposal
activities that are initiated after December&nbsp;31, 2002, with
early application encouraged. The adoption of SFAS No.&nbsp;146
is not expected to have a material effect on the Company&#146;s
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2002, the FASB issued Interpretation
No.&nbsp;45 &#147;Guarantor&#146;s Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness to Others, as interpretation of FASB Statements
No.&nbsp;5, 57 and 107 and a rescission of FASB Interpretation
No.&nbsp;34&#148;. This Interpretation elaborates on the
disclosures to be made by a guarantor in its interim and annual
financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is
required to recognized, at inception of a guarantee, a liability
for the fair value of the obligation undertaken. The disclosure
requirements are effective for financial statements of interim
or annual periods ending after December&nbsp;15, 2002. The
initial recognitions and measurement provisions of the
Interpretation are applicable to guarantees issued or modified
after December&nbsp;31, 2002 and are not expected to have a
material effect on the Company&#146;s financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2002, the FASB issued SFAS
No.&nbsp;148, &#147;Accounting for Stock-Based
Compensation&nbsp;&#151; Transition and Disclosure, an amendment
of FASB Statements No.&nbsp;123&#148;. This Statement amends
FASB Statement No.&nbsp;123 &#147;Accounting for Stock-Based
Compensation&#148;, to provide alternative methods of transition
for voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition
the Statement amends the disclosure requirements of Statement
No.&nbsp;123 to require prominent disclosures in both annual and
interim financial statements. Certain of the disclosure
modifications are required for fiscal years ending after
December&nbsp;15, 2002 and are included in the notes to these
consolidated financial statements.
</FONT>

<P align="left">
<B><FONT size="2">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
Events</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following events occurred subsequent to
December&nbsp;31, 2002:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, the Company purchased
interests in the following companies: DesalCo Limited, its
wholly owned subsidiary DesalCo (Barbados) Limited, Ocean
Conversion (Cayman) Limited, Ocean Conversion (BVI)&nbsp;Ltd.
and Waterfields Company Limited. The purchase has provided the
Company with a desalination facility management and engineering
services firm, as well as facilities and contracts to supply
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">CONSOLIDATED WATER CO. LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B><FONT size="2">21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
Events&nbsp;&#151; (continued)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">additional potable water services in the Cayman
Islands, the Bahamas, Barbados and the British Virgin Islands.
The total consideration under the purchase agreements was
$27,800,000, comprised of $25,500,000 in cash and 185,714
ordinary shares of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the unaudited
condensed balance sheets of the acquired entities as of
December&nbsp;31, 2002:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ocean</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Conversion</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Waterfields</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Ocean</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">DesalCo</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Cayman)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Company</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Conversion</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Limited</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Limited</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Limited</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(BVI) Ltd.</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Unaudited)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,798,068</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,023,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,912,344</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,867,233</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property, plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,234,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,764,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,608,175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other non-current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,571,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,313,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,384,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,571,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,677,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,475,408</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">174,924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,712,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">246,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,636,007</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long term debt and liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,180,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,884,293</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,739,379</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities assumed
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">174,924</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,892,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,131,278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,375,386</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,209,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,678,870</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,545,961</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,100,002</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">% of equity acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">% of voting shares acquired
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to finance the purchase, the Company
entered into a credit facility with Scotiabank (Cayman Islands)
Ltd. for a term loan of $20,000,000, an operating line of credit
of $2,000,000 and a bridge financing loan of $17,100,000.
Scotiabank was given a fixed and floating charge on all assets
for $22,000,000. In conjunction with the receipt of this
financing, the Royal Bank of Canada credit facilities were
extinguished, the loans were fully repaid and the fixed and
floating charges held by the bank were released. The second
charge held by the Government of the Cayman Islands, as
described in Note 8, was cancelled and replaced with a
$1,000,000 letter of credit from Scotiabank.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company also cancelled the remaining term of
the water purchase agreement with Ocean Conversion (Cayman)
Limited as a result of the purchase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Government of the Cayman Islands amended the
Company&#146;s license to remove a five percent restriction on
share ownership and transfer. As part of the amended license,
the Company is required to comply with certain aesthetic quality
improvements in the water supplied to the customers in the
Cayman Islands. Management estimates that the capital cost of
complying with the new water quality requirements in accordance
with the amended license will amount to approximately $500,000.
</FONT>

<P align="center"><FONT size="2">F-23
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<DIV align="center">
<B><FONT size="2">INDEPENDENT AUDITORS&#146; REPORT</FONT></B>
</DIV>

<P align="left">
<FONT size="2">To the Board of Directors and Shareholders of
</FONT>

<DIV align="left">
<FONT size="2">DesalCo Limited, Ocean Conversion (Cayman)
Limited, and Ocean Conversion (BVI)&nbsp;Ltd.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying combined balance
sheets of DesalCo Limited, Ocean Conversion (Cayman) Limited,
and Ocean Conversion (BVI)&nbsp;Ltd. (the &#147;Group&#148;) as
of December&nbsp;31, 2002 and 2001 and the related combined
statements of income and retained earnings, comprehensive income
and cash flows for the years then ended (all expressed in United
States dollars). These financial statements are the
responsibility of the Group&#146;s management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those standards 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. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, such combined financial
statements present fairly, in all material respects, the
financial position of the Group as of December&nbsp;31, 2002 and
2001 and the results of its operations and its cash flows for
the years then ended in conformity with accounting principles
generally accepted in the United States of America.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ DELOITTE &#38; TOUCHE
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">April&nbsp;16, 2003
</FONT>

<DIV align="left">
<FONT size="2">George Town, Cayman Islands
</FONT>
</DIV>

<P align="center"><FONT size="2">F-24
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">COMBINED BALANCE SHEETS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">December&nbsp;31, 2002 and 2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(expressed in United States dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,173,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,609,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities available for sale (cost: $10,000,
    2001: $10,000) (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,246,491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,625,431</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Parts inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">693,805</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">554,256</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,159</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of loans receivable (Note&nbsp;4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,080,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,281,994</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,466,893</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Loans receivable
    </FONT></B><FONT size="2">(Note&nbsp;4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,313,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,280,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Fixed assets </FONT></B><FONT size="2">(Note 3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,057,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,303,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Intercorporate investments
    </FONT></B><FONT size="2">(cost: $1,012,501, 2001: $1,012,501)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,012,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,012,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,665,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,063,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">563,262</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">739,092</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Customer deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">165,352</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt (Note&nbsp;6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">730,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,496,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">904,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Profit sharing agreement provision
    </FONT></B><FONT size="2">(Note&nbsp;5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,605,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,865,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Long-term debt
    </FONT></B><FONT size="2">(Note&nbsp;6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,930,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,032,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,770,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Commitments
    </FONT></B><FONT size="2">(Note&nbsp;7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Shareholders&#146; equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Share capital (Note 8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,808,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,808,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,452,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,126,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,632,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,292,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,665,306</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,063,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See notes to combined financial statements
</FONT>

<P align="center"><FONT size="2">F-25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">COMBINED STATEMENTS OF INCOME AND RETAINED
EARNINGS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(expressed in United States dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Revenue</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water Sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,247,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,362,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Services
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">833,326</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,730,687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,196,170</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cost of goods sold</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,589,779</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,576,377</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,140,908</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,619,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">General and administrative expenses</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,367,480</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,256,678</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income from operations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,773,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,363,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other expenses (income)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit Sharing Agreement expense (Note&nbsp;5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,307,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miscellaneous expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(99,384</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(166,289</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miscellaneous income (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(794,861</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69,183</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">437,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,385,076</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income before income taxes</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,336,027</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,978,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income taxes</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,232</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">119,239</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income after income taxes</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,224,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,858,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Retained earnings, beginning of year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,126,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,321,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Dividends</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,898,780</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,053,578</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Retained earnings, end of year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,452,636</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,126,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See notes to combined financial statements
</FONT>

<P align="center"><FONT size="2">F-26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">COMBINED STATEMENTS OF COMPREHENSIVE
INCOME</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(expressed in United States dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,224,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,858,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other comprehensive income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Change in unrealized gain on securities available
    for sale
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,360</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Comprehensive income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,238,395</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,876,160</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See notes to combined financial statements
</FONT>

<P align="center"><FONT size="2">F-27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">COMBINED STATEMENTS OF CASH FLOWS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(expressed in United States dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <B><FONT size="2">Cash Provided by (used in):<BR>
    Operating Activities</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,224,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,858,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments for items not affecting cash:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">750,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">613,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,268</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit Sharing Agreement provision
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,307,080</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,620,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Change in non-cash working capital items:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,621,060</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">489,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Parts inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(139,549</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(185,041</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,088</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175,830</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(301,555</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Customer deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,117</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,374,624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,087,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Investing Activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,504,694</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,277,707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of loans receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">645,393</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">801,519</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of loans receivable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,150,171</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,005,204</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(468,288</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financing Activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(240,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issuance of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,900,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Profit Sharing Agreement payments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(567,073</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,444,791</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,898,780</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,053,578</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(805,853</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,498,369</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">(Decrease) Increase in Cash and Cash
    Equivalents</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(436,433</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,120,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash and Cash Equivalents, Beginning of
    Year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,609,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,488,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash and Cash Equivalents, End of
    Year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,173,364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,609,797</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See notes to combined financial statements
</FONT>

<P align="center"><FONT size="2">F-28
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Group and
Its Principal Activity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo Limited (&#147;DesalCo&#148;) was
incorporated as Sea Conversion (Technology) Ltd. on
July&nbsp;25, 1991 under the laws of the Cayman Islands. On
October&nbsp;30, 1991 the name Sea Conversion (Technology) Ltd.
was changed to DesalCo Limited.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo (Barbados) Ltd., a wholly owned
subsidiary of DesalCo, was incorporated on July&nbsp;13, 1999
under the laws of Barbados.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (Cayman) Limited
(&#147;OCCL&#148;) was incorporated as Reliable Water Cayman
Ltd. on August&nbsp;11, 1989 under the laws of the Cayman
Islands. On September&nbsp;24, 1991 the name of Reliable Water
Cayman Ltd. was changed to Ocean Conversion (Cayman) Limited.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ocean Conversion (BVI)&nbsp;Ltd.
(&#147;OCBL&#148;) was incorporated on May&nbsp;14, 1990 under
the laws of the British Virgin Islands.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These companies are hereinafter referred to as
the &#147;Group&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The principal activities of the Group are:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the design, construction and sale of reverse
    osmosis seawater desalination plants and components thereof;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the development of patented technology for
    reducing the energy requirements of reverse osmosis seawater
    desalination plants (see Note&nbsp;9);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the management and operation of reverse osmosis
    seawater desalination plants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sale of desalinated seawater.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Group companies were sold subsequent to
December&nbsp;31, 2002, as detailed in Note&nbsp;10.
</FONT>

<P align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant
Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements of the Group have been
prepared in conformity with accounting principles generally
accepted in the United&nbsp;States of America and reflect the
following policies:
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of
combination</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The combined financial statements of the Group
have been prepared in the context of SEC Regulation&nbsp;S-X
Section&nbsp;210.3-05(3) and include those of DesalCo Limited
and its subsidiary, DesalCo (Barbados) Ltd., Ocean Conversion
(Cayman) Limited and Ocean Conversion (BVI)&nbsp;Ltd. All
inter-company balances and transactions have been eliminated.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Use of
estimates</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United&nbsp;States of America requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual amounts may differ from those estimates.
</FONT>

<P align="center"><FONT size="2">F-29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue
recognition</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue is recorded when services are provided or
water delivered in accordance with the terms of specific
agreements as described in Note&nbsp;7.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Plant construction revenue is recognized using
the percent-of-completion method. The recognized income is that
percentage of estimated total income that incurred costs to date
bear to estimated total costs after giving effect to estimates
of costs to complete based upon most recent information.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
available for sale</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Securities available for sale are recorded at
fair value with unrealized gains and losses excluded from income
and included in accumulated other comprehensive income as a
separate component of shareholders&#146; equity.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intercorporate
investments</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Intercorporate investments are recorded at cost
and are reviewed on a regular basis to determine if they have
sustained an impairment of value that is considered to be other
than temporary.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories are valued at the lower of cost or
net realizable value.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed
assets</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Equipment with a value greater than $5,000 and an
expected useful life of at least five years is capitalized.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Plant and improvements thereto are recorded at
cost and are depreciated on a straight-line basis to their net
realizable value at the end of the water agreements under which
they are operated. Carrying values of plant and improvements are
reassessed by management on an annual basis and any material
impairments are charged to current operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Office furniture, computer equipment, vehicles
and other machinery and equipment are depreciated using the
straight-line method over five years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Work-in-progress is not depreciated.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalization
of interest costs</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest costs directly attributable to the
construction of qualifying assets, which are assets that
necessarily take a substantial period of time to ready for their
intended use, are added to the cost of those assets until such
time as the assets are substantially ready for use or sale.
</FONT>

<P align="center"><FONT size="2">F-30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Foreign currency translation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assets, liabilities, income and expenses
denominated in foreign currencies are translated to United
States dollars at the following fixed exchange rates:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cayman Islands dollars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">US$1.00 = CI$ 0.82
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bermuda dollars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">US$1.00 = Bda$ 1.00
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Barbados dollars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">US$1.00 = Bds$ 1.99
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bahamas dollars
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">US$1.00 = Bah$ 1.00
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Cash and cash equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and short-term deposits with an original
maturity of three months or less are considered to be cash or
cash equivalents.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Taxation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Group&#146;s operations in Bermuda, the
Cayman Islands and the British Virgin Islands pay no form of
taxes in these countries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo (Barbados) Ltd. accrues for Barbados
corporate income tax and value added tax.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo accrues for Barbados withholding tax on
the receipt of fees and dividends from DesalCo (Barbados) Ltd.
</FONT>

<P align="left">
<B><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed
Assets</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plant and improvements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,178,225</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,509,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Computer equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Office furniture
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,366</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Vehicles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">290,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">291,513</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,590,790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,215,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,533,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,912,864</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,057,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,303,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-31
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans
Receivable</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="70%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due from Water Authority Cayman: original loan of
    $5,736,000, non-interest bearing, balance receivable in monthly
    installments of $34,000 to November 2001, and commencing
    December&nbsp;1, 2001, monthly installments of $14,476 to
    November&nbsp;30, 2008. Loan secured by Red Gate plant,
    machinery and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,027,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,201,523</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due from Water Authority Cayman: two loans
    originally aggregating $1,829,580, bearing interest at 5% per
    annum, receivable in combined monthly installments of principal
    and interest of $25,859 to March, 2005, secured by Lower Valley
    plant, machinery and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">659,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">929,047</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due from Water Authority Cayman: two loans
    originally aggregating $1,169,537, bearing interest at 5% per
    annum, receivable in combined monthly installments of principal
    and interest of $16,530 to March 2006, secured by Lower Valley
    plant, machinery and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">593,882</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">758,070</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Due from Water Authority Cayman: two interest
    free loans originally aggregating $3,150,171, receivable in
    monthly installments of $37,502 to October 2009, secured by
    North Sound Road plant, machinery and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,112,668</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,393,418</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,888,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less current portion
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,080,127</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(607,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,313,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,280,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Principal amounts due in each of the next five
years are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,080,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,103,477</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">891,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">672,918</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">623,739</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,021,783</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,393,418</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Profit Sharing
Provision</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1993, OCCL and OCBL entered into Share
Repurchase and Profit Sharing Agreements with their shareholders
to repurchase 1,275,000 and 450,000, respectively, of their
issued shares in consideration of the granting of profit sharing
rights to those shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as these two companies remain in business
as going concerns, have profits available for the payment of
dividends, and pay a dividend therefrom, the holders of the
Profit Sharing Rights are entitled to receive payment of the
amount of the dividend multiplied by the number of shares they
sold back to each company.
</FONT>

<P align="center"><FONT size="2">F-32
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provision for a profit sharing payment is made
each year as if the entire net profit of these companies had
been distributed as dividends. Payment is made to the owners of
the Profit Sharing Rights when dividends are paid to the
companies&#146; shareholders.
</FONT>

<P align="left">
<B><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term
Debt</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;29, 2002, OCCL entered into a credit
facility whereby OCCL can borrow up to $2,400,000 to finance the
cost of constructing the North Sound Road plant. Commencing
December&nbsp;31, 2002, the loan is to be repaid by equal
semi-annual principal payments of $240,000 and is to be paid in
full by December&nbsp;31, 2007. Interest payments are to be paid
in arrears on a quarterly basis. The facility is secured by a
fixed and floating charge over the assets of OCCL and a written
guarantee from a related party. OCCL has borrowed a total of
$1,900,000 against this credit facility and made repayments of
$240,000 as of December&nbsp;31, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">OCBL has drawn down $1,000,000 of a $1,125,000
loan. The loan bears interest at 1.5% above 3&nbsp;month LIBOR
for US dollars and is to be repaid in equal semi-annual
installments of principal of $125,000, with a balloon payment of
$375,000 on May&nbsp;31, 2006. The loan is secured by a fixed
and floating charge over the assets of OCBL and the guarantee of
the owners of the Profit Sharing Rights (see Note 5) in OCBL.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Principal amounts due in each of the next
five&nbsp;years are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">730,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">730,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">730,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">470,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,660,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">DesalCo Limited</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo provides engineering, operations
management and other services to Waterfields Company Limited
pursuant to an Engineering Services Agreement dated May&nbsp;24,
1996. The current term of the agreement expires in March 2003
after which it continues on a year-to-year basis.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo provides operations and maintenance
services to Sandy Lane Properties Ltd. in Barbados pursuant to
an agreement dated July&nbsp;7, 1999. The agreement, which
expires in January 2006, was assigned by DesalCo to DesalCo
(Barbados) Ltd. on January&nbsp;1, 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with a now terminated Joint Venture
Agreement dated November&nbsp;10, 1995, on June&nbsp;14, 1996
DesalCo and Bacardi &#38; Company Limited issued a Joint and
Several Liability Statement to the Water and Sewerage
Corporation of the Bahamas (&#147;WSC&#148;) in respect of the
execution of an agreement dated May&nbsp;7, 1996 between WSC and
Waterfields Company Limited. The agreement was novated from the
Joint Venture to Waterfields Company Limited on June&nbsp;20,
1996. DesalCo remains contingently liable in the event that
Waterfields Company Limited fails to execute the agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo has a lease for premises in Bermuda until
April&nbsp;30, 2003 at approximately $60,300 per annum plus a
surcharge for electricity.
</FONT>

<P align="center"><FONT size="2">F-33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Ocean Conversion (Cayman)
    Limited</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">OCCL currently has water supply agreements with
its two customers: Consolidated Water Co. Ltd. and Water
Authority-Cayman.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">West Bay Road Plant:</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreement with Consolidated Water Co. Ltd.,
which was revised in 1995 and 2000, and expires on
December&nbsp;31, 2004, provides that the customer must purchase
the West Bay Road plant for $3,442,000. This amount was paid in
full as of December&nbsp;31, 2000. At the date of the agreement
ownership of the plant was transferred to Consolidated Water Co.
Ltd. OCCL is obliged to operate the plant until the agreement
expires.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The price of water sold under the agreement with
Consolidated Water Co. Ltd. consists of fixed monthly fees, plus
quantity fees based upon the amount of water sold, with certain
minimum purchase requirements. The agreement specifies that OCCL
will provide guaranteed quantities and purity of water and will
be subject to penalties for non-compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to a Guarantee dated November&nbsp;7,
1994, Edmund Gibbons Limited (&#147;EGL&#148;), a related party,
has agreed to act as guarantor to Consolidated Water Co. Ltd.
for the obligations of OCCL in connection with this agreement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Red Gate Road Plant:</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">OCCL operates the Red Gate Road plant under a
water supply agreement with Water Authority-Cayman. This
agreement, which was revised in 1994, 1996 and 2001, expires on
November&nbsp;30, 2008. The price of water sold under the Red
Gate Road plant agreement consists of a base monthly fee plus a
quantity fee based upon the amount of water sold and an
electricity adjustment. The agreement also specifies guaranteed
quantities and purity of water, OCCL being subject to penalties
for non-compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreement for the Red Gate Road plant
provides that Water Authority-Cayman make specified monthly
payments to OCCL toward an implied purchase price of $5,736,000.
As of December&nbsp;31, 2002 OCCL has received $4,708,190 (2001:
$4,534,477) towards the final purchase price which has been
recorded as a reduction to the initial loan receivable balance.
At the date of the agreement ownership of the plant was
transferred to Water Authority-Cayman.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to a Guarantee dated May&nbsp;5, 1994,
EGL has agreed to act as guarantor to the Government of the
Cayman Islands in order to guarantee the obligations of OCCL in
connection with this agreement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">Lower Valley Plant:</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On March&nbsp;13, 1998, OCCL completed
construction of and began operating the reverse osmosis plant in
the Lower Valley area of Grand Cayman in accordance with an
agreement signed on June&nbsp;18, 1997 with Water
Authority-Cayman, and amended August&nbsp;20, 1999. The price of
water sold under the agreement consists of base monthly fees
plus a quantity fee based on the amount of water sold and an
energy fee. The agreement also specifies guaranteed quantities
and purity of water with OCCL being subject to penalties for
non-compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreement, which expires on March&nbsp;31,
2006, provides that Water Authority-Cayman make monthly payments
to OCCL toward the final purchase price of the plant, which
consist of four parts: $1,225,800 (expressed in United States
dollars) and $495,100 (expressed in Cayman Islands dollars) for
the base portion of the plant, and $1,111,000 (expressed in
United States dollars) and $48,000 (expressed in Cayman Islands
</FONT>

<P align="center"><FONT size="2">F-34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">dollars) for the expansion portion of the plant
which was completed in 1999. At the date of the agreement
ownership of the plant was transferred to Water Authority-Cayman.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">North Sound Road Plant:</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">OCCL entered into an agreement with Water
Authority-Cayman dated October&nbsp;26, 2001, to construct and
operate a reverse osmosis plant off North Sound Road, Grand
Cayman. The price of water sold under the agreement consists of
base monthly fees plus a quantity fee based on the amount of
water sold and an energy fee. The agreement also specifies
guaranteed quantities and purity of water with OCCL being
subject to penalties for non-compliance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The agreement, which expires on October&nbsp;31,
2009, provides that Water Authority-Cayman make monthly payments
to OCCL toward the final purchase price of the plant, which
consist of two parts: $1,827,000 (expressed in United States
dollars) and $1,085,000 (expressed in Cayman Islands dollars).
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Ocean Conversion
    (BVI)&nbsp;Ltd.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to an agreement, the sole customer of
OCBL is the government of the British Virgin Islands. The
agreement was amended on January 24, 1992 to provide for an
increase in the production capacity of the plant from 360,000 to
510,000 Imperial gallons per day. The amended agreement also
provided that, in May 1999, the government had the option to
extend the agreement for a further seven years or purchase the
plant for $1,420,000. The government did not exercise its
purchase option and has advised OCBL of its desire to negotiate
an amended agreement.
</FONT>

<P align="center"><FONT size="2">F-35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share
Capital</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="71%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">DesalCo Limited</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Authorized:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">900,000 common shares of $1.00 par value each
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issued and fully paid:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">3,276 common shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ocean Conversion (Cayman) Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Authorized:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">3,000,000 shares of $1.00 par value each
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issued to a Group company and eliminated on
    combination:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">297,000 non-voting shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">297,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issued to others:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1,695,000 voting shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,695,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,695,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Ocean Conversion (BVI)&nbsp;Ltd.</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Authorized:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">1,800,000 shares of $1.00 par value each
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issued to a Group company and eliminated on
    combination:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">120,000 Class&nbsp;C non-voting shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">120,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Issued to others:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">555,000 Class&nbsp;A voting shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">555,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">555,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">555,000 Class&nbsp;B voting shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">555,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">555,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,225,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,225,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less eliminations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">417,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">417,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,808,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,808,276</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under a Management Services Agreement (the
&#147;MSA&#148;), dated September&nbsp;30, 1992, DesalCo
provides engineering, general management, operations management
and other services to OCCL and OCBL, which operate desalination
plants. The MSA may be cancelled for non-performance, upon
12&nbsp;months prior notice, or when the longest sale contract
expires.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The MSA provides for an inflation-adjusted
monthly direct services fee; an engineering fee for capital
additions or modification to the plants or the construction of
new plants; fees for design engineering time; a profit sharing
bonus; a fee for purchasing items where DesalCo Limited has a
favourable discount (as a designer of desalination plants); and
reimbursement of defined expenses. The MSA also defines the
split of fees and expenses between OCCL and OCBL.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DesalCo developed the DWEER system on the plants
described in Note&nbsp;7, and held patents related to the
technology in a number of countries. During 1999, DesalCo
commenced marketing and sales activities to sell the DWEER
system on a world-wide basis to manufacturers of reverse osmosis
seawater desalination
</FONT>

<P align="center"><FONT size="2">F-36
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">DESALCO LIMITED, OCEAN CONVERSION
(CAYMAN)</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">LIMITED, AND OCEAN CONVERSION
(BVI)&nbsp;LTD.</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO COMBINED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV align="center">
<B><FONT size="2">for the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(expressed in United States dollars)</FONT></B>
</DIV>

<P align="left">
<FONT size="2">plants. While a number of proposals were
submitted and remain outstanding, no contracts were entered into
before April&nbsp;11, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under an agreement dated April&nbsp;11, 2002,
that was amended and restated on September&nbsp;24, 2002,
DesalCo sold the DWEER technology to an affiliate, DWEER
Technology Limited (&#147;DWEER-Tech&#148;), a Cayman Islands
company, for $750,454. Under the agreement, DesalCo agreed to
transfer, retain and provide access to DWEER technology records
and data in its possession for a period of five years, as well
as allowing DWEER-Tech to conduct trials and tests at plants and
facilities in which DesalCo is involved as operator or manager.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In accordance with the terms of a Share Sale
Agreement with a third party, on September&nbsp;24, 2002,
DesalCo entered into a distributorship agreement with DWEER-Tech
and obtained the exclusive right to sell and distribute DWEER
technology in the Caribbean Basin, the Bahamas, Barbados, the
Turks and Caicos Islands and certain nations bordering the Gulf
of Mexico, excluding the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Intercorporate investments include DesalCo&#146;s
holding of 1,911 common shares of Bah$10.00 par value in
Waterfields Company Limited, an affiliated company incorporated
in the Commonwealth of the Bahamas. This holding represents a
12.7% interest in that company.
</FONT>

<P align="left">
<B><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
Events</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Included in the plant of OCBL is the $157,337
cost of a reverse osmosis seawater desalination plant purchased
for use on the island of Jost Van Dyke in the British Virgin
Islands. On February&nbsp;13, 2003, the plant was transferred to
JVD Ocean Desalination Ltd., a British Virgin Islands company in
return for the issue to OCBL of 15,000 or 60% of the issued
shares of JVD Ocean Desalination Ltd. at $1.00 each with the
balance treated as an unsecured loan to the company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;7, 2003, Consolidated Water Co.
Ltd. acquired all of the issued shares of DesalCo and OCCL and
55% of the Profit Sharing Rights of OCBL. Through DesalCo, all
of the Class&nbsp;A voting shares of OCBL were also acquired.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Coincident with the closing of these transactions
Consolidated Water Co. Ltd.;
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">surrendered 18.2% of its Profit Sharing Rights in
    OCBL in return for the issue of 45,000 Class&nbsp;C non-voting
    shares of OCBL to DesalCo. DesalCo contracted for the sale of
    165,000 Class&nbsp;C non-voting shares to Sage Water Holdings
    (BVI)&nbsp;Ltd.;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">released and replaced the guarantor of
    OCCL&#146;s obligations to the Cayman Islands government under
    the Red Gate Road Plant Agreement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">cancelled the West Bay Road Plant Water Purchase
    Agreement between itself and OCCL; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">cancelled the Profit Sharing Agreement of OCCL.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;14, 2003, OCBL entered into a
loan facility with Scotiabank (Cayman Islands) Ltd., which will
be used to retire the existing loan with Bank of Butterfield.
The terms of this new loan facility are similar to the existing
loan facility.
</FONT>

<P align="center"><FONT size="2">F-37
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<DIV align="center">
<B><FONT size="2">REPORT OF INDEPENDENT ACCOUNTANTS</FONT></B>
</DIV>

<P align="left">
<FONT size="2">To the Shareholders of Waterfields Company Limited
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying balance sheets
of Waterfields Company Limited as of December&nbsp;31, 2002 and
2001 and the related statements of income, changes in
shareholders&#146; equity and cash flows for the years then
ended. These financial statements are the responsibility of the
Company&#146;s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the United States of
America. Those Standards require that we plan and perform the
audits 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. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of Waterfields Company Limited as of December&nbsp;31,
2002 and 2001, and the result of its operations, changes in its
shareholder&#146;s equity, and its cash flows for the years then
ended in conformity with accounting principles generally
accepted in the United States of America.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ PRICEWATERHOUSECOOPERS
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">PricewaterhouseCoopers
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Nassau, The Bahamas
</FONT>

<DIV align="left">
<FONT size="2">April&nbsp;9, 2003
</FONT>
</DIV>

<P align="center"><FONT size="2">F-38
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">BALANCE SHEETS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">As of December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(Expressed in Bahamian dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at bank
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$&nbsp;102,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$&nbsp;&nbsp;&nbsp;19,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fixed deposit with banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts receivable (Note 3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">845,504</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">765,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory (Note 4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">652,643</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">660,928</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">148,832</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">133,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,933,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,904,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Non-current Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plant and equipment (Note 5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,765,991</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,328,130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Assets</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">B$9,699,082</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">B$10,233,089</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="10" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Current Liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$&nbsp;148,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$&nbsp;180,721</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other payables and accrued expenses (Note 7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">258,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">105,301</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt (Note 6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">528,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">505,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">837,473</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">944,828</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-current portion of long-term debt (Note 6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,355,435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,889,679</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Liabilities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">2,192,908</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">2,834,507</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commitments and contingencies (Note 11)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Shareholders&#146; Equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, par value $50 per share 40,000
    shares authorized;
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">15,380 shares issued (Note 8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">769,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">769,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital (Note 8)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,921,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,921,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Retained earnings/(accumulated deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(80,793</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,716,799</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,609,207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: Cost of treasury stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210,625</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210,625</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,506,174</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,398,582</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Total Liabilities and Shareholders&#146;
    Equity</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$9,699,082</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">B$10,233,089</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes form an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">INCOME STATEMENTS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">For the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(Expressed in Bahamian dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net water sales (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,086,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,953,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of water sales (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,552,496</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,572,283</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Gross profit</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,534,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,381,469</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Indirect expenses (Note&nbsp;9)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(926,406</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(906,695</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,970</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">474,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other income/(expense):</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(103,389</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(187,981</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net income</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,718</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Basic and diluted earnings per share of common
    stock weighted average number of stock outstanding 2002: 15,043
    (2001: 15,043)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes form an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-40
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENTS OF CHANGES IN SHAREHOLDERS&#146;
EQUITY</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">For the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Retained</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Earnings/</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Paid-in</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">(Accumulated</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Treasury</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Shareholders&#146;</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Deficit)</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Equity</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="17"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="16" align="center" nowrap><B><FONT size="1">(Expressed in Bahamian dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance as of December&nbsp;31, 2000
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">769,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,921,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69,651</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">(210,625)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,409,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,718</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,718</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividend paid on common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(300,860</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(300,860</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance as of December&nbsp;31, 2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">769,000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">6,921,000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">(80,793</FONT></B></TD>
    <TD align="left" valign="bottom" nowrap><B><FONT size="2">)</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <B><FONT size="2">(210,625)</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">7,398,582</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance as of December&nbsp;31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">769,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,921,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(80,793</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">(210,625)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,398,582</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income for the year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends declared on common stock*
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(406,161</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(406,161</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance as of December&nbsp;31, 2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><B><FONT size="2">B$</FONT></B></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">769,000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><B><FONT size="2">B$</FONT></B></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">6,921,000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><B><FONT size="2">B$</FONT></B></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">26,799</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <B><FONT size="2">B$(210,625)</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><B><FONT size="2">B$</FONT></B></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">7,506,174</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Dividends declared during the year was $27 per
    share
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">The accompanying notes form an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">STATEMENTS OF CASH FLOWS</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">For the years ended December&nbsp;31, 2002 and
2001</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="6" align="center" nowrap><B><FONT size="1">(Expressed in Bahamian dollars)</FONT></B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flows from Operating Activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">513,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">289,718</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income to cash
    provided by operating&nbsp;activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,032,620</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,080,761</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss/(Gain) on disposal of equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,813</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,557,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,366,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts receivable:&nbsp;&#151;
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trade receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(79,897</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(109,261</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,254</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,584</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,285</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(28,017</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and deposits
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,185</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(236,387</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net cash provided by operating
    activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,235,852</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,261,497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flows from Investing Activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of plant and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(481,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(249,623</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from disposal of equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,650</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net cash used in investing
    activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(481,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(239,973</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flows from Financing Activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Payment of dividends
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(300,860</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(300,860</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(510,513</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(450,622</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of treasury stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net cash used in financing
    activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(811,373</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(751,482</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net change in cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(57,411</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">270,042</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents&nbsp;&#151; beginning
    of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,974</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash and cash equivalents&nbsp;&#151; end of
    year</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">261,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Interest received</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,925</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Interest paid</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,642</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Represented by:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at bank
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102,433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fixed deposit with banks
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">159,172</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">300,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">261,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom"><FONT size="2">B$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">319,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes form an integral part of
these financial statements.
</FONT>

<P align="center"><FONT size="2">F-42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Waterfields Company Limited (the Company), was
incorporated under the laws of the Commonwealth of The Bahamas
on April&nbsp;22, 1996. The Company was formed with the capital
contributions from Bacardi &#38; Company Limited (BACO), a
company incorporated under the laws of Liechtenstein, and
DesalCo Limited (DesalCo), a company incorporated under the laws
of The Cayman Islands, and other investors. On May&nbsp;7, 1996
a Joint Venture between BACO and DesalCo, formed on
November&nbsp;10, 1995, signed an agreement (the Contract) with
the Water &#38; Sewerage Corporation of The Bahamas
(WSC)&nbsp;for the construction, ownership and operation of a
Sea Water Reverse Osmosis Plant (the Plant) to supply potable
water to WSC. On June&nbsp;20, 1996, the Company was assigned
all rights, title and interest in the Contract by the Joint
Venture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2002, BACO received an offer from
Consolidated Water Co. Ltd. (CWC), a public company incorporated
in the Cayman Islands and registered with the Securities and
Exchange Commission of the United States of America, to purchase
its shares in the Company for $690 per share. On
September&nbsp;17, 2002 BACO accepted CWC&#146;s offer in
principle, and a contract with CWC for the sale of all of
BACO&#146;s shares in the Company has been signed. The sale of
the Company&#146;s shares is subject to certain conditions
including approval by WSC, the Bahamian Government, RBC and IIC
(See Note 15).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has an irrevocable license to use
free of charge a section of WSC&#146;s Windsor Wellfields
property as premises for the Plant. Pursuant to the terms of the
Contract, the Company was initially required to provide
2&nbsp;million imperial gallons of potable water per day
exclusively to WSC for a period of 15&nbsp;years or until a
total of 10,950&nbsp;million gallons has been provided,
whichever occurs later. By an agreement dated September&nbsp;20,
2001 and subsequently amended on January&nbsp;6, 2003 between
the Company and WSC, the daily potable water production quota
has been reduced to 1.6&nbsp;million imperial gallons for the
period from September&nbsp;20, 2001 to June&nbsp;30, 2003.
Thereafter the daily potable water production quota will be
increased to 1.8&nbsp;million imperial gallons until
December&nbsp;31, 2003, at which time WSC will make a
determination as to whether an additional increase in the quota
is warranted. During the year ended December&nbsp;31, 2002,
703,970,000 imperial gallons (2001: 709,282,000) of potable
water were delivered, which resulted in the incurrence of
penalties of $123,240 (2001: $249,260). At the balance sheet
date, 3,363&nbsp;million gallons of potable water were delivered
to WSC since inception. Upon expiration of the Contract, WSC
may, at its discretion, extend the Contract for an additional
five year period. At the end of the Contract, WSC has the right
of first refusal to purchase any equipment or supplies which
will otherwise be removed from the Plant or the premises by the
Company. In certain instances of default, WSC is entitled to
terminate the Contract and acquire the Plant at a predetermined
price based on a sliding scale, as defined in the Contract.
</FONT>

<P align="left">
<B><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant
Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America. 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. Significant accounting policies adopted are as
follows:
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Cash
and cash equivalents</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash and cash equivalents include fixed deposits
with banks. The Company considers all highly liquid investments
held that mature within three months or less of the balance
sheet date to be cash equivalents.
</FONT>

<P align="center"><FONT size="2">F-43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Inventory</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventory is stated at the lower of cost or
market, on a first-in, first-out basis, and includes diesel,
chemicals, lubricants and spare parts.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Plant
and equipment</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Plant and equipment are carried at cost less
accumulated depreciation. Depreciation is calculated on a
straight line basis over their estimated useful lives,
commencing with the month following the beginning of the
Company&#146;s operations or the month following the date of
acquisition, whichever was the later. The Company is exempt from
the payment of import duties on most plant materials and
equipment. The estimated useful lives of the plant and equipment
are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plant
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wells and pipes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Machinery and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5-15 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Furniture and fixtures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Motor vehicles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5 years</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Revenue
recognition</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Revenue is recognized at the point that the
potable water is made available for and accepted by WSC to take
delivery.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;Foreign
currency transactions and balances</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Currently all foreign currency transactions and
balances are denominated in the United States dollar. The
exchange rates between the Bahamian dollar and the United States
dollar have been pegged by the government and remained fixed
during all periods at B$1.00 to US$1.00. Accordingly there are
no foreign exchange gains and losses recognized in income.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;Treasury
stock</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Treasury stock is recorded at cost and presented
as a reduction of shareholders&#146; equity.
</FONT>

<P align="left">
<B><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade Accounts
Receivable</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Trade accounts receivable comprises amounts
receivable from the Company&#146;s sole customer WSC. Management
is of the view that no allowances for bad debts are required to
be made against trade accounts receivable on the basis that WSC
is a government corporation.
</FONT>

<P align="center"><FONT size="2">F-44
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventory is comprised of:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Diesel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,046</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,237</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Chemicals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,853</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lubricants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Spare parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">592,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">577,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goods-in-transit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,501</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">652,643</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">660,928</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plant and
Equipment</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Machinery &#38;</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Wells &#38;</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Motor</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Furniture &#38;</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Plant</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Equipment</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pipes</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Vehicles</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Fixtures</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Year ended December&nbsp;31, 2001</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Opening net book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,572,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,554,186</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">982,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,881</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,165,105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,030</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">175,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,623</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Disposals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&#151; cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13,653</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(13,653</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&#151; accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation charge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(131,321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(822,539</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(81,350</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43,704</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,847</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,080,761</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Closing net book value</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">1,445,348</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">5,901,053</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">971,500</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">8,195</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">2,034</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">8,328,130</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,973,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,145,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,290,602</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">218,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,637,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(528,497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,244,422</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(319,102</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(210,326</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,367</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,309,714</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net book value</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">1,445,348</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">5,901,053</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">971,500</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">8,195</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">2,034</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">8,328,130</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Year ended December&nbsp;31, 2002</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Opening net book value
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,445,348</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,901,053</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">971,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,195</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,034</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,328,130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">461,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">481,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Disposals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&#151; cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(454,675</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(454,675</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&#151; accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">443,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">443,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation charge
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(131,321</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(809,619</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(81,605</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,195</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,880</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,032,620</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Closing net book value</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">1,318,947</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">5,541,225</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">905,665</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">&#151;</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">154</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">7,765,991</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,978,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,150,317</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,306,372</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">218,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,401</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,663,376</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(659,818</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,609,092</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(400,707</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(218,521</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,247</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,897,385</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net book value</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">1,318,947</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">5,541,225</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">905,665</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">&#151;</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">154</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><B><FONT size="2">7,765,991</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s fixed assets are used as
collateral for certain loans that were made to the Company (see
Note&nbsp;6).
</FONT>

<P align="center"><FONT size="2">F-45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Loans and other credit facilities extended to the
Company are as follows:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">B$</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">B$</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Royal Bank of Canada, Nassau Branch
    (RBC)&nbsp;US$ loan at LIBOR plus 1.75% [3.17% at
    December&nbsp;31, 2002 (2001: 3.83125%)]
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,066,508
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,316,935
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RBC, B$ loan at the Nassau Prime Lending Rate
    plus 1.50% [7.50% at December 31, 2002 (2001: 7.50%)]
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">577,785
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">677,871
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">For the above RBC loans, the Company has provided
    its assets as collateral The RBC loan requires quarterly
    payments of interest and principal through the year 2007. The
    total combined quarterly payments of interest and principal on
    these two loans from RBC is approximately $110,000.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inter-American Investment Corporation
    (IIC)&nbsp;US$ loan at LIBOR plus 2.75% [4.56250% at
    December&nbsp;31, 2002 (2001: 5.18750%)]. The IIC loan has been
    collateralized by the Company&#146;s fixed assets and requires
    quarterly repayments of principal in the amount of $40,000
    through the year 2004. Interest, which is calculated on the
    declining principal balance, is payable quarterly
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">240,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">400,000
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total indebtedness
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,884,293
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">2,394,806
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Less: Current portion of long term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">(528,858)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">(505,127)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Non-current portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,355,435
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,889,679
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the above loans, the Company had
an un-drawn available line of credit with RBC for B$500,000 at
the balance sheet dates. This facility is secured by a
registered demand debenture creating a floating charge over the
Company&#146;s assets and bears interest at Nassau Prime plus
1%. Outstanding balances under the facility is repayable on
demand.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above loans and other credit facilities are
subject to restrictive covenants, the most restrictive of which
are as follows:
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>RBC
borrowings:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company must maintain on a
consolidated basis, the ratio of its total liabilities to
tangible net worth as defined, at not greater than 0.60:1.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Payment of dividends to shareholders are
limited to available cash flows, as defined, and retained
earnings.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>IIC
borrowings:</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company must maintain a long-term
debt service coverage ratio of at least 1.5:1.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Payment of dividends to shareholders can
only be made out of profits, as defined, but subject to
compliance with (a)&nbsp;above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The Company&#146;s capital expenditure
in the aggregate shall not exceed $500,000 per annum, excluding
expenditures for Plant construction and maintenance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the year, and for the years ended
December&nbsp;31, 2001 and 2000, the Company was in
contravention of covenants (b)&nbsp;above with respect to the
loans with RBC and IIC respectively. The Company&#146;s
directors have received waivers from its bankers in connection
with these contraventions. RBC and IIC have both granted their
waivers on the condition that all future dividends are to be
paid out of the
</FONT>

<P align="center"><FONT size="2">F-46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<FONT size="2">Company&#146;s retained earnings and profits,
respectively. In addition, IIC has also imposed the condition
that the Company eliminate its deficit no later than
December&nbsp;31, 2003, failing which, the shareholders of the
Company would be required to inject additional capital.
</FONT>

<P align="left">
<B><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Payables
and Accrued Expenses</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Related party (Note 10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">196,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">62,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,957</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">258,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock
and Additional Paid-in Capital</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All shares rank equally except for certain
restrictions as to the voting rights as provided in
shareholders&#146; agreements. The restrictions provide that
only BACO and DesalCo have the right to nominate and elect
directors of the Company. BACO is entitled to elect four
directors and DesalCo one.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shares in the Company were initially offered at a
price of $500 per share, pursuant to the Confidential Offering
Memorandum. Share premium represents the excess of the initial
offering price of the shares over their par value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2000, the Company purchased 337 of its
issued common stock at a cost of $625 per share. These shares
have been accounted for as treasury stock.
</FONT>

<P align="left">
<B><FONT size="2">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from
Operations</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Water sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,210,112</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,203,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Penalties:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Production penalty
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">122,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">High Total Dissolved Solids penalty
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess Electricity penalty
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,990</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,240</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">249,260</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Net water sales</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,086,872</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,953,752</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cost of water sales comprise the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="73%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fuel oil
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">561,373</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">594,198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consumables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">755,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">797,499</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">791,197</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">849,638</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">221,692</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">204,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Insurance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136,449</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,634</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other direct cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86,321</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,552,496</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,572,283</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Indirect expenses comprise the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">B$</FONT></B></TD><TD></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Business licence fee**
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,538</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,770</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Professional fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,766</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Management fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">339,488</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">328,907</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Directors fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Insurance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,772</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,946</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank charges
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">241,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">231,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss/(Gain) on disposal of fixed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,813</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other indirect cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">107,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">143,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">926,406</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">906,695</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income from Operations</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">607,970</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">474,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The Company is attempting to recoup the business
    licence fees paid and seek for future relief.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Balances and Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the balance sheet date, BACO and DesalCo held
2,025 (2001: 2,025) shares and 1,911 (2001: 1,911) shares in the
Company, respectively. Included in these financial statements
are the following balances and transactions with BACO and
DesalCo or companies controlled by either of these entities:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">B$</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">B$</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Accounts Receivable</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BACO&nbsp;&#151; Other receivables
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">24,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Accounts payable and accrued
    expenses:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BACO&nbsp;&#151; Management services fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">13,568
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">73,867
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BACO&nbsp;&#151; Reimbursable expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">3,446
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">20,789
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Engineering services fee,
    regular
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">14,877
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">57,058
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Reimbursable expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">19,262
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">30,059
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Handling fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">3,804
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">14,834
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income Statement</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income BACO
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">&#151;
    </FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Expenses:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BACO&nbsp;&#151; Management services Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">162,188
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">159,033
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BACO&nbsp;&#151; Reimbursable expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">9,575
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">14,862
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Engineering services fee,
    regular
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">177,299
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">169,875
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Reimbursable expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">83,671
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">152,065
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DesalCo&nbsp;&#151; Handling fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">28,406
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">29,480
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to a Management Services Agreement dated
May&nbsp;24, 1996 between BACO and the Company, BACO provides
the Company with general management and administration services.
For these services
</FONT>

<P align="center"><FONT size="2">F-48
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<FONT size="2">BACO is entitled to a monthly fee in arrears of
$13,568 (2001: $13,253) to be adjusted annually in accordance
with the rate of inflation. BACO is also entitled to be
reimbursed for certain direct expenses incurred on behalf of the
Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to an Engineering Services Agreement
dated May&nbsp;24, 1996 between DesalCo and the Company, DesalCo
provides project management, process engineering, technical
assistance and operational management services to the Company.
For these services DesalCo is entitled to a direct service fee
of $14,877 (2001: $14,265) per month, in arrears to be adjusted
annually in accordance with the rate of inflation. The agreement
also provides for additional fees to be paid to DesalCo in the
event of any projects for capital additions or modifications to
the Plant. DesalCo is also entitled to be reimbursed for certain
expenses incurred in carrying out these services.
</FONT>

<P align="left">
<B><FONT size="2">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments
and Contingencies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(i)&nbsp;The Company has the following
commitments and contingencies as of June&nbsp;30, 2002:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name of Party</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">$</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Nature of Contingency</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Royal Bank of Canada, Nassau
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">1,910,775
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Performance and Operation Bond
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Royal Bank of Canada, Nassau
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom">
    <FONT size="2">25,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    <FONT size="2">Bond with the Bahamas Customs Authorities
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Performance and Operation Bond: RBC has made a
guarantee in the amount of B$1,910,775 to WSC that the Company
shall duly perform and observe all terms and provisions pursuant
to the Contract between WSC and the Company. In the event of the
Company&#146;s default on its obligations, RBC shall satisfy and
discharge any damages sustained by WSC up to the guaranteed
amount.
</FONT>

<P align="left">
<B><FONT size="2">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxation and
Statutory Fees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the current laws of The Commonwealth of The
Bahamas, there are no income, corporation, capital gains or
other taxes payable by the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is required to pay an annual business
licence fee, the calculation of which is based on the
Company&#146;s preceding year&#146;s financial statements, and
such fees are payable between January and April of the
subsequent year (Note&nbsp;9).
</FONT>

<P align="left">
<B><FONT size="2">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Instruments</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Credit Risk</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial assets that potentially subject the
Company to concentrations of credit risk consist principally of
cash and trade and other accounts receivable. The Company&#146;s
cash is placed with high credit quality financial institutions.
The trade accounts receivable and other receivables are due from
the Company&#146;s sole customer WSC (Note 1) and BACO
respectively. As a result, the Company is subject to credit risk
to the extent of any non-performance by WSC and BACO.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest Rate
Risk</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The interest rates and terms of the
Company&#146;s loans are presented in Note 6.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair
Value</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2002 and 2001 the
carrying amounts of cash and cash equivalents, trade and other
receivables and trade accounts payable and accrued expenses
approximated their fair values due to the short-term maturities
of these assets and liabilities. The fair values of the
long-term debt due to RBC and IIC at
</FONT>

<P align="center"><FONT size="2">F-49
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<FONT size="2">December&nbsp;31, 2002 using predetermined future
cash flows discounted at an estimated incremental rate of
borrowing for similar liabilities are estimated to be $1,985,268
and $237,705, respectively.
</FONT>

<P align="left">
<B><FONT size="2">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impact of
Recent Accounting Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In June 2001, the Financial Accounting Standards
Board (FASB or the Board) issued Statement of Financial
Accounting Standards No.&nbsp;141 (SFAS 141), Business
Combinations, and No.&nbsp;142 (SFAS 142), Goodwill and Other
Intangible Assets, collectively referred to as the Standards.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS 141 supersedes Accounting Principles Board
Opinion (APB)&nbsp;No.&nbsp;16, Business Combinations. The
provisions of SFAS 141 (1)&nbsp;require that the purchase method
of accounting be used for all business combinations initiated
after June&nbsp;30, 2001, (2)&nbsp;provide specific criteria for
the initial recognition and measurement of intangible assets
apart from goodwill, and (3)&nbsp;require that unamortized
negative goodwill be written off immediately as an extraordinary
gain instead of being deferred and amortized. The Company will
consider the requirements of this statement in any business
combination contemplated in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SFAS 141 also requires that upon adoption of SFAS
142 the Company reclassify the carrying amounts of certain
intangible assets into or out of goodwill, based on certain
criteria. SFAS 142 supersedes APB&nbsp;17, Intangible Assets,
and is effective for fiscal years beginning after
December&nbsp;15, 2001. SFAS 142 primarily addresses the
accounting for goodwill and intangible assets subsequent to
their initial recognition. The provisions of SFAS 142
(1)&nbsp;prohibit the amortization of goodwill and
indefinite-lived intangible assets, (2)&nbsp;require that
goodwill and indefinite-lived intangibles assets be tested
annually for impairment (and in interim period if certain events
occur indicating the carrying value of goodwill and/or
indefinite-live intangible assets may be impaired),
(3)&nbsp;require that reporting units be identified for the
purpose of assessing potential future impairments of goodwill
and (4)&nbsp;remove the forty-year limitation on the
amortization period of intangible assets that have finite lives.
At this time, the Company does not believe that the adoption of
SFAS&nbsp;142 will be relevant and likely have any impact on its
financial position or results of operations as the Company does
not have any goodwill or intangible assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Statement of Financial Accounting Standards
No.&nbsp;143, Accounting for Asset Retirement Obligations
(FAS&nbsp;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&nbsp;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.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Statement of Financial Accounting Standards
No.&nbsp;144, Accounting for the Impairment or Disposal of
Long-Lived Assets (FAS&nbsp;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&nbsp;144 is
effective for fiscal years beginning after December&nbsp;15,
2001. For the years ended December&nbsp;31, 2002 and 2001 the
Company performed impairment test on its long-lived assets and
no impairment was found.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Statement of Financial Accounting Standards
No.&nbsp;146, Accounting for Cost Associated with Exit or
Disposal Activities (FAS&nbsp;146) addresses accounting and
reporting for costs associated with exit or disposal activities.
It requires that a liability for a cost associated with an exit
or disposal activity shall be recognized and measured initially
at its fair value in the period in which the liability is
incurred. In the unusual circumstances in which fair value
cannot be reasonably estimated, the liability shall be
recognized in the
</FONT>

<P align="center"><FONT size="2">F-50
</FONT>

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<DIV align="center">
<B><FONT size="2">WATERFIELDS COMPANY LIMITED</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO FINANCIAL STATEMENTS &#151;
(Continued)</FONT></B>

<P align="left">
<FONT size="2">period in which fair value can be reasonably
estimated. Provision of this statement shall be effective for
exit or disposal activities initiated after December&nbsp;31,
2002. At this time, the Company does not believe the adoption of
the Standard will have a material impact on its financial
position or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial Accounting Standards Board
Interpretation No.&nbsp;45, Guarantor&#146;s Accounting and
Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others (FASB
Interpretation&nbsp;45) is an Interpretation of FASB Statements
No.&nbsp;5, 57 and 107 and Rescission of FASB Interpretation
No.&nbsp;34. The Interpretation elaborates on the disclosures to
be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that
it has issued. It also requires a guarantor to recognize, at the
inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The initial
recognition and measurement provisions of the Interpretation
apply to guarantees issued or modified after December&nbsp;31,
2002. At this time, the Company does not believe the adoption of
the disclosures required by the Interpretation will have any
impact on its financial position and results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Statement of Financial Accounting Standards
No.&nbsp;148, Accounting for Stock-Based
Compensation&nbsp;&#151; Transition and Disclosure
(FAS&nbsp;148) amends FAS 123 Accounting for Stock-Based
Compensation, to provide alternative methods of transition to
FAS 123 fair value method of accounting for stock-based employee
compensation. Additionally, FAS&nbsp;148 requires disclosure of
the effects of an entity&#146;s accounting policy with respect
to stock-based employee compensation on reported net income and
earnings per share in interim and annual financial statements.
At this time the Company does not believe that the adoption of
FAS 148 will be relevant and likely have any impact on its
financial position or results of operations since it does not
have a stock-based compensation plan for any of its employees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Financial Accounting Standards Board
Interpretation No.&nbsp;46, Consolidation of Variable Interest
Entities (FASB Interpretation&nbsp;46) in an Interpretation of
Accounting Research Bulletin No.&nbsp;51. The Interpretation
elaborates on the presentation of consolidated financial
statements by an enterprise if it is the primary beneficiary of
an existing Variable Interest Entity (VIE), as defined or the
requirement of specific disclosures about a VIE in which the
enterprise has significant interest. All enterprises with
variable interests in VIEs created after January&nbsp;31, 2003,
shall apply the provisions of this Interpretation to those
entities immediately. At this time, the Company does not believe
that this Interpretation will have any impact on its financial
position and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent
Events</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On 31 January 2003, as a result of a tender
offer, CWC has agreed to purchase an additional 64.7% of the
Company&#146;s shares from the remaining shareholders for $690
per share, subject to the same conditions in connection with the
offer for BACO&#146;s shares in the Company (See Note&nbsp;1).
Upon closing of the tender offer and the agreement with BACO,
combined with DesalCo&#146;s ownership, CWC will own
approximately 91% of the outstanding shares of the Company.
</FONT>

<P align="center"><FONT size="2">F-51
</FONT>

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<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have not authorized any dealer, salesperson or other person to
give any information or represent anything not contained in this
Prospectus. You must not rely on any unauthorized information.
If anyone provides you with different or inconsistent
information, you should not rely on it. This Prospectus does not
offer to sell any shares in any jurisdiction where it is
unlawful. The information in this Prospectus is current as of
the date shown on the cover page.</FONT></B>

<P align="center">
<HR size="1" width="100%" align="center" noshade>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<P align="center">
<B><FONT size="4">1,767,662&nbsp;Ordinary Shares</FONT></B>

<P align="center">
<IMG src="g80228g8022802.gif" alt="(Consolidated Water Co. Ltd. Logo)">

<P align="center">
<HR size="1" width="31%" align="center" noshade>

<P align="center">
<B>PROSPECTUS</B>

<P align="center">
<HR size="1" width="31%" align="center" noshade>

<P align="center">
<B><FONT size="4">JANNEY MONTGOMERY SCOTT LLC</FONT></B>

<P align="center">
<B><FONT size="4">WELLS FARGO SECURITIES, LLC</FONT></B>

<P align="center">
<FONT size="2">The date of this prospectus
is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003
</FONT>

<P align="center">
<HR size="1" width="100%" align="center" noshade>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">



<DIV align="center">
<B><FONT size="2">PART II</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<DIV align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN THE
PROSPECTUS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">Item&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
Of Directors And Officers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Article&nbsp;40 of our Articles of
Association, we have indemnified our directors and officers from
and against all actions, proceedings, costs, charges, losses,
damages and expenses incurred in connection with their service
as a director or officer. We have not indemnified our officers
or directors for actions, proceedings, costs, charges, losses,
damages and expenses incurred by these officers or directors as
a result of their willful neglect or default of their
obligations to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Underwriting Agreement with our underwriters
provides that that the underwriters are obligated, under certain
circumstances to indemnify our directors, officers and
controlling persons against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. (See
the form of Underwriting Agreement filed as Exhibit&nbsp;1.1
hereto).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we carry directors and
officers&#146; liability insurance.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits</I></FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Underwriting Agreement among Consolidated
    Water&nbsp;Co. Ltd. and the Underwriters
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Share Sale Agreement dated October&nbsp;4, 2002,
    among Consolidated Water&nbsp;Co. Ltd. and William T. Andrews
    and Margaret D. Andrews (incorporated herein by reference to the
    exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    November&nbsp;29, 2002 between the Company and William T.
    Andrews and Margaret D. Andrews (incorporated herein by
    reference to the exhibit filed as a part of our Form&nbsp;8-K
    dated February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    December&nbsp;30, 2002 between the Company and William T.
    Andrews and Margaret D. Andrews (incorporated herein by
    reference to the exhibit filed as a part of our Form&nbsp;8-K
    dated February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    January&nbsp;31, 2003 between the Company and William T. Andrews
    and Margaret D. Andrews (incorporated herein by reference to the
    exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Share Sale Agreement dated October&nbsp;4, 2002,
    among Consolidated Water&nbsp;Co. Ltd., North American
    Mortgage&nbsp;&#38; Finance Corporation and Transcontinental
    Finance Corporation Ltd. (incorporated herein by reference to
    the exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    November&nbsp;29, 2002 among the Company North-American
    Mortgage&nbsp;&#38; Finance Corporation and Transcontinental
    Finance Corporation Limited (incorporated herein by reference to
    the exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    December&nbsp;30, 2002 among the Company North-American
    Mortgage&nbsp;&#38; Finance Corporation and Transcontinental
    Finance Corporation Limited (incorporated herein by reference to
    the exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement to Amend Share Sale Agreement dated
    January&nbsp;31, 2003 among the Company North-American
    Mortgage&nbsp;&#38; Finance Corporation and Transcontinental
    Finance Corporation Limited (incorporated herein by reference to
    the exhibit filed as a part of our Form&nbsp;8-K dated
    February&nbsp;13, 2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement dated October&nbsp;8, 2002 between
    Consolidated Water&nbsp;Co. Ltd. and Sage Water Holdings
    (BVI)&nbsp;Ltd. (incorporated herein by reference to the exhibit
    filed as a part of our Form&nbsp;8-K dated February&nbsp;13,
    2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-1
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amending Agreement dated November&nbsp;15, 2002
    between the Company and Sage Water Holdings (BVI Ltd)
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;8-K dated February&nbsp;13, 2003, Commission
    File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amending Agreement dated December&nbsp;18, 2002
    between the Company and Sage Water Holdings (BVI Ltd)
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;8-K dated February&nbsp;13, 2003, Commission
    File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amending Agreement dated January&nbsp;28, 2003
    between the Company and Sage Water Holdings (BVI Ltd)
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;8-K dated February&nbsp;13, 2003, Commission
    File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Share Sale Agreement dated December&nbsp;16, 2002
    between Consolidated Water&nbsp;Co. Ltd. and Bacardi&nbsp;&#38;
    Co. Ltd. (incorporated herein by reference to the exhibit filed
    as a part of our Form&nbsp;8-K dated February&nbsp;13, 2003,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Addendum dated February&nbsp;14, 2003 to Share
    Sale Agreement dated December&nbsp;16, 2002 between Consolidated
    Water&nbsp;Co. Ltd. and Bacardi&nbsp;&#38; Company Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Addendum dated March&nbsp;25, 2003 to Share Sale
    Agreement dated December&nbsp;16, 2002 between Consolidated
    Water&nbsp;Co. Ltd. and Bacardi&nbsp;&#38; Company Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Registration Rights Agreement dated
    February&nbsp;7, 2003 between Consolidated Water&nbsp;Co. Ltd.
    and North American Mortgage&nbsp;&#38; Finance Corporation
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;8-K dated February&nbsp;13, 2003, Commission
    File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Memorandum of Association of
    Consolidated Water&nbsp;Co. Ltd., dated December&nbsp;4, 1998
    (incorporated by reference to the exhibit filed as part of our
    Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 1998,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Articles of Association of
    Consolidated Water&nbsp;Co. Ltd., dated December&nbsp;4, 1998
    (incorporated by reference to the exhibit filed as part of our
    Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 1998,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion and Consent of Charles Adams, Ritchie and
    Duckworth
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">License Agreement, dated July&nbsp;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&nbsp;20-F dated December&nbsp;7,
    1994, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to License Agreement, dated
    September&nbsp;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&nbsp;20-F dated December&nbsp;7, 1994, Commission File
    No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amendment to License Agreement, dated
    February&nbsp;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&nbsp;20-F
    dated December&nbsp;7, 1994, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">An Amendment to a License to Produce Potable
    Water, dated August&nbsp;15, 2001, between Consolidated
    Water&nbsp;Co. Ltd. by the Government of the Cayman Islands
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2001, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fourth Amendment to a License to Produce Potable
    Water, dated February&nbsp;1, 2003 between Consolidated
    Water&nbsp;Co. Ltd. by the Government of the Cayman Islands
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement dated December&nbsp;19, 2002, between
    Consolidated Water&nbsp;Co. Ltd. (formerly Cayman Water Company
    Limited) and Safe Haven Ltd. (incorporated herein by reference
    to the exhibit filed as part of our Form&nbsp;10-K for the
    fiscal year ended December&nbsp;31, 2002, Commission File
    No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Agreement, dated August&nbsp;30, 2000,
    between Consolidated Water&nbsp;Co. Ltd. and Peter D. Ribbins
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K dated March&nbsp;30, 2001, Commission File
    No.&nbsp;0-25248)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Engagement Agreement, dated December&nbsp;30,
    1998 between Consolidated Water&nbsp;Co. Ltd. and Jeffrey Parker
    (incorporated herein by reference to the exhibit filed as part
    of our Registration Statement on Form&nbsp;F-2 dated
    May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment of Engagement Agreement, dated
    October&nbsp;26, 1999, between Consolidated Water&nbsp;Co. Ltd.
    and Jeffrey Parker (incorporated herein by reference to the
    exhibit filed as part of our Registration Statement on
    Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File
    No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Amendment of Engagement Agreement, dated
    March&nbsp;21, 2000, between Consolidated Water&nbsp;Co. Ltd.
    and Jeffrey Parker (incorporated herein by reference to the
    exhibit filed as part of our Registration Statement on
    Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File
    No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract, dated July&nbsp;12, 2000,
    between Consolidated Water&nbsp;Co. Ltd. and Frederick W.
    McTaggart (incorporated herein by reference to the exhibit filed
    as a part of our Form&nbsp;10-K dated March&nbsp;30, 2001,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract, dated August&nbsp;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&nbsp;F-2 dated
    May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Amendment to Employment Contract, dated
    April&nbsp;17, 2000, between Consolidated Water&nbsp;Co. Ltd.
    and Gregory Scott McTaggart (incorporated herein by reference to
    the exhibit filed as part of our Registration Statement on
    Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File
    No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Summary Share Grant Plan for Directors
    (incorporated herein by reference to the exhibit filed as part
    of our Registration Statement on Form&nbsp;F-2 dated
    May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employee Share Option Plan (incorporated herein
    by reference to the exhibit filed as a part of our
    Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2001,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Option Deed, dated August&nbsp;6, 1997, between
    Cayman Water Company Limited and American Stock
    Transfer&nbsp;&#38; Trust Company (incorporated herein by
    reference to the exhibit filed on our Form&nbsp;6-K, dated
    August&nbsp;7, 1997, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Stock Option Agreement, dated December&nbsp;15,
    1998, between Consolidated Water&nbsp;Co. Ltd. and R.&nbsp;Jerry
    Falkner (incorporated herein by reference to the exhibit filed
    as part of our Registration Statement on Form&nbsp;F-2 dated
    May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Finance Contract, dated October&nbsp;3, 1991,
    between European Investment Bank and Cayman Water Company
    Limited (incorporated herein by reference to the exhibit filed
    as part of our Form&nbsp;20-F, dated December&nbsp;7, 1994,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.19*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Lease, dated March&nbsp;1, 2003, between
    Consolidated Water&nbsp;Co. Ltd. and Colmar LTD.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Lease, dated December&nbsp;10, 2001, between
    Cayman Hotel and Golf Inc. and Consolidated Water&nbsp;Co. Ltd.
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2001, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Lease, dated April&nbsp;27, 1993, between
    Government of Belize and Belize Water Ltd. (incorporated herein
    by reference to the exhibit filed as a part of our
    Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2001,
    Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract dated February&nbsp;10, 2003
    between Gerard Pereira and Consolidated Water&nbsp;Co. Ltd.
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract dated February&nbsp;21, 2003
    between Kenneth Crowley and Consolidated Water&nbsp;Co. Ltd.
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract dated March&nbsp;7, 2003
    between Robert Morrison and Consolidated Water&nbsp;Co. Ltd.
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Employment Contract dated December&nbsp;31, 2002
    between Brent Joseph Santha and Consolidated Water Co. Ltd.
    (incorporated herein by reference to the exhibit filed as a part
    of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.26</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Distributorship Agreement dated
    September&nbsp;24, 2002 between DWEER Technology Ltd. and
    DesalCo Limited (incorporated herein by reference to the exhibit
    filed as a part of our Form&nbsp;10-K for the fiscal year ended
    December&nbsp;31, 2002, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.27*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Profit Sharing Agreement
    dated as of February&nbsp;7, 2003 between Ocean Conversion
    (BVI)&nbsp;Ltd., DesalCo Limited, Consolidated Water Co. Ltd.
    and Sage Water Holdings (BVI) Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.28*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bank of Butterfield Commitment Letter dated
    January&nbsp;2, 2002 between Ocean Conversion (Cayman) Limited
    and the Bank of Butterfield
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.29*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bank of Butterfield Commitment Letter dated
    April&nbsp;10, 2002 between Ocean Conversion (BVI)&nbsp;Ltd. and
    the Bank of Butterfield
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.30*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Debenture dated May&nbsp;29, 2002 between Ocean
    Conversion (Cayman) Limited and the Bank of N.T.
    Butterfield&nbsp;&#38; Son Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.31*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Debenture dated July&nbsp;15, 2002 between Ocean
    Conversion (BVI) Ltd. and the Bank of
    N.T.&nbsp;Butterfield&nbsp;&#38; Son Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.32*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Indemnity of Consolidated Water&nbsp;Co.
    Ltd and North-American Mortgage&nbsp;&#38; Finance Corporation
    dated February&nbsp;7, 2003 relating to a Guarantee Provided by
    North-American Mortgage&nbsp;&#38; Finance Corporation in
    respect of the obligations of Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.33*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of North-American
    Mortgage&nbsp;&#38; Finance Corporation to The Bank of
    N.T.&nbsp;Butterfield&nbsp;&#38; Son dated May&nbsp;28, 2002
    regarding Ocean Conversion (BVI)&nbsp;Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.34*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Indemnity of Consolidated Water&nbsp;Co.
    Ltd and Edmund Gibbons Limited dated February&nbsp;7, 2003
    relating to various guarantees provided by Edmund Gibbons
    Limited in respect of the obligations of Ocean Conversion
    (Cayman) Limited and Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.35*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of Edmund Gibbons Limited
    to The Bank of N.T.&nbsp;Butterfield&nbsp;&#38; Son dated
    March&nbsp;5, 2002 regarding Ocean Conversion (Cayman) Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.36*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of Edmund Gibbons Limited
    to The Bank of N.T.&nbsp;Butterfield&nbsp;&#38; Son dated
    May&nbsp;28, 2002 regarding Ocean Conversion (BVI)&nbsp;Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.37</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Loan Agreement dated February&nbsp;7, 2003
    between Consolidated Water&nbsp;Co. Ltd. and Scotiabank (Cayman
    Islands) Ltd. (incorporated herein by reference to the exhibit
    filed as a part of our Form&nbsp;8-K dated February&nbsp;13,
    2003, Commission File No.&nbsp;0-25248)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.38*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Irrevocable Undertaking from Consolidated
    Water&nbsp;Co. Ltd. to Scotiabank (Cayman Islands) Ltd. in
    relation to Ocean Conversion (Cayman) Ltd. dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.39*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Irrevocable Undertaking from Consolidated
    Water&nbsp;Co. Ltd. to Scotiabank (Cayman Islands) Ltd. in
    relation to Waterfields Company Limited dated February&nbsp;7,
    2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.40*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee by DesalCo (Barbados) Ltd. in favour of
    Scotiabank (Cayman Islands) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.41*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee by DesalCo Limited in favour of
    Scotiabank (Cayman Islands) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between DesalCo
    Limited and Scotiabank (Cayman Islands) Ltd. with respect to the
    shares in Ocean Conversion (BVI)&nbsp;Limited dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between Consolidated
    Water&nbsp;Co. Ltd. and Scotiabank (Cayman Islands) Ltd. with
    respect to the shares in Ocean Conversion (Cayman) Ltd. dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.44*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between DesalCo
    Limited and Scotiabank (Cayman Islands) Ltd. with respect to the
    shares in DesalCo (Barbados) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.45*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between Consolidated
    Water&nbsp;Co. Ltd. and Scotiabank (Cayman Islands) Ltd. with
    respect to the shares in DesalCo Limited dated February&nbsp;7,
    2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.46*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Reimbursement Agreement for Letter of Guarantee
    from Consolidated Water Co. Ltd. to Scotiabank (Cayman Islands)
    Ltd. dated February&nbsp;5, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.47*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Substituted Debenture between
    Consolidated Water Co. Ltd. and Scotiabank (Cayman Islands) Ltd.
    dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG Chartered Accountants
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Deloitte&nbsp;&#38; Touche
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of PricewaterhouseCoopers
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (included on the signature page
    to this Form&nbsp;F-2)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">filed herein
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Item&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Undertakings</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to which the prospectus is sent or given, the
registrant&#146;s latest filing on Form&nbsp;20-F,
Form&nbsp;40-F, or Form&nbsp;10-K; and any filing on
Form&nbsp;10-Q, Form&nbsp;8-K or Form&nbsp;6-K incorporated by
reference into the prospectus.
</FONT>

<P align="center"><FONT size="2">II-5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">


<DIV align="center">
<B><FONT size="2">SIGNATURES</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form&nbsp;F-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized in Grand Cayman, Cayman Islands, on
April&nbsp;29, 2003.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">CONSOLIDATED WATER CO. LTD.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ JEFFREY M. PARKER
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Jeffrey M. Parker
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chairman and Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY AND SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We the undersigned officers and directors of
Consolidated Water Co. Ltd., hereby severally constitute and
appoint Jeffrey M. Parker and Fredrick W. McTaggart, or any one
of them, our true and lawful attorneys and agents, to do any and
all acts and things and to execute any and all instruments which
said attorneys and agents may deem necessary and advisable to
enable Consolidated Water Co. Ltd. to comply with the Securities
Act of 1933, and any rules, regulations and requirements of the
Securities and Exchange Commission in connection with this
registration statement, including, specifically, but without
limitation, to sign for us in our names in the capacities
indicated below, this registration statement, any and all
amendments and exhibits to this registration statement, and any
and all applications and other documents to be filed with the
Securities and Exchange Commission pertaining to the
registration of the securities covered hereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed below
by the following persons in the capacities and on the dates
indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">By:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ JEFFREY M. PARKER<BR>
    <HR size="1" noshade>Jeffrey M. Parker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board of Directors and Chief
    Executive Officer<BR>
    (Principal Executive Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ FREDERICK W. MCTAGGART<BR>
    <HR size="1" noshade>Frederick W. McTaggart
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director, President, Chief Operating Officer and
    Chief Financial Officer (Principal Financial and<BR>
    Accounting Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ PETER D. RIBBINS<BR>
    <HR size="1" noshade>Peter D. Ribbins
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director, Director&nbsp;&#151; Special Projects
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ J. BRUCE BUGG, JR.<BR>
    <HR size="1" noshade>J. Bruce Bugg, Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director and Vice Chairman of the Board of
    Directors
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ WILLIAM T. ANDREWS<BR>
    <HR size="1" noshade>William T. Andrews
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ BRIAN E. BUTLER<BR>
    <HR size="1" noshade>Brian E. Butler
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ STEVEN A. CARR<BR>
    <HR size="1" noshade>Steven A. Carr
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ RICHARD L. FINLAY<BR>
    <HR size="1" noshade>Richard L. Finlay
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ CLARENCE B. FLOWERS, JR.<BR>
    <HR size="1" noshade>Clarence B. Flowers, Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ WILMER PERGANDE<BR>
    <HR size="1" noshade>Wilmer Pergande
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ RAYMOND WHITTAKER<BR>
    <HR size="1" noshade>Raymond Whittaker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ CARSON K. EBANKS<BR>
    <HR size="1" noshade>Carson K. Ebanks
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">April&nbsp;29, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following exhibits were filed as part of this
Registration Statement.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Underwriting Agreement among Consolidated
    Water&nbsp;Co. Ltd. and the Underwriters
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Addendum dated February&nbsp;14, 2003 to Share
    Sale Agreement dated December&nbsp;16, 2002 between Consolidated
    Water&nbsp;Co. Ltd. and Bacardi&nbsp;&#38; Company Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Addendum dated March&nbsp;25, 2003 to Share Sale
    Agreement dated December&nbsp;16, 2002 between Consolidated
    Water&nbsp;Co. Ltd. and Bacardi&nbsp;&#38; Company Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion and Consent of Charles Adams, Ritchie and
    Duckworth
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Lease, dated March&nbsp;1, 2003, between
    Consolidated Water Co. Ltd. and Colmar LTD.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Profit Sharing Agreement
    dated as of February&nbsp;7, 2003 between Ocean Conversion
    (BVI)&nbsp;Ltd., DesalCo Limited, Consolidated Water Co. Ltd.
    and Sage Water Holdings (BVI) Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.28</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bank of Butterfield Commitment Letter dated
    January&nbsp;2, 2002 between Ocean Conversion (Cayman) Limited
    and the Bank of Butterfield
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bank of Butterfield Commitment Letter dated
    April&nbsp;10, 2002 between Ocean Conversion (BVI)&nbsp;Ltd. and
    the Bank of Butterfield
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Debenture dated May&nbsp;29, 2002 between Ocean
    Conversion (Cayman) Limited and the Bank of N.T.
    Butterfield&nbsp;&#38; Son Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Debenture dated July&nbsp;15, 2002 between Ocean
    Conversion (BVI) Ltd. and the Bank of
    N.T.&nbsp;Butterfield&nbsp;&#38; Son Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Indemnity of Consolidated Water&nbsp;Co.
    Ltd and North-American Mortgage&nbsp;&#38; Finance Corporation
    dated February&nbsp;7, 2003 relating to a Guarantee Provided by
    North-American Mortgage&nbsp;&#38; Finance Corporation in
    respect of the obligations of Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of North-American
    Mortgage&nbsp;&#38; Finance Corporation to The Bank of
    N.T.&nbsp;Butterfield&nbsp;&#38; Son dated May&nbsp;28, 2002
    regarding Ocean Conversion (BVI) Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Indemnity of Consolidated Water&nbsp;Co.
    Ltd and Edmund Gibbons Limited dated February&nbsp;7, 2003
    relating to Various Guarantees provided by Edmund Gibbons
    Limited in respect of the obligations of Ocean Conversion
    (Cayman) Limited and Ocean Conversion (BVI)&nbsp;Ltd.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of Edmund Gibbons Limited
    to The Bank of N.T.&nbsp;Butterfield&nbsp;&#38; Son Limited
    dated March&nbsp;5, 2002 regarding Ocean Conversion (Cayman)
    Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity of Edmund Gibbons Limited
    to The Bank of N.T.&nbsp;Butterfield&nbsp;&#38; Son dated
    May&nbsp;28, 2002 regarding Ocean Conversion (BVI)&nbsp;Limited
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Irrevocable Undertaking from Consolidated
    Water&nbsp;Co. Ltd. to Scotiabank (Cayman Islands) Ltd. in
    relation to Ocean Conversion (Cayman) Ltd. dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Irrevocable Undertaking from Consolidated
    Water&nbsp;Co. Ltd. to Scotiabank (Cayman Islands) Ltd. in
    relation to Waterfields Company Limited dated February&nbsp;7,
    2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee by DesalCo (Barbados) Ltd. in favour of
    Scotiabank (Cayman Islands) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.41</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee by DesalCo Limited in favour of
    Scotiabank (Cayman Islands) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between DesalCo
    Limited and Scotiabank (Cayman Islands) Ltd. with respect to the
    shares in Ocean Conversion (BVI)&nbsp;Limited dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between Consolidated
    Water&nbsp;Co. Ltd. and Scotiabank (Cayman Islands) Ltd. with
    respect to the shares in Ocean Conversion (Cayman) Ltd. dated
    February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.44</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between DesalCo
    Limited and Scotiabank (Cayman Islands) Ltd. with respect to the
    shares in DesalCo (Barbados) Ltd. dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Equitable Charge of Shares between Consolidated
    Water&nbsp;Co. Ltd. and Scotiabank (Cayman Islands) Ltd. with
    respect to the shares in DesalCo Limited dated February&nbsp;7,
    2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD><TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Reimbursement Agreement for Letter of Guarantee
    from Consolidated Water Co. Ltd. to Scotiabank (Cayman Islands)
    Ltd. dated February&nbsp;5, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deed of Substituted Debenture between
    Consolidated Water Co. Ltd. and Scotiabank (Cayman Islands) Ltd.
    dated February&nbsp;7, 2003
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of KPMG Chartered Accountants
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Deloitte&nbsp;&#38; Touche
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of PricewaterhouseCoopers
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (included on the signature page
    to this Form&nbsp;F-2)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>3
<FILENAME>g80228exv1w1.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>
                                                                     EXHIBIT 1.1

                         FORM OF UNDERWRITING AGREEMENT

                                1,767,662 SHARES

                           CONSOLIDATED WATER CO. LTD.

                                 ORDINARY SHARES

                               -------------------

                             UNDERWRITING AGREEMENT

                               -------------------

                                                      Philadelphia, Pennsylvania
                                                               ________ __, 2003

JANNEY MONTGOMERY SCOTT LLC
WELLS FARGO SECURITIES, LLC
As Representatives of the Several Underwriters Named in Schedule I hereto
c/o Janney Montgomery Scott LLC
1801 Market Street
Philadelphia, PA  19103

Ladies and Gentlemen:

                  Consolidated Water Co. Ltd., a Cayman Islands corporation
("CWCO"), proposes, subject to the terms and conditions stated herein, to sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), for
whom Janney Montgomery Scott LLC and Wells Fargo Securities, LLC are serving as
Representatives (the "Representatives"), an aggregate of 1,200,000 Ordinary
Shares, par value CI$1.00 per share (the "Ordinary Shares") of CWCO, and the
person named in Schedule II hereto (the "Selling Shareholder") proposes, subject
to the terms and conditions stated herein, to sell to the Underwriters an
aggregate of 567,662 Ordinary Shares. The Ordinary Shares to be sold to the
Underwriters by CWCO and the Selling Shareholder are referred to herein as the
"Firm Shares." The respective amounts of the Firm Shares to be purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto.
The Firm Shares shall be offered to the public at a public offering price of $__
per Firm Share (the "Offering Price").

                  In order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably in proportion to the
amounts set forth opposite their respective names in Schedule I

<PAGE>

hereto, for the Underwriters' own accounts up to 265,150 additional shares of
Ordinary Shares from CWCO. Such 265,150 additional shares of Ordinary Shares are
referred to herein as the "Optional Shares." If any Optional Shares are
purchased, the Optional Shares shall be purchased for offering to the public at
the Offering Price and in accordance with the terms and conditions set forth
herein. The Firm Shares and the Optional Shares are referred to collectively
herein as the "Shares."

                  CWCO, the Selling Shareholder and the Underwriters, intending
to be legally bound, hereby confirm their agreement as follows:

         1.       REPRESENTATIONS AND WARRANTIES OF CWCO. CWCO represents and
warrants to, and agrees with, the several Underwriters that:

                  (a)      CWCO has prepared, in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Regulations") of the Securities and Exchange
Commission (the "SEC") under the Act in effect at all applicable times, and has
filed with the SEC a registration statement on Form F-2 (File No. _______) and
one or more amendments thereto for the purpose of registering the Shares under
the Act. Copies of such registration statement and any amendments thereto, and
all forms of the related prospectus contained therein, have been delivered to
the Representatives. Any preliminary prospectus included in such registration
statement or filed with the SEC pursuant to Rule 424(a) of the Regulations is
hereinafter called a "Preliminary Prospectus." The various parts of such
registration statement, including all exhibits thereto and the information
contained in the form of a final prospectus filed with the SEC pursuant to Rule
424(b) of the Regulations in accordance with Section 6(a) of this Agreement and
deemed by virtue of Rule 424 of the Regulations to be part of the registration
statement at the time it was declared effective, each as amended at the time the
registration statement became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A of the Regulations, are hereinafter collectively called
the "Registration Statement." The final prospectus in the form included in the
Registration Statement or first filed with the SEC pursuant to Rule 424(b) of
the Regulations and any amendments or supplements thereto, including the
information (if any) deemed to be part of that prospectus at the time of
effectiveness pursuant to Rule 430A of the Regulations, is hereinafter called
the "Prospectus." All references to the Registration Statement, the Preliminary
Prospectus and the Prospectus include all documents incorporated therein by
reference. If CWCO has filed an abbreviated registration statement to register
additional Ordinary Shares pursuant to Rule 462(b) under the Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.

                  (b)      The Registration Statement has become effective under
the Act, and the SEC has not issued any stop order suspending the effectiveness
of the Registration Statement or preventing or suspending the use of the
Preliminary Prospectus, nor has the SEC instituted or, to the knowledge of CWCO,
threatened to institute proceedings with respect to such an order. For purposes
of this Agreement, "to the knowledge of CWCO," means the actual knowledge of
CWCO and/or any executive officer or director of CWCO, and an individual shall
be deemed to have "knowledge" of a particular fact, circumstance or other matter
if: (i) such person is actually aware of such fact or matter, or (ii) an
individual could have obtained such fact, circumstance or


                                       2

<PAGE>

other matter through a due inquiry concerning the truth or existence of such
fact, circumstance or other matter. No stop order suspending the sale of the
Shares in any jurisdiction designated by the Representatives as provided for in
Section 6(f) hereof has been issued, and no proceedings for that purpose have
been instituted or, to the knowledge of CWCO, threatened. CWCO has complied in
all material respects with all requests of the SEC, or requests of which CWCO
has been advised of any state or foreign securities commission in a state or
foreign jurisdiction designated by the Representatives as provided for in
Section 6(f) hereof, for additional information to be included in the
Registration Statement, any Preliminary Prospectus or the Prospectus. Each
Preliminary Prospectus conformed to all the requirements of the Act and the
Regulations as of its date in all material respects and did not as of its date
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, on the date on which it was declared
effective by the SEC (the "Effective Date") and when any post-effective
amendment thereof shall become effective, and the Prospectus, at the time it is
filed with the SEC including, if applicable, pursuant to Rule 424(b), and on the
Closing Date (as defined in Section 4 hereof) and any Option Closing Date (as
defined in Section 5(b) hereof), conformed and will conform in all material
respects to all the requirements of the Act and the Regulations, and did not and
will not, on any of such dates, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The two preceding sentences do not
apply to statements in or omissions from the Registration Statement or the
Prospectus based upon written information furnished to CWCO by or on behalf of
any Underwriter through the Representatives expressly for use therein or the
omission of any information regarding the Underwriters.

                  (c)      Any documents incorporated by reference into the
Prospectus pursuant to Item 6 of Form F-2 under the Act, at the time they were
filed with the SEC, complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended ("Exchange Act") and the
Exchange Act Regulations and did not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading.

                  (d)      There are no legal or governmental proceedings
pending or, to the knowledge of CWCO, threatened to which CWCO or any of its
subsidiaries is a party or to which any of the properties of CWCO or any
subsidiary are subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.

                  (e)      CWCO is a corporation duly organized, validly
existing and in good standing under the laws of the Cayman Islands, and has the
corporate power and authority to own or lease and operate its properties and to
conduct its current business as described in the Prospectus, and to execute,
deliver and perform this Agreement. Belize Water Limited, a corporation
incorporated in Belize ("Belize Water"), is a wholly owned subsidiary of CWCO.
Belize Water has been duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its incorporation, and has the
corporate power and authority to own or lease and operate its properties and to
conduct its current business. CWCO and Belize Water


                                       3

<PAGE>

are duly qualified to do business, and are in good standing, in all
jurisdictions in which such qualification is required, except where the failure
to so qualify would not have a material adverse effect on the general affairs,
properties, condition (financial or otherwise), results of operations,
shareholders' equity, business or prospects (collectively, the "Business
Conditions") of CWCO, Belize Water or, as applicable, the Acquired Companies (as
hereinafter defined).

                  (f)      DesalCo Limited ("DesalCo") is a company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. Ocean Conversion (Cayman) Limited ("OCC") is a company duly
organized, validly existing and in good standing under the laws of the Cayman
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. Ocean Conversion (BVI) Ltd. ("OCBVI") is a company duly organized,
validly existing and in good standing under the laws of the British Virgin
Islands, and has the corporate power and authority to own or lease and operate
its properties and to conduct its current business as described in the
Prospectus. DesalCo (Barbados) Ltd. ("DesalCo Barbados") is a company duly
organized, validly existing and in good standing under the laws of the Barbados,
and has the corporate power and authority to own or lease and operate its
properties and to conduct its current business as described in the Prospectus.
Waterfields Company Limited ("Waterfields," and together with DesalCo, DesalCo
Barbados, OCC and OCBVI, the "Acquired Companies") is a company duly organized,
validly existing and in good standing under the laws of the Bahamas, and has the
corporate power and authority to own or lease and operate its properties and to
conduct its current business as described in the Prospectus. The Acquired
Companies are each duly qualified to do business as foreign corporations, and
are in good standing, in all jurisdictions in which such qualification is
required, except where the failure to so qualify would not have a material
adverse effect on the Business Conditions of any Acquired Company. CWCO, Belize
Water and the Acquired Companies are hereinafter sometimes collectively referred
to as the "CWCO Group."

                  (g)      All of the outstanding shares of capital stock of
Belize Water have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by CWCO free and clear of all liens, encumbrances
and security interests, except as otherwise disclosed in the Prospectus; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or other rights to convert any obligations into shares of capital
stock or ownership interests in Belize Water or securities convertible into or
exchangeable for capital stock of, or other ownership interests in Belize Water
are outstanding, except as disclosed in the Prospectus. Neither CWCO, the
Acquired Companies nor Belize Water owns any stock or other interest whatsoever,
whether equity or debt, in any corporation, partnership or other entity other
than (i) CWCO's ownership of Belize Water, Cayman Water Company Limited,
Hurricane Hideaway Marine Ltd., Belize Water Services Ltd., Waterfields, OCC
and DesalCo; (ii) DesalCo's ownership of OCC, DesalCo Barbados and
Waterfields; and (iii) OCBVI's ownership of JVD Ocean Desalination Ltd.

                  (h)      All of the outstanding shares of capital stock of the
Acquired Companies have been duly authorized and validly issued, are fully paid
and non-assessable, and none of the outstanding shares of the Acquired
Companies' capital stock has been issued in violation of any preemptive rights
of any security holder of any of the Acquired Companies. All shares of the


                                       4

<PAGE>

Acquired Companies, that have been acquired by CWCO, are owned by CWCO free and
clear of all liens, encumbrances and security interests, except as otherwise
disclosed in the Prospectus; and no options, warrants or other rights to
purchase, agreements or other obligations to issue, or other rights to convert
any obligations into shares of capital stock or ownership interests in any of
the Acquired Companies or securities convertible into or exchangeable for
capital stock of, or other ownership interests in any of the Acquired Companies
are outstanding, except as disclosed in the Prospectus.

                  (i)      There are no legal or governmental proceedings
pending or, to the knowledge of CWCO, threatened to which any of the Acquired
Companies are a party or to which any of the properties of the Acquired
Companies are subject that are required to be described in the Registration
Statement or the Prospectus and are not so described, and there are no statutes,
regulations, contracts or other documents concerning the Acquired Companies that
are required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not described or
filed as required.

                  (j)      This Agreement has been duly authorized, executed and
delivered by CWCO and constitutes its legal, valid and binding obligation,
enforceable against CWCO in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to applicability of
general principles of equity and except, as to this Agreement, as rights to
indemnity and contribution may be limited by federal and state securities laws
or principles of public policy.

                  (k)      The execution, delivery and performance of this
Agreement and the transactions contemplated herein, do not and will not, with or
without the giving of notice or the lapse of time, or both, (i) conflict with
any term or provision of CWCO's or Belize Water's respective Amended and
Restated Memorandum of Association or Amended and Restated Articles of
Association or similar governing instruments; (ii) result in a breach of,
constitute a default under, result in the termination or modification of, result
in the creation or imposition of any lien, security interest, charge or
encumbrance upon any of the properties of CWCO or Belize Water or require any
payment by CWCO or Belize Water or impose any liability on CWCO or Belize Water
pursuant to, any contract, indenture, mortgage, deed of trust, commitment or
other agreement or instrument to which CWCO or Belize Water is a party or by
which any of their respective properties are bound or affected other than this
Agreement, except where such breach, default, modification, termination, lien,
security interest, charge, encumbrance, payment or liability could not
reasonably be expected to have a material adverse effect on the Business
Conditions of CWCO or Belize Water, taken as a whole; (iii) assuming compliance
with the rules of the National Association of Securities Dealers, Inc. (the
"NASD") applicable to the offer and sale of the Shares, violate any law, rule,
regulation, judgment, order or decree of any government or governmental agency,
instrumentality or court, domestic or foreign, having jurisdiction over CWCO or
Belize Water or any of their respective properties or businesses, except where
such violation could not reasonably be expected to have a material adverse
effect on the Business Conditions of CWCO or Belize Water, taken as a whole; or
(iv) result in a breach, termination or lapse of CWCO's or Belize Water's
corporate power and authority to own or lease and operate their respective
properties and conduct their respective businesses, except as disclosed in the
Prospectus.


                                       5

<PAGE>

                  (l)      The execution, delivery and performance of this
Agreement and the transactions contemplated herein, do not and will not, with or
without the giving of notice or the lapse of time, or both, (i) conflict with
any term or provision of the Acquired Companies' respective governing documents;
(ii) result in a breach of, constitute a default under, result in the
termination or modification of, result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties of the
Acquired Companies or require any payment by any of the Acquired Companies or
impose any liability on any of the Acquired Companies pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which any of the Acquired Companies is a party or by which any of their
respective properties are bound or affected, except where such breach, default,
modification, termination, lien, security interest, charge, encumbrance, payment
or liability could not reasonably be expected to have a material adverse effect
on the Business Conditions of CWCO or any of the Acquired Companies; (iii)
violate any law, rule, regulation, judgment, order or decree of any government
or governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over the Acquired Companies or any of their respective properties
or businesses, except where such violation could not reasonably be expected to
have a material adverse effect on the Business Conditions of CWCO or any of the
Acquired Companies; or (iv) result in a breach, termination or lapse of any of
the Acquired Companies' corporate power and authority to own or lease and
operate their respective properties and conduct their respective businesses,
except where such breach, termination or lapse could not reasonably be expected
to have a material adverse effect on the Business Conditions of CWCO or any of
the Acquired Companies.

                  (m)      At the date or dates indicated in the Prospectus,
CWCO had the duly authorized and outstanding capitalization set forth in the
Prospectus under the caption "Capitalization" and will have, as of the issuance
of the Firm Shares on the Closing Date, the as adjusted capitalization set forth
therein as of the date indicated in the Prospectus. On the Effective Date, the
Closing Date and any Option Closing Date, there will be no options or warrants
or other outstanding rights to purchase, agreements or obligations to issue or
agreements or other rights to convert or exchange any obligation or security
into, capital stock of CWCO, except as described in the Prospectus, or
securities convertible into or exchangeable for capital stock of CWCO, except as
described in the Prospectus or the grant of options after the date of the
Prospectus under option plans of CWCO. The information in the Prospectus insofar
as it relates to all outstanding options and other rights to acquire securities
of CWCO as of the dates referred to in the Prospectus is true and correct in all
material respects.

                  (n)      The currently outstanding shares of CWCO's capital
stock have been duly authorized and are validly issued, fully paid and
non-assessable, and none of such outstanding shares of CWCO's capital stock has
been issued in violation of any preemptive rights of any security holder of
CWCO. The holders of the outstanding shares of CWCO's capital stock are not
subject to personal liability solely by reason of being such holders. All
previous offers and sales of the outstanding shares of CWCO's capital stock made
by or on behalf of CWCO, whether described in the Registration Statement or
otherwise, were made in conformity with applicable federal, state and foreign
securities laws. The authorized capital stock of CWCO, including, without
limitation, the outstanding Ordinary Shares, the Shares being issued, and the
outstanding options to purchase Ordinary Shares conform in all material respects
with the


                                       6

<PAGE>

descriptions thereof in the Prospectus, and such descriptions conform in all
material respects with the instruments defining the same.

                  (o)      When the Shares have been duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly
issued, fully paid and non-assessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. The
certificates representing the Shares are in proper legal form under, and conform
in all respects to the requirements of, the laws of the Cayman Islands. Except
for the registration rights granted to R. Jerry Falkner ("Falkner") pursuant to
that certain Stock Option Agreement dated December 15, 1998 between CWCO and
Falkner, neither the filing of the Registration Statement nor the offering or
sale of Shares as contemplated by this Agreement gives any security holder of
CWCO any rights for or relating to the registration of any Ordinary Shares or
any other capital stock of CWCO or any rights to convert or have redeemed or
otherwise receive anything of value with respect to any other security of CWCO.

                  (p)      No consent, approval, authorization, order,
registration, license or permit of, or filing or registration with, any court,
government, governmental agency, instrumentality or other regulatory body or
official is required for the valid and legal execution, delivery and performance
by CWCO of this Agreement and the consummation of the transactions contemplated
hereby or described in the Prospectus, except (i) such as may be required for
the registration of the Shares under the Act, the Exchange Act, and for
compliance with the applicable state securities laws or the Bylaws, rules and
other pronouncements of the NASD, and (ii) as disclosed in the Prospectus.

                  (q)      The Ordinary Shares (including the Shares) are
registered pursuant to Section 12(g) of the Exchange Act. The issued and
outstanding Ordinary Shares are included for quotation on the Nasdaq National
Market. Neither CWCO nor, to CWCO's knowledge, any other person has taken any
action designed to cause, or likely to result in, the termination of the
registration of the Ordinary Shares under the Exchange Act. CWCO has not
received any notification that the SEC or the NASD is contemplating terminating
such registration or inclusion.

                  (r)      The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act or the Regulations, and there are no contracts,
agreements or other documents, instruments or transactions of any character
required to be described or referred to in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that have
not been so described, referred to or filed, as required.

                  (s)      Each contract or other instrument (however
characterized or described) to which CWCO, Belize Water and each Acquired
Company is a party or by which any of their respective properties or businesses
is bound or affected and which is material to the conduct of the CWCO Group's
business has been (i) duly and validly executed by CWCO, Belize Water and each
Acquired Company and, (ii) to the knowledge of CWCO, by the other parties
thereto. Each such contract or other instrument is in full force and effect and
is enforceable in all material respects against the parties thereto in
accordance with its terms, except as enforcement may be


                                       7

<PAGE>

limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to applicability of
general principles of equity, and neither CWCO, Belize Water nor any Acquired
Company is, and to the knowledge of CWCO, no other party thereto is, in default
thereunder, except where such default would not have a material adverse effect
on the Business Conditions of the CWCO Group, and no event has occurred that,
with the lapse of time or the giving of notice, or both, would constitute a
default under any such contract or other instrument. All necessary consents
under such contracts or other instruments to the disclosure in the Prospectus
with respect thereto have been obtained.

                  (t)      The consolidated financial statements of CWCO
(including the notes thereto) filed as part of any Preliminary Prospectus, the
Prospectus and the Registration Statement present fairly, in all material
respects, the financial position of CWCO as of the respective dates thereof, and
the results of operations and cash flows of CWCO for the periods indicated
therein, all in conformity with generally accepted accounting principles, except
as disclosed therein. The supporting notes included in the Registration
Statement fairly state in all material respects the information required to be
stated therein in relation to the financial statements taken as a whole. The
financial information included in the Prospectus under the captions "Prospectus
Summary - Summary Consolidated Financial Information," "Prospectus Summary -
Summary Pro Forma Financial Data," "Selected Consolidated Financial
Information," "Summary Pro Forma Financial Data," "Use of Proceeds" and
"Capitalization" presents fairly the information shown therein and has been
compiled on a basis consistent with that of the financial statements included in
the Registration Statement. The unaudited pro forma adjustments to financial
information included in the Registration Statement have been properly applied to
the historical amounts in the compilation of that information to reflect the
sale by CWCO and the Selling Shareholder of 1,767,662 Ordinary Shares offered
thereby at an assumed offering or actual price set forth in the Preliminary
Prospectus or the Prospectus, as the case may be, and the application of the
estimated net proceeds therefrom.

                  (u)      The combined financial statements of DesalCo, DesalCo
Barbados, OCC and OCCBVI (including the notes thereto) and the financial
statements of Waterfields (including the notes thereto) filed as part of any
Preliminary Prospectus, the Prospectus and the Registration Statement present
fairly, in all material respects, the financial position of each such Acquired
Company as of the respective dates thereof, and the results of operations and
cash flows of each such Acquired Company for the periods indicated therein, all
in conformity with generally accepted accounting principles, except as disclosed
therein. The supporting notes included in the Registration Statement fairly
state in all material respects the information required to be stated therein in
relation to the financial statements taken as a whole. The financial information
relating to each Acquired Company included in the Prospectus under the captions
"Prospectus Summary - Summary Consolidated Financial Information," "Prospectus
Summary - Summary Pro Forma Financial Data," "Selected Consolidated Financial
Information," and "Summary Pro Forma Financial Data," presents fairly the
information shown therein and has been compiled on a basis consistent with that
of the financial statements included in the Registration Statement.

                  (v)      Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, there has not been (i) any material adverse change (including,
whether or not insured against, any material loss or damage to any material
assets), or development involving a prospective material adverse change,


                                       8

<PAGE>

in the Business Conditions of CWCO, Belize Water or the business conditions of
the Acquired Companies; (ii) any material adverse change, loss, reduction,
termination or non-renewal of any material contract to which CWCO, Belize Water
or any Acquired Company is a party; (iii) any transaction entered into by CWCO,
Belize Water or any Acquired Company not in the ordinary course of its business
that is material to CWCO, Belize Water or any Acquired Company; (iv) any
dividend or distribution of any kind declared, paid or made by CWCO on its
capital stock, except for and to the extent described in the Prospectus; (v) any
liabilities or obligations, direct or indirect, incurred by CWCO, Belize Water
or any Acquired Company that are material to CWCO, Belize Water or any Acquired
Company other than the issuance of shares pursuant to the exercise of options or
the grant of options under CWCO's stock option plans; (vi) any change in the
capitalization of CWCO, Belize Water or any Acquired Company; or (vii) any
change in the indebtedness of CWCO, Belize Water or any Acquired Company that is
material to the CWCO Group. CWCO, Belize Water and the Acquired Companies have
no contingent liabilities or obligations that are material to the CWCO Group
that are not expressly disclosed in the Prospectus.

                  (w)      CWCO has not distributed, and will not distribute,
any offering material in connection with the offering and sale of the Shares
other than the Registration Statement, a Preliminary Prospectus, the Prospectus
and other material, if any, permitted by the Act and the Regulations. Except for
the letter agreement dated March 21, 2002 between CWCO and Janney Montgomery
Scott LLC, neither CWCO nor any of its officers, directors or affiliates has
(i)taken, nor shall CWCO or such persons take, directly or indirectly, any
action designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Ordinary Shares, or (ii) since
the filing of the Registration Statement (A) sold, bid for, purchased or paid
anyone any compensation for soliciting purchases of, the Shares or (B) paid or
agreed to pay to any person any compensation for soliciting another to purchase
any other securities of CWCO.

                  (x)      CWCO, Belize Water and each Acquired Company has
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all material tax
returns that are required to be filed or have duly obtained extensions of time
for the filing thereof and have paid all taxes shown on such returns or
otherwise due and all material assessments received by them to the extent that
the same have become due, other than those being contested in good faith and for
which adequate reserves have been provided. CWCO, Belize Water and each Acquired
Company has not executed or filed with any taxing authority, foreign or
domestic, any agreement extending the period for assessment or collection of any
income or other tax and none of them is a party to any pending action or
proceeding by any foreign or domestic governmental agency for the assessment or
collection of taxes, and no claims for assessment or collection of taxes have
been asserted against CWCO, Belize Water or any Acquired Company that might
materially adversely affect the Business Conditions of the CWCO Group.

                  (y)      To the knowledge of CWCO, KPMG Cayman Islands
("KPMG") which has given its report on certain financial statements included as
part of the Registration Statement, is a firm of independent certified public
accountants as required by the Act and the Regulations with respect to CWCO.


                                       9

<PAGE>

                  (z)      None of CWCO, Belize Water or any Acquired Company is
in violation of, or in default under, any of the terms or provisions of (i) its
Amended and Restated Memorandum of Association or Amended and Restated Articles
of Association or similar governing instruments and (ii) except where any such
default would not reasonably be expected to have a material adverse effect on
the Business Conditions of the CWCO Group, (A) any indenture, mortgage, deed of
trust, contract, commitment or other agreement or instrument to which it is a
party or by which it or any of its assets or properties is bound or affected,
(B) any law, rule, regulation, judgment, order or decree of any government or
governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over it or any of its properties or business, or (C) any license,
permit, certification, registration, approval, consent or franchise.

                  (aa)     Except as expressly disclosed in the Prospectus,
there are no claims, actions, suits, protests, proceedings, arbitrations,
investigations or inquiries pending before, or, to CWCO's knowledge, threatened
or contemplated by, any governmental agency, instrumentality, court or tribunal,
domestic or foreign, or before any private arbitration tribunal to which CWCO,
Belize Water or any Acquired Company is or may be made a party that could
reasonably be expected to affect the validity of any of the outstanding Ordinary
Shares, or that, if determined adversely to CWCO, Belize Water or any Acquired
Company would, in any case or in the aggregate, result in any material adverse
change in the Business Conditions of the CWCO Group, nor, to CWCO's knowledge,
is there any reasonable basis for any such claim, action, suit, protest,
proceeding, arbitration, investigation or inquiry. There are no outstanding
orders, judgments or decrees of any court, governmental agency, instrumentality
or other tribunal enjoining CWCO, Belize Water or any Acquired Company from, or
requiring CWCO, Belize Water or any Acquired Company to take or refrain from
taking, any action, or to which CWCO, Belize Water or any Acquired Company or
their properties, assets or businesses are bound or subject, except for such
orders, judgments or decrees which would not have a material adverse effect on
the Business Conditions of the CWCO Group.

                  (bb)     Each of CWCO, Belize Water and the Acquired Companies
owns, or possesses adequate rights to use, or can acquire on reasonable terms,
all patents, patent applications, trademarks, trademark registrations,
applications for trademark registration, trade names, service marks, licenses,
inventions, copyrights, know-how (including any unpatented and/or unpatentable
proprietary or confidential technology, information, systems, design
methodologies and devices or procedures developed or derived from or for CWCO's,
Belize Water's or each Acquired Company's business), trade secrets, confidential
information, processes and formulations and other proprietary information
necessary for, used in, or proposed to be used in, the conduct of the business
of CWCO, Belize Water and each Acquired Company as described in the Prospectus
(collectively, the "Intellectual Property"), except where the failure to own or
possess or otherwise be able to acquire such Intellectual Property would not
have a material adverse effect on the Business Conditions of the CWCO Group. To
CWCO's knowledge, none of CWCO, Belize Water or any Acquired Company has
infringed, is infringing nor have received any notice of conflict with, the
asserted rights of others with respect to the Intellectual Property that,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could materially adversely affect the Business Conditions of
CWCO, Belize Water or any Acquired Company, and CWCO knows of no reasonable
basis therefor. To the actual knowledge of CWCO, no other parties have infringed
upon or are in conflict with any Intellectual Property. None of CWCO, Belize
Water or any Acquired Company is a party to, or


                                       10

<PAGE>

bound by, any agreement pursuant to which royalties, honorariums or fees are
payable by CWCO, Belize Water or any Acquired Company as the case may be to any
person by reason of the ownership or use of any Intellectual Property.

                  (cc)     Each of CWCO, Belize Water and the Acquired Companies
has good and marketable title to all property described in the Prospectus as
being owned by it, free and clear of all liens, security interests, charges or
encumbrances and the like, except such as are expressly described or referred to
in the Prospectus or such as do not materially adversely affect the Business
Conditions or the conduct of the business of CWCO, Belize Water and the Acquired
Companies, as described in the Prospectus. Each of CWCO, Belize Water and the
Acquired Companies has insured its property against loss or damage by fire,
hurricane or other casualty, in amounts reasonably believed by CWCO to be
adequate, and maintains insurance against such other risks as management of CWCO
deems appropriate. All real and personal property leased by CWCO, Belize Water
and the Acquired Companies as described or referred to in the Prospectus, is
held by CWCO, Belize Water and the Acquired Companies, as applicable, under
valid leases, except where the invalidity of any lease would have a material
adverse effect on the Business Conditions of the CWCO Group. The executive
offices and facilities of CWCO, Belize Water and the Acquired Companies (the
"Premises"), and all operations presently or formerly conducted thereon by CWCO,
Belize Water or the Acquired Companies or any predecessors thereof, are now and,
since CWCO or Belize Water began to use such Premises, always have been and, to
the knowledge of CWCO prior to when CWCO or Belize Water began to use such
Premises, always had been, in compliance with all statutes, ordinances,
regulations, rules, standards and requirements of common law applicable to the
areas in which CWCO, Belize Water and the Acquired Companies provide service
concerning or relating to industrial hygiene and the protection of health and
the environment (collectively, the "Environmental Laws"), except to the extent
that any failure in such compliance would not materially adversely affect the
Business Conditions of CWCO, Belize Water or the Acquired Companies. To the
knowledge of CWCO, the facilities of CWCO, Belize Water and the Acquired
Companies produce water of sufficient quality and quantity to supply the current
and planned customers and service areas of CWCO, Belize Water and the Acquired
Companies, and are not subject to any restriction on water processing under any
law, regulation, rule, order or permit, except as expressly described in the
Prospectus and such as do not materially adversely affect the Business
Conditions or the conduct of the business of CWCO, Belize Water or the Acquired
Companies, as described in the Prospectus. To the knowledge of CWCO, there are
no conditions on, about, beneath or arising from the Premises, in close
proximity to the Premises or at any other location that might give rise to
liability or the imposition of a statutory lien under any of the Environmental
Laws, or affect the quality of the water processed by CWCO, Belize Water or the
Acquired Companies, and that would materially adversely affect the Business
Conditions of CWCO, Belize Water or the Acquired Companies, except as described
in the Prospectus. Except as expressly disclosed in the Prospectus, or which
will not materially adversely affect the Business Conditions of CWCO (i) none of
CWCO, Belize Water or any Acquired Company has received notice or has knowledge
of any claim, demand, investigation, regulatory action, suit or other action
instituted or threatened against CWCO, Belize Water or any Acquired Company or
any portion of the Premises or any parcel in close proximity to the Premises
relating to any of the Environmental Laws and (ii) none of CWCO, Belize Water or
any Acquired Company has received any notice of material violation, citation,
complaint, order, directive, request for information or response thereto, notice
letter, demand letter or compliance schedule to or from any governmental or


                                       11

<PAGE>

regulatory agency arising out of or in connection with "hazardous substances"
(as defined by applicable Environmental Laws) on, about, beneath, arising from
or generated at the Premises, near the Premises or at any other location.

                  (dd)     Each of CWCO, Belize Water and the Acquired Companies
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

                  (ee)     CWCO, Belize Water, and the Acquired Companies and
their respective affiliates (the "Employers") have established, maintain,
contribute to, are required to contribute to, are a party to, or are bound by
contractual commitments with respect to, certain pension, retirement, or
profit-sharing plans, deferred compensation, bonus, or other incentive plans, or
medical, vision, dental, or other health and welfare benefit plans, or life
insurance or disability plans, or any other employee benefit plans, programs,
arrangements, agreements, or understandings (the "Plans").

                  With respect to each of the Plans:

                           (i)      The terms of each of the Plans are in
writing, and each of the Plans has been maintained and administered in
accordance with its terms and any applicable collective bargaining agreements.

                           (ii)     Each of the Plans has been maintained and
administered in compliance with all regulations, rules, standards and
requirements of the common law or the law of the Cayman Islands, the Bahamas,
Belize, Barbados and the British Virgin Islands thereof concerning the
establishment, funding, taxation and administration of such Plans, including
without limitation any such laws governing the conduct of the trustees,
fiduciaries or administrators of such Plans (collectively, the "Employee
Benefits Laws") except to the extent any failure in such compliance would not
adversely affect the Business Conditions of CWCO, Belize Water or any of the
Acquired Companies. None of the Plans are subject to the Employee Retirement
Income Security Act of 1974 as amended ("ERISA").

                           (iii)    None of the Plans is a defined benefit
pension plan, under which the Employer is obligated to fund, or contribute to
the funding of, the payment of a defined retirement benefit based on an
employee's accumulated compensation, service or other factors.

                           (iv)     None of the Plans provides retiree life or
retiree health insurance, except as may be required by applicable Employee
Benefits laws.

                           (v)      There are no actions, suits or claims (other
than routine claims for benefits in the ordinary course) pending or, to CWCO's
knowledge, threatened, and to CWCO's best knowledge, there are no facts which
could give rise to any such actions, suits or claims (other than routine claims
for benefits in the ordinary course).


                                       12

<PAGE>

                           (vi)     All contributions and/or insurance premiums
required to be paid as of the Closing Date by the Employers with respect to such
Plans have been paid.

                           (vii)    The Employers have made all disclosures to
participants and governmental authorities, including tax filings as applicable,
with respect to such Plans as may be required by applicable Employee Benefits
law.

                  (ff)     No labor dispute exists with CWCO's, Belize Water's
or the Acquired Companies' employees, and to CWCO's knowledge, no such labor
dispute is threatened. CWCO has no knowledge of any existing or threatened labor
disturbance by the employees of any of the principal suppliers, contractors or
customers of CWCO, Belize Water or the Acquired Companies that would materially
adversely affect the Business Conditions of CWCO Group. None of CWCO's, Belize
Water's or the Acquired Companies' employees is covered by a collective
bargaining agreement and no union organizing activity exists with respect to any
of such employees.

                  (gg)     Neither CWCO, Belize Water nor any one of the
Acquired Companies has incurred any liability for any finder's fees or similar
payments in connection with the transactions contemplated herein other than as
disclosed in the Prospectus.

                  (hh)     CWCO is familiar with the Investment Company Act of
1940, as amended (the "1940 Act"), and the rules and regulations thereunder, and
has in the past conducted, and CWCO intends to conduct, its affairs in such a
manner as to ensure that it will not be an "investment company" or an entity "
controlled" by an investment company within the meaning of the 1940 Act and the
rules and regulations thereunder.

                  (ii)     CWCO, Belize Water and each Acquired Company has
received all permits, licenses, franchises, authorizations, registrations,
qualifications and approvals (collectively, "Permits") of governmental or
regulatory authorities as may be required of them to own their properties and
conduct their businesses in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus, except to the extent
that failure to receive such Permits would not have a material adverse effect on
the Business Conditions of CWCO Group; and CWCO, Belize Water and each Acquired
Company has fulfilled and performed all of their material obligations with
respect to such Permits, and no event has occurred which allows or, after notice
or lapse of time or both, would allow revocation or termination thereof or
result in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualifications as may be set forth in the
Prospectus; and, except as described in the Prospectus, such Permits contain no
restrictions that materially affect the ability of CWCO, Belize Water and each
Acquired Company to conduct their businesses.

                  (jj)     No statement, representation, warranty or covenant
made by CWCO in this Agreement or in any certificate or document required by
this Agreement to be delivered to the Representatives is, or as of the Closing
Date or any Option Closing Date will be, inaccurate, untrue or incorrect in any
material respect. No transaction has occurred or is proposed between or among
CWCO and any of its officers, directors or stockholders or any affiliate of the
foregoing, or any affiliate of the


                                       13

<PAGE>

foregoing that is required to be described in and is not described in the
Registration Statement and the Prospectus.

                  (kk)     None of CWCO, Belize Water or any officer, director,
employee, partner, agent or other person acting on behalf of CWCO or Belize
Water or any Acquired Company or any officer, director, employee, partner, agent
or other person acting on behalf of such Acquired Company has, directly or
indirectly, given or agreed to give any money, property or similar benefit or
consideration to any customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any agency or
instrumentality of any government (foreign or domestic) or political party or
candidate for office (foreign or domestic) or any other person who was, is or in
the future may be in a position to affect the Business Conditions of the CWCO
Group, or any actual or proposed business transaction of CWCO, Belize Water or
any Acquired Company, as the case may be that (i) could subject CWCO, Belize
Water or any Acquired Company to any liability (including, but not limited to,
the payment of monetary damages) or penalty in any civil, criminal or
governmental action or proceeding that would have a material adverse effect on
the Business Conditions of the CWCO Group, or (ii) with respect to CWCO, Belize
Water or any Acquired Company or any officer or director thereof, violates any
law, rule or regulation to which CWCO, Belize Water or any Acquired Company is
subject.

                  Any certificate signed by any officer of CWCO, Belize Water or
any Acquired Company in such capacity and delivered to the Representatives or to
counsel for the Underwriters pursuant to this Agreement shall be deemed a
representation and warranty by CWCO, Belize Water or such Acquired Company as
the case may be, to the several Underwriters as to the matters covered thereby.

         2.       REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER. The
Selling Shareholder represents and warrants to each Underwriter that:

                  (a)      The Selling Shareholder now has, and on the Closing
Date and any Option Closing Date will have, good and marketable title to the
Shares to be sold by the Selling Shareholder, free and clear of any lien, claim,
security interest or other encumbrance, including, without limitation, any
restriction on transfer.

                  (b)      The Selling Shareholder now has, and on the Closing
Date and any Option Closing Date will have, full legal right, power and
authorization, and any approval required by law, to sell, assign, transfer and
deliver such Shares in the manner provided in this Agreement, and upon delivery
of and payment for such Shares hereunder, the several Underwriters will acquire
good and marketable title to such Shares free and clear of any lien, claim,
security interest, or other encumbrance.

                  (c)      This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid and
binding agreement of the Selling Shareholder enforceable against the Selling
Shareholder in accordance with its terms.

                  (d)      Neither the execution and delivery of this Agreement
by or on behalf of the Selling Shareholder nor the consummation of the
transactions herein or therein contemplated


                                       14

<PAGE>

by or on behalf of the Selling Shareholder requires any consent, approval,
authorization or order of, or filing or registration with, any court, regulatory
body, administrative agency or other governmental body, agency or official
(except such as may be required under the Act or such as may be required under
state securities laws governing the purchase and distribution of the Shares) or
conflicts or will conflict with or constitutes or will constitute a breach of,
or default under, or violates or will violate, any agreement, indenture or other
instrument to which the Selling Shareholder is a party or by which the Selling
Shareholder is or may be bound or to which the Selling Shareholder's property or
assets is subject, or any statute, law, rule, regulation, ruling, judgment,
injunction, order or decree applicable to the Selling Shareholder or to any
property or assets of the Selling Shareholder.

                  (e)      The Registration Statement and the Prospectus,
insofar as they relate to the Selling Shareholder, do not and will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.

                  (f)      The Selling Shareholder does not have any actual
knowledge or any reason to believe that the Registration Statement or the
Prospectus (or any amendment or supplement thereto) contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.

                  (g)      The representations and warranties of the Selling
Shareholder in this Agreement are, and on the Closing Date and any Option
Closing Date will be, true and correct.

                  (h)      The Selling Shareholder has not taken, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Ordinary Shares
to facilitate the sale or resale of the Shares, except as described in the
Prospectus.

         3.       PURCHASE AND SALE OF FIRM SHARES. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein, CWCO and the Selling
Shareholder shall sell the Firm Shares to the several Underwriters at the
Offering Price less the Underwriting Discounts and Commissions shown on the
cover page of the Prospectus, and the Underwriters, severally and not jointly,
shall purchase from CWCO and the Selling Shareholder on a firm commitment basis,
at the Offering Price less the Underwriting Discounts and Commissions shown on
the cover page of the Prospectus, the respective amounts of the Firm Shares set
forth opposite their names on Schedule I hereto. Except as provided in Sections
5 and 13 hereof, the agreement of each Underwriter is to purchase only that
number of Shares specified with respect to that Underwriter in Schedule I
hereto. The Underwriters shall offer the Shares to the public as set forth in
the Prospectus.

         4.       PAYMENT AND DELIVERY. The Firm Shares shall be issued in the
form of one or more fully registered global securities (the "Global Securities")
in book-entry form in such denominations and registered in the name of the
nominee of The Depository Trust Company ("DTC") or in such names as the
Representatives may request upon at least 48 hours' prior notice to CWCO, and
shall be delivered by or on behalf of CWCO and the Selling Shareholder to


                                       15

<PAGE>

the Representatives for the account of such Underwriter, against payment by such
Underwriter on its behalf of the purchase price therefor by wire transfer of
immediately available funds to such accounts as CWCO and the Selling Shareholder
shall designate in writing (with all costs and expenses incurred by the
Underwriters in connection with such settlement in immediately available funds,
including, but not limited to, interest or cost of funds and expenses, to be
borne by CWCO and the Selling Shareholder). The closing of the sale and purchase
of the Firm Shares shall be held at the offices of Ballard Spahr Andrews &
Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania for the
respective accounts of the Underwriters. Such payment and delivery will be made
at 10:00 a.m., Philadelphia, Pennsylvania time, on the third business day after
the date of this Agreement, or at such other time on the same or such other
date, not later than seven business days thereafter as shall be designated in
writing by the Representatives. Such time and date are referred to herein as the
"Closing Date." CWCO and the Selling Shareholder shall make the Global
Securities representing the Firm Shares available for examination by the
Representatives and counsel for the Underwriters at the Philadelphia
correspondent office of CWCO's transfer agent not less than one full business
day prior to the Closing Date.

         5.       OPTION TO PURCHASE OPTIONAL SHARES.

                  (a)      For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, subject to the terms and conditions herein set forth, the
several Underwriters are hereby granted an option by CWCO to purchase all or any
part of the Optional Shares (the "Over-allotment Option"). The purchase price to
be paid for the Optional Shares shall be the Offering Price less the
Underwriting Discounts and Commissions shown on the cover page of the
Prospectus. The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters as to all or any part of
the Optional Shares at any time and from time to time within 30 days after the
date of the Prospectus. No Underwriter shall be under any obligation to purchase
any Optional Shares prior to an exercise of the Over-allotment Option.

                  (b)      The Over-allotment Option granted hereby may be
exercised by the Representatives on behalf of the several Underwriters by giving
notice to CWCO by a letter sent by telex, telegraph, telegram or facsimile (such
notice to be effective when received), addressed as provided in Section 15
hereof, setting forth the number of Optional Shares to be purchased, the date
and time for delivery of and payment for the Optional Shares and stating that
the Optional Shares referred to therein are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Shares. If such notice is given at least two full business days prior to
the Closing Date, the date set forth therein for such delivery and payment shall
be not earlier than the Closing Date. If such notice is given after two full
business days prior to the Closing Date, the date set forth therein for such
delivery and payment shall be a date selected by the Representatives not later
than five full business days after the exercise of the Over-allotment Option.
The date and time set forth in such a notice is referred to herein as an "Option
Closing Date," and a closing held pursuant to such a notice is referred to
herein as an "Option Closing." Upon each exercise of the Over-allotment Option,
and on the basis of the representations, warranties, covenants and agreements
herein contained, and subject to the terms and conditions herein set forth, the
several Underwriters shall become severally, but not jointly, obligated to
purchase from CWCO the number of Optional Shares specified in each notice of


                                       16

<PAGE>

exercise of the Over-allotment option (allocated among them in accordance with
Section 5(c) hereof).

                  (c)      The number of Optional Shares to be purchased by each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule I hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters").

                  (d)      The Optional Shares shall be issued in the form of
one or more Global Securities in book-entry form in such denominations and
registered in the name of the nominee of DTC or in such names as the
Representatives may request upon at least 48 hours' prior notice to CWCO, and
shall be delivered by or on behalf of CWCO to the Representatives for the
account of such Underwriter, against payment by such Underwriter on its behalf
of the purchase price therefor by wire transfer of immediately available funds
to such accounts as CWCO shall designate in writing (with all costs and expenses
incurred by the Underwriters in connection with such settlement in immediately
available funds, including, but not limited to, interest or cost of funds and
expenses, to be borne by CWCO). The closing of the sale and purchase of the
Optional Shares shall be held at the offices of Ballard Spahr Andrews &
Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania for the
respective accounts of the Underwriters. Such payment and delivery will be made
at 10:00 a.m., Philadelphia, Pennsylvania time, on the Option Closing Date. CWCO
shall make the Global Securities representing the Optional Shares available for
examination by the Representatives and counsel for the Underwriters at the
Philadelphia correspondent office of CWCO's transfer agent not less than one
full business day prior to the Option Closing Date.

         6.       CERTAIN COVENANTS AND AGREEMENTS OF CWCO. CWCO covenants and
agrees with the several Underwriters as follows:

                  (a)      If Rule 430A of the Regulations is employed, CWCO
will timely file the Prospectus pursuant to and in compliance with Rule 424(b)
of the Regulations and will advise the Representatives of the time and manner of
such filing.

                  (b)      CWCO will not file with the SEC, the Prospectus, any
amendment or supplement to the Prospectus or any amendment to the Registration
Statement, unless the Representatives have been advised or to which the
Representatives shall reasonably object after being so advised, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. Upon reasonable request of the
Representatives or counsel for the Underwriters, CWCO will promptly prepare and
file with the SEC, in accordance with the Regulations of the SEC, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of the
Shares by the several Underwriters and will use its best


                                       17

<PAGE>

efforts to cause any such amendment to the Registration Statement to be declared
effective as promptly as possible. If required, CWCO will file any amendment or
supplement to the Prospectus with the SEC in the manner and within the time
period required by Rule 424(b) under the Act. CWCO will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereof has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence to the Representatives of each filing or
effectiveness.

                  (c)      CWCO will advise the Representatives immediately, and
confirm such advice in writing, (i) when any post-effective amendment to the
Registration Statement is filed with the SEC under Rule 462(c) under the Act or
otherwise, (ii) any Rule 462(b) Registration Statement is filed, (iii) of the
receipt of any comments from the SEC concerning the Registration Statement,
((iv) when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (v) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (vi)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vii) during the period noted in clause (vi) above, of
the need to amend the Registration Statement or supplement the Prospectus to
comply with the Act, (viii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, and (ix) of the suspension of the qualification of any of the Shares
for offering or sale in any jurisdiction in which the Underwriters intend to
make such offers or sales, or the initiation or threatening of any proceedings
for any of such purposes known to CWCO. CWCO will use its best efforts to
prevent the issuance of any such stop order or of any order preventing or
suspending such use, and if any such order is issued, to obtain as soon as
possible the lifting thereof.

                  (d)      CWCO has delivered to the Representatives, without
charge, as many copies of each Preliminary Prospectus as the Representatives
have reasonably requested. CWCO will deliver to the Representatives, without
charge, from time to time during the period when delivery of the Prospectus is
required under the Act, such number of copies of the Prospectus (as supplemented
or amended) as the Representatives may reasonably request. CWCO hereby consents
to the use of such copies of the Preliminary Prospectus and the Prospectus for
purposes permitted by the Act, the Regulations and the securities laws of the
states or foreign jurisdictions in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. CWCO has furnished or will furnish to the
Representatives at least one original signed copy of the Registration Statement
as originally filed and of all amendments and supplements thereto, whether filed
before or after the Effective Date, at least one copy of all exhibits filed
therewith and of all consents and certificates of experts, and will deliver to
the Representatives such number of conformed copies of the Registration
Statement, including financial statements and exhibits, and all amendments
thereto, as the Representatives may reasonably request.


                                       18

<PAGE>

                  (e)      CWCO will comply with the Act, the Regulations, the
Exchange Act and the Exchange Act Regulations so as to permit the continuance of
sales of and dealings in the Shares for as long as may be necessary to complete
the distribution of the Shares as contemplated hereby.

                  (f)      CWCO will furnish such information and pay such
filing fees and other expenses as may be required, including reasonable legal
fees which such legal fees shall not exceed $____________ and otherwise
cooperate in the registration or qualification of the Shares, or exemption
therefrom, for offering and sale by the several Underwriters and by dealers
under the securities laws of such jurisdictions in which the Representatives
determine to offer the Shares, after consultation with CWCO, and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided, however, that no
such qualification shall be required in any jurisdiction where, solely as a
result thereof, CWCO would be subject to taxation or qualification as a foreign
corporation doing business in such jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject. CWCO will, from time to time,
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for so long a period as is required under
the laws of such jurisdictions for such offering and sale. CWCO will furnish
such information and pay such filing fees and other expenses as may be required,
and otherwise cooperate in the inclusion of the Shares for quotation on the
Nasdaq National Market. CWCO will, from time to time, prepare and file such
statements and reports as are or may be required to continue such qualification
in effect for a period of three years from the Effective Date.

                  (g)      Subject to Section 6(b) hereof, in case of any event
(occurring at any time within the period during which, in the opinion of counsel
for the Underwriters, a prospectus is required to be delivered under the Act or
the Regulations), as a result of which any Preliminary Prospectus or the
Prospectus, as then amended or supplemented, would contain, in the opinion of
counsel for the Underwriters, an untrue statement of a material fact, or omit to
state any material fact necessary in order to make the statements therein not
misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act or the Regulations or any
applicable securities laws, CWCO promptly will prepare and file with the SEC,
and any applicable state and foreign securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters such number of
copies of such amendments, supplements or documents (in form and substance
satisfactory to the Representatives and counsel for the Underwriters) as the
Representatives may reasonably request. For purposes of this Section 6(g), CWCO
will provide such information to the Representatives, the Underwriters' counsel
and counsel to CWCO as shall be necessary to enable such persons to consult with
CWCO with respect to the need to amend or supplement the Registration Statement,
Preliminary Prospectus or Prospectus or file any document, and shall furnish to
the Representatives and the Underwriters' counsel such further information as
each may from time to time reasonably request.

                  (h)      CWCO will make generally available to its security
holders not later than 45 days after the end of the fiscal quarter first
occurring after the first anniversary of the


                                       19

<PAGE>

Effective Date, an earnings statement of CWCO (which need not be audited unless
required by the Act or the Regulations) that shall comply with Section 11(a) of
the Act and Rule 158 thereunder and cover a period of at least 12 consecutive
months.

                  (i)      For a period of three years from the Effective Date,
CWCO will deliver to the Representatives and, upon request, to each of the
Underwriters: ((i) a copy of each report or document, including, without
limitation, reports on Forms 6-K, 8-K, 20-F, 10-K and 10-Q (or such similar
forms as may be designated by the SEC), registration statements and any exhibits
thereto, filed or furnished to the SEC or any securities exchange or the NASD,
promptly after the date each such report or document is so filed or furnished;
(ii) as soon as practicable, copies of any reports or communications (financial
or other) of CWCO mailed to its security holders; and (iii) every material press
release in respect of CWCO or its affairs that is released or prepared by CWCO.

                  (j)      During the course of the distribution of the Shares,
CWCO and its Subsidiaries will not and CWCO shall cause its officers and
directors not to, (i) take, directly or indirectly, any action designed to, or
that could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock or ((ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of, the Shares.

                  (k)      CWCO has caused each person listed on Schedule III
hereto to execute an agreement (a "Lock-up Agreement") in form and substance
satisfactory to the Representatives and the Underwriters' counsel which provides
that from the date of the Lock-up Agreement and for a period of 120 days from
the Effective Date, such persons will not, without the prior written consent of
the Representatives, directly or indirectly, sell, offer or contract to sell,
pledge, grant any option for sale or purchase of, agree to sell or otherwise
dispose of (collectively, "Disposition") any Ordinary Shares (or any securities
convertible into or exercisable or exchangeable for any shares of Ordinary
Shares) beneficially owned by such persons now or on the Effective Date, or with
respect to which such persons now or on the Effective Date has the power of
Disposition, or enter into a transaction which would have the same effect, or
enter into any swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of Common Stock, whether any
such aforementioned transaction is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise, or publicly disclose the intention
to make any such Disposition, or enter into any such transaction, swap, hedge or
other arrangement. The foregoing agreement shall not apply to (i) bona fide
gifts of securities provided, the recipient of such gift or contribution agrees
in writing as a condition precedent to such gift or contribution to be bound by
the terms thereof, or (ii) transfers of securities to affiliates of the
transferor if the transfers do not involve a public distribution or public
offering and provided, the transferee agrees in writing as a condition precedent
to such transfer to be bound by the terms thereof. CWCO has delivered such
agreements to the Representatives prior to the date of this Agreement.
Appropriate stop transfer instructions will be issued by CWCO to the transfer
agent for the Ordinary Shares and a copy of such instructions will be delivered
to the Representatives.

                  (l)      As of the date of the Lock-up Agreement and for a
period of 120 days after the Effective Date, CWCO will not, without the prior
written consent of the Representatives, issue or make a Disposition of any
Ordinary Shares or any securities convertible


                                       20

<PAGE>

into or exercisable or exchangeable for any Ordinary Shares or enter into a
transaction which would have the same effect or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of Ordinary Shares, whether any such aforementioned
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or publicly disclose the intention to issue or
make any such Disposition or enter into any such transaction, swap, hedge or
other arrangement, except ((i) the issuance of Ordinary Shares upon the exercise
of currently outstanding options and warrants as described in the Registration
Statement and (ii) the grant of options to purchase Ordinary Shares under CWCO's
currently outstanding stock option plans and the issuance of Ordinary Shares
upon the exercise thereof and (iii) the issuance of redeemable preferred stock
under CWCO's Employee Share Incentive Plan. The foregoing agreement shall not
apply to (i) bona fide gifts of securities provided, the recipient of such gift
or contribution agrees in writing as a condition precedent to such gift or
contribution to be bound by the terms thereof, or (ii) transfers of securities
to affiliates of the transferor if the transfers do not involve a public
distribution or public offering and provided, the transferee agrees in writing
as a condition precedent to such transfer to be bound by the terms thereof.

                  (m)      For a period of three years from the Effective Date,
CWCO will use all reasonable efforts to maintain the listing of the Ordinary
Shares (including, without limitation, the Shares) on the Nasdaq National Market
or on a national securities exchange.

                  (n)      CWCO shall, at its sole cost and expense, supply and
deliver to the Representatives and the Underwriters' counsel, within a
reasonable period from the Closing Date, transaction binders in such number and
in such form and content as the Representatives reasonably request.

                  (o)      CWCO will use the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.

         7.       AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling Shareholder
severally agrees with the several Underwriters as follows:

                  (a)      The Selling Shareholder will cooperate to the extent
reasonably necessary to cause the registration statement or any post-effective
amendment thereto to become effective at the earliest possible time.

                  (b)      The Selling Shareholder will pay all Federal and
other taxes, if any, on the transfer or sale of the Shares being sold by the
Selling Shareholder to the Underwriters.

                  (c)      The Selling Shareholder will do or perform all things
reasonably required to be done or performed by the Selling Shareholder prior to
the Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of his or its Shares pursuant to this
Agreement.

                  (d)      The Selling Shareholder has executed or will execute
a Lock-up Agreement as provided in Section 6(k) above and will not sell,
contract to sell or otherwise dispose of any Ordinary Shares, except for the
sale of Shares to the Underwriters pursuant to this Agreement and except as
otherwise provided in such Lock-up Agreement, prior to the expiration


                                       21

<PAGE>

of 120 days after the date of the Prospectus, without the prior written consent
of the Representatives.

                  (e)      Except as stated in this Agreement and in the
Preliminary Prospectus and the Prospectus, the Selling Shareholder will not
take, directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Ordinary Shares to facilitate the sale or resale of the Shares.

                  (f)      The Selling Shareholder will advise the
Representatives promptly, and if requested by the Representatives, will confirm
such advice in writing, within the period of time referred to in Section 6(g)
hereof, of any change in CWCO's condition (financial or other), business,
prospects, properties, net worth or results of operations or of any change in
information relating to the Selling Shareholder or CWCO or any new information
relating to CWCO or relating to any matter stated in the Prospectus or any
amendment or supplement thereto which comes to the attention of the Selling
Shareholder that suggests that any statement made in the Registration Statement
or the Prospectus (as then amended or supplemented, if amended or supplemented)
is or may be untrue in any material respect or that the Registration Statement
or Prospectus (as then amended or supplemented, if amended or supplemented)
omits or may omit to state a material fact or a fact necessary to be stated
therein in order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented, if amended or supplemented) in order to comply with the
Act or any other law.

         8.       PAYMENT OF FEES AND EXPENSES.

                  (a)      Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this Agreement is
terminated, CWCO will pay or cause to be paid, and bear or cause to be borne,
all costs and expenses incident to the performance of the obligations of CWCO
under this Agreement, including: (i) the fees and expenses of the accountants
and counsel for CWCO incurred in the preparation of the Registration Statement
and any post-effective amendments thereto (including financial statements and
exhibits), Preliminary Prospectuses and the Prospectus and any amendments or
supplements thereto; (ii) printing and mailing expenses associated with the
Registration Statement and any post-effective amendments thereto, any
Preliminary Prospectus, the Prospectus, this Agreement, the Agreement Among
Underwriters, the Underwriters' Questionnaire, the power of attorney executed by
each of the Underwriters and the Selected Dealer Agreement and related
documents; (iii) the fees, expenses and other costs of, or incident to, securing
any review or approvals by or from the NASD, including the reasonable fees and
expenses of the Underwriters' counsel, provided that the aggregate fees and
expenses for Underwriters' counsel under this clause (iii) shall not exceed
[$10,000]; (iv) the filing fees of the SEC; (v) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided; (vi) CWCO's travel expenses in connection with
meetings with the brokerage community and institutional investors; (vii) the
costs and expenses associated with settlement in same day funds (including, but
not limited to, interest or cost of funds expenses), if desired by CWCO; (viii)
any fees or costs payable to the Nasdaq National Market as a result of the
offering; (ix) the cost of preparing, issuing and delivery to the Underwriters
of any certificates evidencing the Shares; (x) the costs and charges


                                       22

<PAGE>

of any transfer agent; (xi) the reasonable costs of advertising the offering;
(xii) all taxes, if any, on the issuance, delivery and transfer of the Shares
sold by CWCO; and (xiii) all other costs and expenses reasonably incident to the
performance of CWCO's obligations hereunder that are not otherwise specifically
provided for in this Section 8(a); provided, however, that the Underwriters
shall be responsible for their out-of-pocket expenses, including those
associated with meetings with the brokerage community and institutional
investors, other than CWCO's travel expenses, and the fees and expenses of their
counsel for other than with respect to NASD matters.

                  (b)      CWCO shall pay as due any state or foreign
registration, qualification and filing fees and any accountable out-of-pocket
disbursements in connection with such registration, qualification or filing in
the states and foreign jurisdictions in which the Representatives determine to
offer or sell the Shares.

         9.       CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligation of
each Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 5 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of CWCO and the Selling Shareholder, to the
performance by CWCO and the Selling Shareholder of their respective covenants
and obligations hereunder, and to the following additional conditions:

                  (a)      If required by the Regulations, the Prospectus shall
have been filed with the SEC pursuant to Rule 424(b) of the Regulations within
the applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Registration Statement (including any document incorporated by reference
therein) or the sale of any of the Shares shall have been issued under the Act
or any state or foreign securities law, and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of CWCO, shall be contemplated by the SEC or by any
authority in any jurisdiction designated by the Representatives pursuant to
Section 6(f) hereof. Any request on the part of the SEC or any state or foreign
securities authority for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters.

                  (b)      All corporate proceedings and other matters incident
to the authorization, form and validity of this Agreement, the Shares and the
form of the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all material respects to counsel for the Underwriters.
CWCO shall have furnished to such counsel all documents and information that
they may have reasonably requested to enable them to pass upon such matters. The
Representatives shall have received from the Underwriters' counsel, Ballard
Spahr Andrews & Ingersoll, LLP an opinion, dated as of the Closing Date and any
Option Closing Date, as the case may be, and addressed to the Representatives
individually and as representatives of the several Underwriters, which opinion
shall be satisfactory in all respects to the Representatives.


                                       23

<PAGE>

                  (c)      The Representatives shall have received a copy of an
executed Lock-up Agreement from CWCO, the Selling Shareholder and each of the
persons listed on Schedule III hereto.

                  (d)      On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of
Edwards & Angell, LLP and Charles Adams, Ritchie and Duckworth, counsels for
CWCO and Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for the Selling
Shareholder, dated as of each such date and addressed to the Representatives
individually and as representatives of the several Underwriters to the effect
set forth in Exhibit A and Exhibit B hereto or to such effect as is otherwise
reasonably satisfactory to the Representatives.

                  (e)      At the Closing Date and any Option Closing Date: (i)
the Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and neither the Registration Statement nor any
post-effective amendment thereto nor the Prospectus and any amendments or
supplements thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) since the respective dates as
of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, except as otherwise stated therein, there shall have been
no material adverse change in the Business Conditions of the CWCO Group from
that set forth therein, whether or not arising in the ordinary course of
business; ((iii) the respective dates as of which information is given in the
Registration Statement and the Prospectus or any amendment or supplement
thereto, there shall have been no event or transaction, contract or agreement
entered into by CWCO, Belize Water or any of the Acquired Companies other than
in the ordinary course of business and as set forth in the Registration
Statement or Prospectus, that has not been, but would be required to be, set
forth in the Registration Statement or Prospectus; (iv) since the respective
dates as of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, there shall have been no material adverse change, loss,
reduction, termination or non-renewal of any contract to which CWCO, Belize
Water or any of the Acquired Companies is a party, that has not been, but would
be required to be set forth in the Registration Statement or Prospectus; and (v)
no action, suit or proceeding at law or in equity shall be pending or threatened
against CWCO, Belize Water or any of the Acquired Companies that would be
required to be set forth in the Prospectus, other than as set forth therein, and
no proceedings shall be pending or threatened against or directly affecting
CWCO, Belize Water or any of the Acquired Companies before or by any federal,
state or other commission, board or administrative agency wherein an unfavorable
decision, ruling or finding would materially adversely affect the Business
Conditions of CWCO, Belize Water or any of the Acquired Companies.

                  (f)      The Representatives shall have received at the
Closing Date and any Option Closing Date certificates of the Chief Executive
Officer and the Chief Financial Officer of CWCO dated as of the date of the
Closing Date or Option Closing Date, as the case may be, and addressed to the
Representatives, individually and as representatives of the several


                                       24

<PAGE>

Underwriters, to the effect that (i) the representations and warranties of CWCO
in this Agreement are true and correct, as if made at and as of the Closing Date
or the Option Closing Date, as the case may be, and that CWCO has complied with
all the agreements, fulfilled all the covenants and satisfied all the conditions
on its part to be performed, fulfilled or satisfied at or prior to the Closing
Date or the Option Closing Date, as the case may be, and (ii) the signers of the
certificate have carefully examined the Registration Statement and the
Prospectus and any amendments or supplements thereto, and the conditions set
forth in Section 9(f) hereof have been satisfied.

                  (g)      At the time this Agreement is executed and at the
Closing Date and any Option Closing Date the Representatives shall have received
a letter, dated the date of delivery thereof, addressed to the Representatives,
individually and as representatives of the several Underwriters, in form and
substance satisfactory to the Representatives in all respects (including,
without limitation, the non-material nature of the changes or decreases, if any,
referred to in clause (iii) below) from KPMG:

                           (i)      confirming they are independent certified
public accountants within the meaning of the Act and the Regulations;

                           (ii)     stating that, in their opinion, the
consolidated financial statements, schedules and notes of CWCO included in the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Regulations;

                           (iii)    stating that, on the basis of specified
procedures, which included a reading of the latest available unaudited interim
consolidated financial statements of CWCO (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
minutes of the meetings of the shareholders and the Boards of Directors of CWCO
and Belize Water and the Audit and Executive and Compensation Committees of such
Boards and inquiries to certain officers and other employees of CWCO responsible
for operational, financial and accounting matters and other specified procedures
and inquiries, nothing has come to their attention that would cause them to
believe that at a specified date not more than five business days prior to the
date of such letter, there was any: (A) change in the capital stock other than
(1) the issuance of Ordinary Shares upon the exercise of currently outstanding
options and warrants as described in the Prospectus, (2) the grant of options to
purchase Ordinary Shares under CWCO's currently outstanding stock options plans
and the issuance of Ordinary Shares upon the exercise thereof, and (3) the
issuance of redeemable preferred stock under CWCO's Employee Share Incentive
Plan, (B) increase in long-term debt of CWCO, which is currently $18,985,000 or
(C) any decrease in consolidated net current assets or shareholders equity of
CWCO as compared with the amounts shown in the December 31, 2002 audited balance
sheets of CWCO included in the Registration Statement or that for the periods
from December 31, 2002 to the date of the latest available unaudited financial
statements of CWCO, if any, and to a specified date not more than five days
prior to the date of the letter, there were any decreases, as compared to the
corresponding periods in the prior year, in operating income or total or per
share amounts of net income, except in all instances for changes, decreases or
increases that the Registration Statement discloses have occurred or may occur
and except for such other changes, decreases or increases which the Underwriters
shall in their sole discretion accept.


                                       25

<PAGE>

                           (iv)     stating that they have compared specific
dollar amounts (or percentages derived from such dollar amounts), numbers of
shares and other numerical data and financial information set forth in the
Registration Statement that have been reasonably specified by the
Representatives prior to the date of this Agreement (in each case to the extent
that such dollar amounts, percentages and other information is derived from the
general accounting records subject to the internal controls of CWCO's accounting
systems, or has been derived directly from such accounting records by analysis
or comparison or has been derived from other records and analyses maintained or
prepared by CWCO) with the results obtained from the application of readings,
inquiries and other appropriate procedures set forth in the letter, and found
them to be in agreement.

                           (v)      stating that, on the basis of specified
procedures, which included (A) a reading of the unaudited pro forma condensed
consolidated balance sheet as of December 31, 2002 and the unaudited pro forma
condensed consolidated statement of income for the year ended December 31, 2002,
included in the Registration Statement; (B) inquiry of management of each of the
Acquired Companies who have responsibility for financial and accounting matters;
(C) proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma condensed
consolidated financial statements, that nothing came to their attention as a
result of the above procedures, however, that caused them to believe that the
unaudited pro forma condensed consolidated financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X and that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements.

                  All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Registration Statement for purposes of this subsection.

                  (h)      All corporate and other proceedings and other matters
incident to the authorization, form and validity of this Agreement and the form
of the Registration Statement and Prospectus and all other legal matters related
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all respects to counsel to the Underwriters. CWCO shall have
furnished to such counsel all documents and information that they shall have
reasonably requested to enable them to pass upon such matters.

                  (i)      The Shares shall have been included for quotation on
the Nasdaq National Market.

                  (j)      There shall have been duly tendered to the
Representatives for the respective accounts of the Underwriters, certificates
representing all of the Shares to be purchased by the Underwriters on the
Closing Date or Option Closing date, as the case may be.

                  (k)      The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.


                                       26

<PAGE>

                  (l)      At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested.

                  All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Representatives and the Underwriters'
counsel. CWCO and the Selling Shareholder shall furnish the Representatives with
such conformed copies of such opinions, certificates, letters and other
documents as they shall reasonably request. If any condition to the
Underwriters' obligations hereunder to be fulfilled prior to or at the Closing
Date or any Option Closing Date, as the case may be, is not fulfilled, the
Representatives may on behalf of the several Underwriters, terminate this
Agreement with respect to the Closing Date or such Option Closing Date, as
applicable, or, if they so elect, waive any such conditions which have not been
fulfilled or extend the time for their fulfillment. Any such termination shall
be without liability of the Underwriters to CWCO or the Selling Shareholder.

         10.      INDEMNIFICATION AND CONTRIBUTION.

                  (a)      CWCO shall indemnify and hold harmless each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of the Act, against any and all loss, liability, claim, damage and
expense whatsoever, including, but not limited to, any and all reasonable
expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever or in connection
with any investigation or inquiry of, or action or proceeding that may be
brought against, the respective indemnified parties, arising out of or based
upon any breach of CWCO's representations and warranties made in this Agreement
or any untrue statements or alleged untrue statements of material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus, any
application or other document filed in any jurisdiction in order to qualify all
or any part of the Shares under the securities laws thereof or filed with the
SEC or the Nasdaq National Market (in this Section 10 collectively called
"application"), or the omission or alleged omission from any of the foregoing of
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the foregoing
indemnity shall not apply in respect of any statement or omission made in
reliance upon and in conformity with written information furnished to CWCO by
any Underwriter through the Representatives expressly for use in any Preliminary
Prospectus, the Registration Statement or Prospectus, or any amendment or
supplement thereto, or in any application or in any communication to the SEC, as
the case may be; and further provided, however, that the indemnification
contained in this Section 10(a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any such loss, claim, liability or
expense arising from the sale of the Shares by such Underwriter to any person if
a copy of the Prospectus shall not have been delivered or sent to such person
within the time required by the Act and the regulations thereunder, and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus, provided that CWCO has delivered the Prospectus to the several
Underwriters in requisite quantity on a timely basis to permit such delivery or
sending. The obligations of CWCO under this Section 10(a) will be in addition to
any liability CWCO may otherwise have.


                                       27

<PAGE>

                  (b)      The Selling Shareholder shall indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act from and against any and all loss, liability,
claim, damage and expense whatsoever, including, but not limited to, any and all
reasonable expenses incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever or in
connection with any investigation or inquiry of, or action or proceeding that
may be brought against, the respective indemnified parties, arising out of or
based upon any breach of the Selling Shareholder's representations and
warranties made in this Agreement or any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or Prospectus, any application, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that the foregoing indemnity shall only apply with reference to information
relating to the Selling Shareholder furnished in writing by or on behalf of the
Selling Shareholder expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus, or any amendment or supplement thereto, or
in any application or in any communication to the SEC, as the case may be; and
further provided, however, that the indemnification contained in this Section
10(b) with respect to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, liability or expense arising
from the sale of the Shares by such Underwriter to any person if a copy of the
Prospectus shall not have been delivered or sent to such person within the time
required by the Act and the regulations thereunder, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in such Preliminary Prospectus was corrected in the Prospectus,
provided that CWCO has delivered the Prospectus to the several Underwriters in
requisite quantity on a timely basis to permit such delivery or sending. The
obligations of the Selling Shareholder under this Section 10(b) will be in
addition to any liability the Selling Shareholder may otherwise have.

                  (c)      Each Underwriter, severally and not jointly, shall
indemnify and hold harmless CWCO, each of the directors of CWCO, each of the
officers of CWCO or the Selling Shareholder who shall have signed the
Registration Statement, the Selling Shareholder and each other person, if any,
who controls CWCO or the Selling Shareholder within the meaning of the Act to
the same extent as the foregoing indemnities from CWCO and the Selling
Shareholder to the several Underwriters, but only with respect to any and all
loss, liability, claim, damage or expense resulting from statements or
omissions, or alleged statements or omissions, if any, made in any Preliminary
Prospectus, Registration Statement or Prospectus or any amendment or supplement
thereof or any application or in any communication to the SEC in reliance upon,
and in conformity with written information furnished to CWCO by any Underwriter
through the Representatives expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereof or
any application or in any communication to the SEC, as the case may be. The
obligations of each Underwriter under this Section 10(c) will be in addition to
any liability which such Underwriter may otherwise have.

                  (d)      If any action, inquiry, investigation or proceeding
is brought against any person in respect of which indemnification may be sought
pursuant to Section 10(a), (b) or (c) hereof, such person (hereinafter called
the "indemnified party") shall, promptly after notification


                                       28

<PAGE>

of, or receipt of service of process for, such action, inquiry, investigation or
proceeding, notify in writing the party or parties against whom indemnification
is to be sought (hereinafter called the "indemnifying party") of the institution
of such action, inquiry, investigation or proceeding. The indemnifying party,
upon the request of the indemnified party, shall assume the defense of such
action, inquiry, investigation or proceeding, including, without limitation, the
employment of counsel (reasonably satisfactory to such indemnified party) and
payment of expenses. No indemnification provided for in Section 10 shall be
available to any indemnified party who shall fail to give such notice if the
indemnifying party does not have knowledge of such action, inquiry,
investigation or proceeding to the extent that such indemnifying party has been
materially prejudiced by the failure to give such notice, but the omission to so
notify the indemnifying party shall not relieve the indemnifying party otherwise
than under Section 10. Such indemnified party shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action or if the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party or if
such indemnified party or parties shall have been advised by counsel that there
may be a conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, in any of which events the
indemnified party or parties shall be entitled to select counsel to conduct the
defense to the extent determined by such counsel to be necessary to protect the
interests of the indemnified party or parties, and the reasonable fees and
expenses of such counsel shall be borne by the indemnifying party. The
indemnifying party shall be responsible for the fees and disbursements of only
one such counsel so engaged by the indemnified party or parties. Expenses
covered by the indemnification in Section 10, as the case may be, shall be paid
by the indemnifying party as they are incurred by the indemnified party. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action. Notwithstanding
anything in Section 8 or Section 9 to the contrary, an indemnifying party shall
not be liable for any settlement of a claim effected without its written
consent, which consent shall not be unreasonably withheld.

                  (e)      If the indemnification provided for in this Section
10 is unavailable or insufficient to hold harmless an indemnified party under
Section 10(a), (b) or (c) hereof in respect of any losses, liabilities, claims,
damages or expenses (or actions, inquiries, investigations or proceedings in
respect thereof) referred to therein, except by reason of the failure to give
notice as required in Section 10(d) hereof (provided that the indemnifying party
does not have knowledge of the action, inquiry, investigation or proceeding and
to the extent such party has been materially prejudiced by the failure to give
such notice), then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof, in such proportion as is appropriate to reflect
the relative benefits received by CWCO and the Selling Shareholder on the one
hand and the Underwriters on the other from the offering


                                       29

<PAGE>

of the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of CWCO and the Selling Shareholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, liabilities, claims or expenses (or actions, inquiries,
investigations or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by CWCO and the Selling
Shareholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by CWCO and the Selling Shareholder bears to the
total underwriting discount and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
CWCO or the Selling Shareholder on the one hand or the Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

                  CWCO, the Selling Shareholder and the Underwriters agree that
it would not be just and equitable if contributions to this Section 10(e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 10(e).
The amount paid or payable by an indemnified party as a result of the losses,
liabilities, claims, damages or expenses (or actions, inquiries, investigations
or proceedings in respect thereof) referred to above in this Section 10(e) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 10(e), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 10(e) to
contribute are several in proportion to their individual underwriting
obligations and not joint.

         11.      REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as
the context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriters, CWCO and the
Selling Shareholder, including, without limitation, the indemnity and
contribution agreements contained in Section 10 hereof and the agreements
contained in Sections 6, 7, 8, 12 and 13 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person, and shall survive delivery of the
Shares and termination of this Agreement, whether before or after the Closing
Date or any Option Closing Date.


                                       30

<PAGE>

         12.      EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION HEREOF.

                  (a)      This Agreement shall become effective at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except that the provisions of Sections 8, 10, 11
and 12 hereof shall be effective upon execution hereof. The time of the public
offering, for the purpose of this Section 12, shall mean the time when any of
the Shares are first released by the Underwriters for offering by dealers. The
Representatives and CWCO may prevent the provisions of this Agreement (other
than those contained in Sections 8, 10, 11 and 12) hereof from becoming
effective without liability of any party to any other party, except as noted
below, by giving the notice indicated in Section 12(c) hereof before the time
the other provisions of this Agreement become effective.

                  (b)      The Representatives shall have the right to terminate
this Agreement at any time prior to the Closing Date or any Option Closing Date
as provided in Sections 9 and 13 hereof or if any of the following have
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
Business Conditions of CWCO, Belize Water or any of the Acquired Companies,
whether or not arising in the ordinary course of business, that would, in the
Representatives' opinion, make the offering or delivery of the Shares
impracticable; (ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change would, in the Representatives'
reasonable opinion, make the offering or delivery of the Shares impracticable;
(iii) any suspension or limitation of trading generally in securities on the
Nasdaq National Market or any setting of minimum prices for trading or the
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the Representatives' reasonable
opinion materially and adversely affects trading on such exchange or the
over-the-counter market; (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in the Representatives' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of CWCO, Belize Water or any of the Acquired
Companies; (v) declaration of a banking moratorium by the United States, New
York or Pennsylvania authorities; (vi) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representatives' reasonable opinion has a material adverse effect on
the securities markets in the United States; or (vii) trading in any securities
of CWCO shall have been suspended or halted by the Nasdaq National Market or the
SEC.

                  (c)      If the Representatives elect to prevent this
Agreement from becoming effective or to terminate this Agreement as provided in
this Section 12, the Representatives shall notify CWCO and the Selling
Shareholder hereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.


                                       31

<PAGE>

         13.      DEFAULT BY AN UNDERWRITER.

                  (a)      If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Optional Shares hereunder,
and if the Firm Shares or Optional Shares with respect to which such default
relates do not exceed in the aggregate 10% of the number of Firm Shares or
Optional Shares, as the case may be, that all Underwriters have agreed to
purchase on the relevant Closing Date or Option Closing Date, then the
Representatives may make arrangements satisfactory to CWCO for the purchase of
such Firm Shares by other persons, including any of the Underwriters, but if no
such arrangements are made by the relevant Closing Date or Option Closing Date,
such Firm Shares or Optional Shares to which the default relates shall be
purchased severally by the non-defaulting Underwriters in proportion to their
respective commitments hereunder.

                  (b)      If such default relates to more than 10% of the Firm
Shares or Optional Shares, as the case may be, the Representatives may in their
discretion arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 13, this Agreement
may be terminated by the Representatives or by CWCO without liability on the
part of the non-defaulting several Underwriters (except as provided in Section
10 hereof) or CWCO (except as provided in Sections 8 and 10 hereof); provided
that if such default occurs with respect to Optional Shares after the Closing
Date, this Agreement will not terminate as to the Firm Shares or any Optional
Shares purchased prior to such termination. Nothing herein shall relieve a
defaulting Underwriter of its liability, if any, to the other several
Underwriters and to CWCO for damages occasioned by its default hereunder.

                  (c)      If the Firm Shares or Optional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties, the Representatives or CWCO shall
have the right to postpone the Closing Date or any Option Closing Date, as the
case may be, for a reasonable period but not in any event exceeding seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and CWCO agrees to file promptly any amendment to the Registration
Statement or supplement to the Prospectus that in the opinion of counsel for the
Underwriters may thereby be made necessary. The terms "Underwriters" and
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 13 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and/or Optional Shares.

         14.      INFORMATION FURNISHED BY UNDERWRITERS. The statement set forth
on the third paragraph from the bottom of the cover page of the Prospectus
regarding the terms of the Offering by the Underwriters, the identity of the
Underwriters set forth in the first paragraph under the heading "Underwriting,"
the concession and reallowance figures appearing in the third paragraph under
the heading "Underwriting," the representations with respect to stabilization
activities in the tenth paragraph under the heading "Underwriting," the seventh,
eighth, ninth and tenth paragraphs under the heading "Underwriting" regarding
stabilization, passive market making, syndicate covering transactions, penalty
bids and discretionary authority under


                                       32

<PAGE>

the heading "Underwriting" constitute the only written information furnished by
reference or on behalf of any Underwriter referred to in Sections 1(b) and 10
hereof.

         15.      NOTICE. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to such Underwriter, c/o Janney Montgomery Scott LLC,
1801 Market Street, Philadelphia, Pennsylvania 19103, Attention: Mr. William L.
Rulon-Miller, facsimile number (215) 665-6197 on c/o Wells Fargo Securities,
LLC, 230 West Monroe, Suite 2900, Chicago, Illinois 60606, Attention: Stephen T.
Moss, facsimile number (312) 762-9059 with a copy to Ballard Spahr Andrews &
Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania 19103, Attention:
Justin P. Klein, Esquire, facsimile number (215) 864-8999; if sent to CWCO,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to Consolidated Water Co. Ltd., Trafalgar Place, West Bay Road, P.O.
Box 1114GT, Grand Cayman, Cayman Islands, B.W.I., Attention: Jeffrey M. Parker,
facsimile number (345) 949-2957, with a copy to Edwards & Angell, LLP, 350 East
Las Olas Boulevard, Suite 1150, Fort Lauderdale, Florida 33301-4215, Attention:
Leslie J. Croland, P.A., facsimile number (954) 727-2601; if sent to the Selling
Shareholder, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to J. Bruce Bugg, Jr. _______________________, with a
copy to _______________________.

         16.      PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the several Underwriters, CWCO, the Seller
Shareholder and the controlling persons, directors and officers thereof, and
their respective successors, assigns, heirs and legal representatives, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The terms "successors" and "assigns" shall not
include any purchaser of the Shares merely because of such purchase.

         17.      DEFINITION OF BUSINESS DAY. For purposes of this Agreement,
"business day" means any day on which the Nasdaq National Market is opened for
trading.

         18.      COUNTERPARTS. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.

         19.      CONSTRUCTION. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and performed entirely within such Commonwealth.


                                       33

<PAGE>

                  If the foregoing correctly sets forth your understanding of
our agreement, please sign and return to CWCO the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.



                                       Very truly yours,

                                       CONSOLIDATED WATER CO. LTD.



                                       By:
                                          --------------------------------------
                                             Jeffrey M. Parker
                                             Chairman, Chief Executive Officer



                                       Selling Shareholder named in Schedule II
                                       hereto



                                       By:
                                          --------------------------------------
                                             Attorney-in-Fact

The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.



- -------------------------------
As Representative of the several Underwriters
named on Schedule I

By: JANNEY MONTGOMERY SCOTT LLC



By:
   -----------------------------
   Name:
   Title:



WELLS FARGO SECURITIES, LLC
As Representative of the several Underwriters
named on Schedule I

By:  WELLS FARGO SECURITIES, LLC



By:
   -----------------------------
   Name:
   Title:


                                       34

<PAGE>

                                   SCHEDULE I

                            Schedule of Underwriters

<TABLE>
<CAPTION>
<S>                                                                 <C>
                                                                    Number of Firm Shares
Underwriter                                                            to be Purchased
- -----------                                                         ---------------------
<S>                                                                 <C>
Janney Montgomery Scott LLC...................................
                                                                         ----------

Wells Fargo Securities, LLC...................................
                                                                         ----------

Total.........................................................
                                                                         ==========
</TABLE>

<PAGE>

                                   SCHEDULE II

<TABLE>
<CAPTION>
Firm Shares                                                                       Number of
Selling Shareholder                                                              Firm Shares
- -------------------                                                              -----------
<S>                                                                              <C>
Argyle/Cay-Water, Ltd......................................................       567,662

Total......................................................................       567,662
</TABLE>

<PAGE>

                                  SCHEDULE III

                  Persons Who Are to Deliver Lock-Up Agreements

                  Lock-Up Agreements are to be delivered by the following
persons and entities immediately prior to the time the SEC declares the
Registration Statement effective:

                  Jeffrey M. Parker
                  Frederick W. McTaggart
                  Kenneth R. Crowley
                  Gregory S. McTaggart
                  Robert B. Morrison
                  Gerard Pereira
                  Peter D. Ribbins
                  Brent Santha
                  William T. Andrews
                  J. Bruce Bugg, Jr.
                  Brian E. Butler
                  Stephen A. Carr
                  Carson J. Ebanks
                  Richard L. Finlay
                  Clarence B. Flowers, Jr.
                  Wilmer Pergande
                  Raymond Whittaker
                  Argyle/Cay-Water, Ltd.
                  North American Mortgage & Finance Corporation

<PAGE>

                                    EXHIBIT A

                    Matters to be Covered in the Opinions of
                         Counsels for CWCO, Belize Water
                           and the Acquired Companies

                  1.       CWCO has been duly organized and is validly existing
as a corporation in good standing under the laws of the Cayman Islands with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.

                  2.       Belize Water and each Acquired Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to own its properties and conduct its current business. The
outstanding shares of capital stock of Belize Water and each Acquired Company
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by CWCO, either directly or indirectly; and to the best of such
counsel's knowledge, the outstanding shares of capital stock of Belize Water and
each Acquired Company are owned by CWCO, either directly or indirectly, free and
clear of all liens, encumbrances and security interests. To the best knowledge
of such counsel, no options, warrants or other rights to purchase any shares of
capital stock of CWCO are outstanding.

                  3.       CWCO has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus and the
authorized Ordinary Shares have been duly authorized. The outstanding shares of
Ordinary Shares have been duly authorized and validly issued and are fully paid
and non-assessable. The Ordinary Shares conform as to legal matters to the
description thereof contained in the Prospectus. Certificates for the Ordinary
Shares to be sold by CWCO pursuant to this Agreement (the "Shares") are in due
and proper form and the have been duly authorized and will be validly issued,
fully paid and non-assessable when issued and paid for as contemplated by this
Agreement; and no preemptive rights of stockholders, by operation of law, or to
the knowledge of such counsel, by contract exists with respect to any of the
Shares or the issue and sale thereof.

                  4.       Based on the oral advice of a member of the Division
of Corporation Finance of the SEC, the Registration Statement has become
effective under the Act, and no stop order proceedings with respect thereto have
been instituted or are pending or, to the best knowledge of such counsel,
threatened under the Act.

                  5.       The Registration Statement, the Prospectus and each
amendment or supplement thereto and each document incorporated by reference
therein, comply as to form in all material respects with the requirements of the
Act and the Exchange Act, as applicable, and the applicable rules and
regulations thereunder (except that such counsel need express no opinion as to
the financial statements and notes thereto, schedules and other financial and
statistical information included or incorporated by reference therein).

                  6.       The statements under the caption "Description of
Capital Stock" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or


                                      A-1

<PAGE>

matters of law, are accurate and fairly present the information called for with
respect to such documents and matters.

                  7.       Such counsel does not know of any contracts or
documents required to be filed as exhibits to, or incorporated by reference in,
the Registration Statement or described in the Registration Statement or the
Prospectus that are not so filed, incorporated by reference or described as
required, and such required contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized in all material
respects.

                  8.       There are no material legal proceedings pending or to
the knowledge of such counsel, threatened against CWCO, Belize Water or any
Acquired Company, except as set forth in the Prospectus.

                  9.       This Agreement has been duly authorized, executed and
delivered by CWCO, and, assuming due execution by the Representatives of the
Underwriters, constitutes the valid and binding agreement of CWCO, enforceable
against CWCO, in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws relating to or affecting the enforcement of creditors' rights generally and
to general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated does not and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the respective
Amended and Restated Memorandum of Association and Amended and Restated Articles
of Association or other governing documents of CWCO, Belize Water or any
Acquired Company, or to such counsel's knowledge, any agreement or instrument to
which CWCO, Belize Water or any Acquired Company is a party or by which any of
them may be bound that is material to CWCO, Belize Water and the Acquired
Companies, taken as a whole.

                  10.      No approval, consent, order or authorization by any
regulatory, administrative or other governmental body is necessary in connection
with the execution and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by the NASD or
by state securities and Blue Sky laws as to which such counsel need express no
opinion).

                  11.      Neither CWCO nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.

                  12.      In addition to the matters set forth above, although
such counsel has not undertaken, except as otherwise indicated in this opinion,
to determine independently, and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof, and nothing has come to the attention of
such counsel that would cause such counsel to have reason to believe that (a)
the Registration Statement or any post-effective amendment thereto on the date
it became effective, contained any untrue statement of a material


                                      A-2

<PAGE>

fact or omitted to state any material fact necessary to make the statements
therein not misleading, or that (b) the Prospectus on the Effective Date, on the
date it was filed pursuant to Rule 424(b) and on the Closing Date or Option
Closing Date, as the case may be, contains any untrue statement of material fact
or omits to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; except
that with respect to both clause (a) and (b) above such counsel need express no
opinion with respect to the financial statements and notes thereto, financial
schedules and financial and statistical information included in the Registration
Statement or the Prospectus.

                  The foregoing opinion may be limited to the laws of the United
States, the laws of the Cayman Islands, the British Virgin Islands, Barbados and
the Bahamas. Such counsel may rely as to questions of fact upon the
representations of CWCO set forth in this Agreement and upon certificates of
officers of CWCO and of government officials, all of which certificates must be
satisfactory in form and scope to counsel for the Underwriters.


                                      A-3

<PAGE>

                                    EXHIBIT B

                     Matters to be Covered in the Opinion of
                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                       Counsel for the Selling Shareholder

                  1.       This Agreement has been duly executed and delivered
by or on behalf of the Selling Shareholder and is a valid, legal and binding
agreement of the Selling Shareholder enforceable against the Selling Shareholder
in accordance with its terms, except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the, Selling Shareholder's obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles.

                  2.       To the best knowledge of such counsel, the Selling
Shareholder has full legal right, power and authorization, and any approval
required by applicable federal and Cayman Islands law (other than any approval
required under the applicable state securities or blue sky laws, as to which
such counsel need express no opinion), to sell, assign, transfer and deliver
valid title to the Shares to be sold by the Selling Shareholder in the manner
provided by this Agreement.

                  3.       To the best knowledge of such counsel, the execution
and delivery of this Agreement by the, Selling Shareholder and the consummation
of the transactions contemplated hereby and thereby will not conflict with,
violate, result in a breach of or constitute a default under the terms or
provisions of any agreement, indenture, mortgage or other instrument to which
the Selling Shareholder is a party or by which it or any of its assets or
property is bound, or any court order or decree or any law, rule, or regulation
applicable to the Selling Shareholder or to any of the property or assets of the
Selling Shareholder.

                  4.       Upon delivery to the Underwriters of the Shares to be
sold by the Selling Shareholder pursuant to this Agreement against payment
therefor as contemplated herein, the Underwriters, assuming they have purchased
the Shares in good faith and without notice of any adverse claim and assuming
that there are no events or circumstances peculiar to any individual Underwriter
which might result in any adverse claim, will acquire such Shares free and clear
of any adverse claim.


                                      B-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.14
<SEQUENCE>4
<FILENAME>g80228exv2w14.txt
<DESCRIPTION>AMEND NO. 1 TO SHARE SALE AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 2.14

                                A D D E N D U M

                                       To

A Share Sale Agreement (the "Agreement") in writing dated 16th of December, 2002
made between Consolidated Water Co. Ltd. (the "Purchaser") and Bacardi & Company
Limited (the "Vendor").

The parties hereby agree that the date for the completion of the sale
stipulated in clause 5.1 and the date stipulated in clause 4.2 shall be changed
to the date of 31 March, 2003 (or such late date as may be agreed in writing by
the parties) and subject as aforesaid, the Agreement shall continue in force for
all purposes thereunder.

Dated this 14th day of February, 2003.

SIGNED AND SEALED by the        )
Purchaser in the presence of:   )
                                )/s/ Jeffrey M. Parker
                                )-------------------------------
                                )
                                )
/s/ Carolyn Parker               /s/ Frederick W. McTaggart
- ---------------------------      -------------------------------
Witness

SIGNED AND SEALED by the Vendor )
in the presence of:             )
                                )/s/ [ILLEGIBLE]
                                )-------------------------------
                                )
                                )
/s/ [ILLEGIBLE]                  /s/ [ILLEGIBLE]
- ---------------------------      -------------------------------
Witness


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.15
<SEQUENCE>5
<FILENAME>g80228exv2w15.txt
<DESCRIPTION>AMEND NO. 2 TO SHARE SALE AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 2.15

                                    ADDENDUM

                                       To

A Share Sale Agreement (the "Agreement") in writing dated 16th December, 2002
made between Consolidated Water Co. Ltd. (the "Purchaser") and Bacardi & Company
Limited (the "Vendor") as amended by an Addendum thereto dated 14th February,
2003.

The parties hereby agree that the date for the completion of the sale
stipulated in clause 5.1 and the date stipulated in clause 4.2 shall be changed
to the date of 3O April, 2003 (or such late date as may be agreed in writing
by the parties) and subject as aforesaid, the Agreement shall continue in force
for all purposes thereunder.

Dated this 25th day of March, 2003.

SIGNED AND SEALED by the        )
Purchaser in the presence of:   )/s/ Jeffrey M. Parker
                                )-------------------------------

                                )
                                )
                                )
/s/ [ILLEGIBLE]                 )/s/ Frederick W. McTaggart
- ---------------------------      -------------------------------
Witness

SIGNED AND SEALED by the Vendor )
in the presence of:             )
                                )_______________________________
                                )
                                )
____________________________    )_______________________________
Witness


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>6
<FILENAME>g80228exv5w1.txt
<DESCRIPTION>OPINION OF CHARLES ADAMS RITCHIE & DECKWORTH
<TEXT>
<PAGE>
                                                                     EXHIBIT 5.1

CHARLES ADAMS, RITCHIE & DUCKWORTH                   PO Box 709 GT, Zephyr House
ATTORNEYS-AT-LAW                                       Mary Street, Grand Cayman
                                                          Cayman Islands, B.W.I.

                                                       Telephone: (345) 949-4544
                                                       Facsimile: (345) 949-7073
                                                        E-mail: card@card.com.ky



April 29th, 2003

Consolidated Water Co. Ltd.,
P.O. Box 1114 GT
Grand Cayman
B.W.I.

Dear Sirs,

We have acted as Cayman Islands counsel to you, a Cayman Islands company ("the
Company"), in connection with the proposed issue and sale by the Company of the
following securities to be registered on a Form F-2 Registration Statement,
("the Registration Statement"), to be filed with the Securities and Exchange
Commission ("the Commission") pursuant to the United States Securities Act of
1933 ("the Act"):-

1.    1,767,662 ordinary shares of the Company ("the Shares); and

2.    an additional 265,150 ordinary shares of the Company which may be sold
      pursuant to an over allotment option granted to the Underwriter ("the
      Additional Shares").

In rendering this opinion, we have examined the following documents and
instruments:-

(1)   the Registration Statement (not including the Exhibits filed or to be
      filed unless mentioned below);

(2)   the Company's Certificate of Incorporation;

(3)   the Company's Memorandum and Articles of Association; and

(4)   the resolutions adopted by the Board of Directors of the Company
      authorising the issue and sale of the Shares and the Additional Shares
      (collectively "the Securities") pursuant to the terms contained in the
      Registration Statement.

We have also consulted with officers and directors of the Company and have
obtained such representations with respect to matters of fact as we have deemed
necessary or advisable for purposes of rendering this opinion, we have not
necessarily independently verified those factual statements, nor the veracity of
those representations, but we have no reason to doubt their truth or accuracy.

Based on the foregoing it is our opinion that after the Commission has declared
the Registration Statement to be effective (such Registration Statement as is



<PAGE>

                       CHARLES ADAMS, RITCHIE & DUCKWORTH


finally declared effective and the form of Prospectus contained in it being
referred to in this opinion as "the Registration Statement" and "the Prospectus"
respectively) and when the provisions of all applicable United Sates Federal and
State laws have been complied with, the Securities, when issued and sold in
accordance with the terms disclosed in the Registration Statement, will on
receipt of full payment for them, constitute under the laws of the Cayman
Islands legally issued Securities, fully paid and non-assessable.

This opinion is issued on the basis that it will be construed in accordance with
the provisions of the laws of the Cayman Islands and will not give rise to any
action in any other jurisdiction.

We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to this law firm in the Prospectus under the
heading "Legal Matters". In giving this consent, we do not admit that we are in
the category of persons whose consent we understand is required under Section 7
of the Act or the rules and regulations of the Commission promulgated under it.

Yours faithfully,

CHARLES ADAMS, RITCHIE & DUCKWORTH

SIGNED





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.19
<SEQUENCE>7
<FILENAME>g80228exv10w19.txt
<DESCRIPTION>LEASE DATED 3/1/03
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.19

THIS LEASE is made the 1st day of March, 2003.

BETWEEN:

                       COLMAR LTD.
                       of P.O. Box 31492 SMB
                       Grand Cayman

                       (hereinafter called "the Landlord")

AND

                       CONSOLIDATED WATER CO. LTD.
                       P.O. Box 1114 GT
                       Grand Cayman
                       Cayman Islands

                       (hereinafter called "the Tenant")

WITNESSES AS FOLLOWS:

1.       In consideration of the rent and Tenant's covenants hereinafter
         reserved and contained the Landlord HEREBY DEMISES unto the Tenant ALL
         THOSE premises described in the first schedule hereto (hereinafter
         called the "Demised Premises") and which form part of the buildings
         known as Trafalgar Place, West Bay Road, Grand Cayman, Cayman Islands
         (hereinafter called "the Building") TOGETHER WITH AND SUBJECT TO (but
         to the exclusion of all other liberties, easements, rights and
         advantages) the particular rights and matters also contained in the
         Schedule hereto TO HOLD the same unto the Tenant for the period from
         March 1st 2003 ("the Commencement Date") to January 31st 2004 subject
         nevertheless to the provisos for sooner determination hereafter
         contained and paying therefor from the Commencement Date the annual
         rents set forth in the second schedule hereto payable in equal monthly
         installments in advance for the said period the first of which payments
         shall be due on March 1st 2003.

2.       The Tenant HEREBY COVENANTS with the Landlord as follows:

         2.1.     To pay the said rent on the days and in the manner aforesaid
                  and to pay to the Landlord a sum equal to a fair proportion as
                  hereinafter defined of the amount of the aggregate annual sum
                  payable (if any) to the Cayman Islands Government or to any
                  other authority whether local, governmental and/or otherwise
                  in respect of the Building for site value tax or for any other
                  rates, taxes, assessments or outgoings (including without
                  restricting the foregoing, sewage and water) whatsoever now or
                  hereafter imposed or charged such additional payment to be
                  made on the date for payment of rent next after receipt by the
                  Landlord of a demand therefor. For the purpose of this
                  sub-clause the amount of such fair proportion of the sum
                  hereinbefore referred to shall be such proportion thereof as
                  equals the proportion which the area of the Demised

                                       1

<PAGE>

                  Premises as set forth in the First Schedule hereto ("the Floor
                  Area") bears to 15,687 square feet being the total area of the
                  Building PROVIDED THAT should different areas of the Building
                  suffer land tax at different rates then the said proportion
                  shall be adjusted ratably to reflect such difference.

         2.2.     To pay to the Landlord on exchange and delivery of this Lease
                  a security deposit ("the Deposit") of CI$2,048.49 which
                  deposit shall be held by the Landlord on the following terms
                  and conditions:

                  2.2.1.   No interest shall accrue to the Deposit.

                  2.2.2.   The Landlord may deduct from the Deposit 7 days after
                           notifying the Tenant of its intention to do so any
                           unpaid rent; unremedied damage or unpaid late
                           charges.

                  2.2.3.   Upon the deduction of any sum pursuant to Clause
                           2.2.2 hereof the Tenant shall within 14 days of the
                           Landlord deducting the said sum pay the Landlord such
                           sum as is necessary to reinstate the Deposit to the
                           monthly rent payable by the Tenant at the time the
                           reinstatement is due.

                  2.2.4.   Upon the expiry of this Lease and upon the Tenant
                           having observed its covenants hereunder the Landlord
                           shall return the Deposit to the Tenant provided
                           always that if the Tenant is in breach of any
                           provisions of this Lease or has failed to remedy any
                           such breach or damage the Landlord may deduct from
                           the Deposit such sums as may be necessary including
                           reasonably incurred attorney's fees (whether such are
                           allowed on a taxation or otherwise) to remedy the
                           said breach or make good the said damage.

         2.3.     To pay all charges for telephone, electricity, sewage, water,
                  and other utilities actually consumed or charged to or used in
                  the Demised Premises or such fair proportion thereof during
                  the said term and in January of each year to pay to the
                  Landlord an annual amount of CI$800.00 towards the maintenance
                  of a dumpster for garbage disposal at the Demised Premises.

         2.4.     To keep the interior of the Demised Premises and the
                  appurtenances thereof including floors, walls, ceilings, the
                  insides of doors entering into corridors, the glass windows
                  and all the fixtures and fittings and painting, papering and
                  decoration in the Demised Premises well and sufficiently
                  cleaned (in the case of windows at regular intervals) and in
                  good and substantial repair and condition (including where
                  relevant replacement thereof) and to permit the Landlord and

                                       2

<PAGE>

                  the Landlord's agents or contractors on its behalf to clean,
                  paint or treat as the case may be the outside of all doors
                  entering into corridors from the Demised Premises and the
                  outside of all window frames and glass in the Demised
                  Premises in such color and in such manner and at such times as
                  the Landlord may desire or direct with the right to enter the
                  Demised Premises as may be necessary for such purposes.

         2.5.     Not to alter, injure, cut or maim any of the floors, walls,
                  ceilings, windows, doors, wiring, pipes, appurtenances,
                  fixtures or fittings including air conditioning and other
                  equipment in, of or to the Demised Premises nor to make any
                  alterations or additions to the interior or exterior
                  appearance of the Demised Premises without the prior consent
                  in writing of the Landlord nor permit any of the foregoing to
                  be done. Such consent not to be unreasonably withheld by the
                  Landlord.

         2.6.     To permit any agent or employee of the Landlord to enter the
                  Demised Premises in the ordinary course of his duty and to
                  permit the Landlord and the Landlord's agents surveyors and
                  workmen to enter with all necessary appliances upon the
                  Demised Premises at any reasonable time having given prior
                  notice of such intention and in the case of fire or any other
                  emergency without notice and/or for the purpose of examining
                  the condition thereof or of doing such works and thing as may
                  be required for any repairs, alterations, additions,
                  maintenance, cleaning, installations, improvements or renewals
                  of or to the Demised Premises or any part of the Building or
                  apparatus or equipment therein and also for the purpose of
                  viewing the state and condition of the Demised Premises and
                  before the expiration of one calendar month's notice given in
                  writing by the Landlord to execute any repairs lawfully
                  required to be done by the Tenant and in accordance with such
                  notice and if the Tenant shall within such time fail to
                  execute such work the Landlord may thereupon cause such work
                  to be done and recover the cost thereof from the Tenant but
                  without prejudice to the Landlord's right of re-entry
                  hereinafter mentioned.

         2.7.     Subject to sub clause 2.25, to use the Demised Premises only
                  as business offices for Consolidated Water Co. Ltd.

         2.8.     Not knowingly to do or permit or suffer to be done upon or
                  within the Demised Premises anything which shall constitute or
                  may be or become a nuisance or annoyance to or in any way
                  interfere with the quiet and peaceful user of the other
                  portions of the Building or any adjoining or neighbouring
                  premises.

                                       3

<PAGE>

         2.9.     Not to use or permit the Demised Premises to be used for
                  residential purposes or for overnight accommodation.

         2.10.    Not to obstruct or litter or deface in any manner the
                  vestibules, lifts, entrances, stairways, corridors, passages
                  and other common areas of the Building or the carpark and
                  areas adjacent to the Building.

         2.11.    Not to do or suffer to be done knowingly anything whereby the
                  policy or policies of insurance on the Demised Premises or on
                  the Building against fire or any other risk may become void or
                  voidable or whereby the premium thereon may be increased and
                  to repay to the Landlord all sums paid by the Landlord by way
                  of increased premiums and all expenses incurred by the
                  Landlord in or about any renewal of such policy or policies
                  and any other expenses or charges incurred by the Landlord or
                  rendered necessary by reason of a breach or nonobservance of
                  the provisions of this sub-clause.

         2.12.    Not to permit any open use of internal combustion fire to be
                  burned or cooking to be done (excluding the heating of water
                  for beverages or cooking appliances within a restaurant that
                  is in good standing with all Cayman Islands Government
                  departments) within the Demised Premises without the prior
                  consent in writing of the Landlord.

         2.13.    Not without the prior consent of the Landlord to bring or
                  allow to be brought on to the Demised Premises or any part of
                  the Building any machines or machinery save equipment and
                  furnishings as are requisite for the Tenant's business and to
                  observe such regulations as the Landlord shall specify
                  regarding load factors and stresses within the Building.

         2.14.    Not to paint, affix or exhibit any name or writing or any
                  sign, placard or advertisement in the vestibules, entrances,
                  stairways, corridors or passages of or upon or outside any
                  wall, door, entrance, window, roof or exterior wall of the
                  Building or any entrance door to the Demised Premises from the
                  corridors giving access thereto without the consent in writing
                  from the Landlord such consent not to be unreasonably refused
                  PROVIDED however that all signs of any type whatsoever shall
                  in each case conform with that reasonably approved by the
                  Landlord and any requirements of the Central Planning
                  Authority.

         2.15.    Not to charge, encumber, assign, sublet or part with
                  possession of the Demised Premises or any part thereof without
                  the previous consent in writing of the Landlord (which shall
                  not be unreasonably withheld) PROVIDED that upon any breach by
                  the Tenant of this sub-clause the Landlord may at any time re-

                                       4

<PAGE>

                  enter upon the Demised Premises and if the Landlord shall do
                  so the term hereby created shall terminate absolutely.

         2.16.    Not to bring or permit or suffer to be brought onto the
                  Demised Premises any materials or objects of a type likely to
                  cause a nuisance and to indemnify the Landlord against all
                  actions, suits, claims or demands arising out of the presence
                  on the Demised Premises of any materials or objects or out of
                  their escape or leakage therefrom.

         2.17.    Not to bring or permit to be brought any vehicles, bicycles,
                  animals or birds into the Building and not to use the Demised
                  Premises or permit the same to be used for any illegal or
                  immoral purpose or any purpose of a nature likely to injure
                  the reputation or Trafalgar Place.

         2.18.    To observe and conform to all reasonable regulations and
                  restrictions made by the Landlord or its agents or servants
                  for the proper management of the Building and notified in
                  writing by the Landlord or its agents or servants to the
                  Tenant from time to time.

         2.19.    To indemnify and hold harmless the Landlord against all
                  damage, loss or injury to the Demised Premises or any other
                  part of the Building or Trafalgar Place (including windows
                  thereof) or to any person caused by any act, default or
                  negligence of the Tenant, its servants, agents, licencees or
                  invitees and to pay and make good to the Landlord all and
                  every loss or damage whatsoever incurred or sustained by the
                  Landlord as a consequence of every breach or non-observance of
                  the Tenant's covenants herein contained and to indemnify and
                  hold harmless the Landlord against all actions, claims,
                  liabilities costs and expenses thereby rising.

         2.20.    To yield up the Demised Premises as the expiration or sooner
                  determination of the term hereby created with fixtures and
                  fittings thereto in good and tenantable repair and condition
                  fair wear and tear excepted.

         2.21.    To pay the stamp duty attracted by this Lease from time to
                  time and registration fees in relation thereto.

         2.22.    To pay a charge of CI$50.00 for each day that the rent payable
                  by the Tenant under this Lease remains unpaid for 5 days or
                  more, provided that the Landlord shall have notified the
                  Tenant in writing by delivery of a notice of unpaid rent to
                  the Demised Premises. The notice specified by this clause need
                  not be a notice of default as defined by the Registered Land
                  Law.

                                       5

<PAGE>

         2.23.    To obtain and keep in force at the sole expense of the Tenant
                  a policy of insurance against public liability in respect of
                  death, injury or other damage to persons when in or upon the
                  Leased Premises with an insurance company and in an amount of
                  not less than US$1,000,000.00 such policy naming the Landlord
                  as an additional insured party and including a ten day notice
                  of cancellation or non-renewal to the Landlord and to pay all
                  premiums necessary for the above purposes and to produce to
                  the Landlord or its agent on request the policy and the
                  receipts for payment of the premiums.

         2.24.    To keep at the Tenant's expense the air-conditioning equipment
                  installed in and utilized for the Leased Premises in good
                  running order and to pay the running and maintenance costs
                  (including, but not limited to the cost of replacing and
                  maintaining the air conditioning filters) in respect thereof.

         2.25.    To obtain and maintain all licenses and other approvals from
                  the Cayman Islands Government or any other appropriate
                  licensing authorities in the Cayman Islands as shall be
                  necessary to conduct the business set out in sub clause 2.7.

3.       The Landlord hereby covenants with the Tenant as follows:

         3.1.     Subject to the provisions of sub-clauses 2.1, 2.2, 2.3, 2.21
                  and 2.22 to pay all existing and future taxes, rates and
                  out-goings payable in respect of the Demised Premises or of
                  the Building.

         3.2.     To insure and at all times during the said term keep insured
                  the Building (unless the insurance thereon shall be made void
                  through or by reason of the act or default of the tenants or
                  any of them) against loss or damage by fire, hurricane,
                  earthquake, riot, strike and such other hazards and risks as
                  the Landlord may desire.

         3.3.     Unless prevented by any cause beyond the control of the
                  Landlord to clean and keep tidy the common areas of and
                  adjacent to the Building and as and when necessary repair and
                  re-paint the same and all windows affording light to the same
                  and keep the same and the building in good and tenantable
                  repair (and in the case of lavatories and washing conveniences
                  supplied with running water) TOGETHER WITH the roofs, and
                  exterior walls of the Building and the wiring, drains,
                  downpipes and water pipes thereof.

                                       6

<PAGE>

         3.4.     That the Tenant paying the rent hereby reserved and performing
                  and observing the covenants on the Tenant's part herein
                  contained shall subject to the provisions of this Lease be
                  entitled peaceably to hold and enjoy the Demised Premises
                  without any interruption by the Landlord or any person
                  rightfully claiming under it.

4.       Provided always and it is hereby agreed as follows:

         4.1.     All fixtures, fittings, partitioning, installations,
                  alterations and additions in the Demised Premises ( except all
                  such fixtures in the nature of trade fixtures or machinery as
                  shall have been installed by the Tenant during the term hereof
                  which subject to the proviso hereinafter as to repair of
                  damage the Tenant shall be entitled to remove at the
                  termination of the term hereby created) shall unless expressly
                  otherwise agreed in writing by the Landlord, be and become the
                  property of the Landlord (whether paid for by the Tenant or
                  the Landlord) and shall not be removed by the Tenant PROVIDED
                  always that the Landlord may at the termination of the term
                  hereby created require if it so desires the Tenant to remove
                  any of the foregoing (including trade fixtures or machinery)
                  placed or affixed by the Tenant in the Demised Premises and to
                  make good at the Tenant's expense any damage caused thereby.

         4.2.     If the Demised Premises or any part thereof is damaged or
                  destroyed by fire, storm or tempest or other act of God or the
                  Queen's enemies or any other cause whatsoever during the
                  continuance of the term hereby created so as to render the
                  Demised Premises unfit for occupation and use the Landlord
                  will until such time as the Demised Premises shall be fit for
                  occupation or use allow the Tenant total or just proportionate
                  abatement of the rent reserved as the case may be according to
                  the nature and extent of the damage sustained for so long as
                  the Demised Premises shall be unfit for occupation and use
                  PROVIDED always that the Tenant's right to abatement of the
                  rent shall cease if the insurance monies shall be wholly or
                  partially irrecoverable by reason solely or in part of any act
                  or default of the Tenant.

         4.3.     If at any time during the term hereby created the Demised
                  Premises shall be destroyed or damaged by fire, storm or
                  tempest or other act of God or the Queen's enemies so as to
                  become totally unfit for occupation and use or such damage
                  shall in the opinion of the Landlord not be capable of repair
                  within 180 days of its occurrence then and in such case the
                  Landlord shall be under no liability to reinstate the Demised
                  Premises and in such case either party shall have the right to
                  terminate this demise by giving to the other fourteen days'
                  notice in writing whereupon this demise and everything
                  contained herein shall

                                       7

<PAGE>

                  cease but without prejudice to the rights and remedies of
                  either party in respect of any antecedent claim or breach of
                  covenant.

         4.4.     If the rent hereby reserved or any part thereof shall at any
                  time be unpaid for 14 days after becoming payable (whether
                  formally demanded or not) or if any of the stipulations on the
                  Tenant's part herein contained shall not be performed or
                  observed or if the Tenant shall go into liquidation whether
                  voluntarily or otherwise or shall call a meeting of the
                  Tenant's creditors or enter into any agreement with such
                  creditors it shall be lawful for the Landlord at any time
                  thereafter to re-enter the Demised Premises or any part
                  thereof in the name of the whole and thereupon the term
                  created hereby shall absolutely determine but without
                  prejudice to the right of action of the Landlord in respect of
                  any antecedent breach of the Tenant's obligations herein
                  contained.

         4.5.     During the last three months of the term hereby created the
                  Landlord shall have the right at reasonable times and upon
                  giving the Tenant 24 hours notice to enter and show the
                  Demised Premises to prospective tenants thereof.

         4.6.     Any notice under this Lease shall be in writing. Any notice to
                  the Tenant shall be sufficiently served if addressed to the
                  Tenant and delivered to the Demised Premises. Any notice to
                  the Landlord shall be sufficiently served if addressed to the
                  Landlord at its registered office. Any notice posted to the
                  Landlord or the Tenant shall be deemed to have been served
                  within two days following that on which it was posted.

         4.7.     Insofar as terms and provisions of this Lease are inconsistent
                  with the terms and provisions of the Registered Land Law,
                  (1995 Revision) the said Registered Land Law, (1995 Revision)
                  shall be deemed to have been varied to that extent.

         4.8.     In this Lease where the context so admits:-

                  4.8.1.   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 references to persons shall included
                           corporations and firms;

                  4.8.2.   if at any time two or more persons are included in
                           the expression "the Tenant" then covenants entered
                           into or implied therein by or on the part of the
                           Tenant shall be deemed to be and shall be construed
                           as covenants entered into by and binding on such
                           persons jointly and severally.

                                       8

<PAGE>

         4.9.     The Lease shall be binding on and enure to the benefit of each
                  party's respective successors and assigns.

         5.0.     The Tenant shall have the right to extend the term of this
                  lease for 1 further Term of 1 year ending on January 31, 2005
                  provided that the rents payable by the Tenant to the Landlord
                  shall be as set forth in the Second Schedule. Any such
                  exercise of this option by the Tenant shall be exercised by
                  notice in writing delivered to the Landlord at least 3 months
                  prior to the termination of the current period.

                               THE FIRST SCHEDULE

ALL THOSE premises comprising 2 separate units of 640 and 512 square feet in
Trafalgar Place ("the Building") known as B5 on the second floor of Building B
and C4 on the second floor of Building C situated on the West Bay Road, Grand
Cayman, Cayman Islands and shown edged red on the plans annexed hereto and being
part of parcel 79 of block 11B of the West Bay Beach North Registration Section
TOGETHER WITH the use in common with the Landlord and other tenants of the
Building (and their servants, agents, invitees, licencees or visitors) parking
and other conveniences provided for the use of the tenants of the Building AND
TOGETHER ALSO WITH the right for the Tenant to the free and uninterrupted use of
all electric, telephone and other wires and cables upon, through or under
adjacent premises in the Building so far as necessary in the enjoyment of the
Demised Premises and in common with the Landlord and all others so authorised by
the Landlord and all other persons entitled thereto EXCEPTING AND RESERVING to
the Landlord and the tenants and occupiers of other parts of the Property and
all such other persons entitled thereto the right of free passage and running of
water, upon, through on under the Demised Premises and the free and
uninterrupted use of all electric, telephone and other wires, pipes and cables
upon, through or under the same.

                               THE SECOND SCHEDULE

           MARCH 1st 2003 TO JANUARY 31st 2004         CI$2,048.49 P.M.  [X]

                               PERIOD OF EXTENSION

           FEBRUARY 1st 2004 TO JANUARY 31st 2005      CI$25,565.00 P.A. [X]

                                       9

<PAGE>

IN WITNESS WHEREOF the parties hereto have cause this Deed to be executed as
their respective acts and deeds the day and year before written.

THE COMMON SEAL OF                         )
COLMAR LTD.                                )
was hereunto affixed and                   )
acknowledge by                             )
                                           )
                                           )         ___________________________
         Andrew N. Johnson                 )         Alternate Director
                                           )
and                                        )         ___________________________
         Christopher M. Whorms             )         Assistant Secretary
                                           )
in the presence of:                        )
                                           )
_____________________________________      )

THE COMMON SEAL OF                         )
CONSOLIDATED WATER CO. LTD.                )
was hereunto affixed by                    )
                                           )
                                           )         /s/ Frederick M. McTaggart
                                           )         ---------------------------
                                           )         Director
         and                               )
                                           )
                                           )         /s/ Peter D. Ribbins
                                           )         ---------------------------
                                           )         Secretary
in the presence of:                        )
                                           )
/s/ [ILLEGIBLE]
- -------------------------------------      )

                                       10

<PAGE>

[UPPER FLOOR MAP]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27
<SEQUENCE>8
<FILENAME>g80228exv10w27.txt
<DESCRIPTION>AMENDED AND RESTATED PROFIT SHARING AGREEMENT
<TEXT>
<PAGE>

                                                                 EXHIBIT - 10.27

                             DATED: February 7, 2003

                              AMENDED AND RESTATED

                            PROFIT SHARING AGREEMENT

                                     BETWEEN

                           OCEAN CONVERSION (BVI) LTD.

                                       AND

                                 DESALCO LIMITED

                                       AND

                           CONSOLIDATED WATER CO. LTD.

                                       AND

                        SAGE WATER HOLDINGS (BVI) LIMITED

                       CHARLES ADAMS, RITCHIE & DUCKWORTH
                                  ZEPHYR HOUSE
                          P.O. BOX 709 GT, GRAND CAYMAN

<PAGE>

1.       RELEASE

         1.1      Consolidated and Sage hereby agree to release the Company from
                  its obligations under the two Profit Sharing Agreements and
                  Sage Assignments in consideration for the Company agreeing to
                  restate the profit sharing agreements on the terms hereinafter
                  set out.

2.       PROFIT SHARING AGREEMENT

         2.1      If in respect of any accounting period following the date
                  hereof in which the Company shall have profits available for
                  the payment of dividends and does pay such dividend therefrom
                  the Company shall procure that in the absence of agreement to
                  the contrary a distribution shall be made to each of
                  Consolidated and Sage or to their nominees equal to the
                  following:

                  202,500 X THE DIVIDEND PER SHARE DECLARED AND PAID

         2.2      The profit sharing shall be paid by the Company to each of
                  Consolidated and Sage concurrently with the payment of
                  dividends.

         2.3      The duration of this profit sharing agreement shall be for so
                  long as the Company remain in business as a going concern.

         2.4      The factor of 202,500 specified in Clause 3.1 shall at all
                  times be equal to the lesser of (i) 202,500, and (ii) 202,500
                  multiplied by the total number of issued and fully paid shares
                  and divided by 1,230,000 (being the total number of shares in
                  issue at the date hereof.

3.       All costs, local fees and other expenses in the preparation and
         execution of this Agreement and the settlement contained herein shall
         be borne and paid by the party incurring such cost.

4.       ASSIGNMENT

         4.1      Neither of the parties shall assign or transfer or purport to
                  assign any of its rights or obligations hereunder without the
                  prior written consent of the other party.

5.       SUCCESSORS AND ASSIGNS

         The Agreement shall ensure for the benefit of and be binding on the
         respective successors in title and permitted assigns (if any) of each
         party who shall procure that each such assignee shall execute a deed
         with the other party by which the assignee agrees to be bound by terms
         identical, mutatis mutandis, to the terms of this Agreement (including
         the terms of this clause).

                                        3

<PAGE>

6.       WAIVER, FORBEARANCE AND VARIATION

         6.1      The rights of either party shall not be prejudiced or
                  restricted by an indulgence or forbearance extended to the
                  other party in respect of any breach.

         6.2      This Agreement shall not be varied or cancelled, unless such
                  variation or cancellation shall be expressly agreed in writing
                  by a duly authorised person of each party.

7.       GOVERNING LAW

         7.1      The construction, validity and performance of this agreement
                  shall be governed in all respects by the laws of the British
                  Virgin Islands.

         7.2      Except as may be set out elsewhere herein the courts of the
                  British Virgin Islands shall have exclusive jurisdiction to
                  settle any dispute which may arise between the parties in
                  respect of the construction validity or performance of this
                  Agreement or as to the rights and liabilities of the parties
                  hereunder.

8.       SEVERABILITY

         8.1      If any of the provisions of this Agreement is found by any
                  competent authority to be void or unenforceable, such
                  provision shall be deemed to be deleted from this Agreement
                  and the remaining provisions of this Agreement shall continue
                  in full force and effect. Notwithstanding the foregoing the
                  parties hereto shall thereupon negotiate in good faith in
                  order to agree the terms of a mutually satisfactory provision
                  to be substituted for the provision so found to be void or
                  unenforceable.

9.       GENERAL MATTERS

         9.1      This Agreement supersedes any previous agreement between the
                  parties in relation to the matters dealt with herein and
                  represents the entire understanding between the parties in
                  relation thereto.

         9.2      Reference to any statute or statutory provision includes a
                  reference to that statute or statutory provision as from time
                  to time amended, extended or re-enacted.

         9.3      Words denoting the singular number only shall include the
                  plural and vice versa.

         9.4      Unless the context otherwise requires, reference to any clause
                  is to a clause of this Agreement.

                                        4

<PAGE>

         9.5      The headings in this Agreement are inserted for convenience
                  only and shall not effect the construction hereof.

         9.6      Covenants expressed to be by two parties shall (except where
                  the context prohibits) be deemed to be joint and several
                  covenants.

10.      NOTICES

         10.1     Any notice required to be given under this Agreement shall
                  either be delivered personally or sent by first class recorded
                  delivery post (air mail if overseas) or telex or full rate
                  telegram or telecopy. The address for service of each party
                  shall be its registered office for the time being and shall be
                  his address stated above or any other address for service
                  previously notified to the other party or (in the absence of
                  any such notification) his last known place of residence. A
                  notice shall be deemed to have been served as follows:

                  10.1.1   if personally delivered, at the time of delivery;

                  10.1.2   if posted by inland mail, at the expiration of 48
                           hours or (in the case of air mail) 7 days after the
                           envelope containing the same was delivered into the
                           custody of the post authorities; and

                  10.1.3   if sent by telex, or telecopy at the time of
                           transmission.

                  In proving such service it shall be sufficient to prove that
                  personal delivery was made, or that the envelope containing
                  such notice was properly addressed and delivered into the
                  custody of the postal authority as a prepaid first class
                  recorded delivery or air mail letter (as appropriate) or that
                  the telex or telecopy was transmitted as the case may be.

IN WITNESS WHEREOF the parties hereto have set their hands and seals the day and
date first above written.

SIGNED AND SEALED by and on behalf of       )
Ocean Conversion (BVI) Ltd.                 )
                                            )
                                            )
/s/ J.M. PARKER                             )        /s/ Frederick W. McTaggart
- --------------------                                 --------------------------
Witness J.M. PARKER                                 Director

                                        5

<PAGE>
                                            )
SIGNED AND SEALED by and on behalf of       )
DesalCo Limited                             )
In the presence of:                         )
                                            )
                                            )
/s/ J.M. PARKER                             )         /s/ Frederick W. McTaggart
- --------------------                                  --------------------------
Witness J.M. PARKER                                   Director

SIGNED AND SEALED by and on the behalf of   )
Consolidated Water Co. Ltd.                 )
In the presence of:                         )
                                            )
                                            )
/s/ J.M. PARKER                             )         /s/ Frederick W. McTaggart
- --------------------                                  --------------------------
Witness J.M. PARKER                                   Director

SIGNED AND SEALED by and on the behalf of   )
Sage Water Holdings (BVI) Ltd.              )
In the presence of:                         )
                                            )
                                            )
/s/ [ILLEGIBLE]                             )         /s/ [ILLEGIBLE]
- --------------------                                  --------------------------
Witness [ILLEGIBLE]                                   Director

                                        6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>9
<FILENAME>g80228exv10w28.txt
<DESCRIPTION>BANK OF BUTTERFIELD COMMITMENT LETTER
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.28

                      [LETTERHEAD OF BANK OF BUTTERFIELD]

Ocean Conversion (Cayman) Limited                       2"" January 2002
Suite 381
48 Par-La-Ville Road
Hamilton HM 1 1

Attention: Dr. William T. Andrews
           Managing Director

Dear Sirs,

Thank you for your interest in a credit facility from the Bank of Butterfield.
The Bank is pleased to make a U.S. Dollar facility available to you subject to
the following terms and conditions:-

BORROWER:                  OCEAN CONVERSION (CAYMAN) LIMITED

AMOUNT:                    US $2,400,000 (Two Million Four Hundred Thousand
                           United States Dollars)

EVIDENCE OF DEBT:          Demand promissory note(s)

PURPOSE:                   To finance the cost of constructing a new reverse
                           osmosis plant at Red Gate Road, Grand Cayman, Cayman
                           Islands

TERM:                      Subject to the terms of this Letter, the loan will
                           mature in 5 (five) years from the 3 1"' December 2002
                           under this Facility Letter. For purposes of this
                           Letter, a year shall be reckoned as 360 days.

CONDITIONS PRECEDENT:      The Bank shall not be obliged to permit any drawing
                           of monies under this Letter until it has received as
                           conditions precedent, in each case in form and
                           substance satisfactory to the Bank, the documents,
                           items and evidence specified in Schedule #1 to this
                           Letter (or the Bank having waived any one or more of
                           them in the Bank's absolute discretion and subject to
                           any condition(s) we may think fit). The Bank's
                           obligation to permit any drawing is conditional upon
                           YOU being in compliance at the relevant time with the
                           terms and conditions of, and there being no breach of
                           or default under

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 2

                           this Letter, and such obligation shall be subject to
                           the Bank's rights under this Letter.

DRAWDOWN:                  Subject to the terms of this Letter, you may draw
                           down on the facility (in integral multiples of
                           $100,000.00,) on any business day, upon giving the
                           Bank not less than three (3) business days prior
                           written notice stating the proposed drawdown date.
                           Such notice shall constitute a representation and
                           warranty to the effect that, on the date of that
                           notice, the representations and warranties is
                           detailed later in this Letter remain true and correct
                           and that the undertakings have been fully performed.
                           On the drawdown date the Bank shall (if satisfied
                           that your payment instructions are consistent with
                           the expressed purpose(s) of this credit facility) pay
                           the loan advance to such person and bank account as
                           you may instruct in the notice of drawdown. In this
                           Letter, "drawdown date" means the date on which an
                           advance is made to you under this facility and
                           "business day" means a day (not being Saturday,
                           Sunday or a public holiday) on which banks are open
                           in Bermuda, London and New York for business of the
                           kind contemplated by this Letter.

RATE OF INTEREST:          Interest on the monies drawn by you under this Letter
                           shall be calculated, in respect of each Interest
                           Period at the rate determined by the Bank two (2)
                           business days before the Interest Period at being
                           1.5% ABOVE THE 3 MONTH RATE the Bank is offered funds
                           in the London InterBank Euro-Dollar market in the
                           approximate amount of the monies drawn or to be drawn
                           by you under this Letter. In this Letter, "Interest
                           Period" shall mean each successive period of 90 days
                           calculated from the date of initial drawdown and
                           notified to the Bank on or before the date (in this
                           Letter the "Interest Review Date") which is two
                           business days before the beginning of that Interest
                           Period.

INTEREST PAYMENT:          You shall pay interest to the Bank on the principal
                           amount of your indebtedness from time to time
                           outstanding under this Letter, at the rate of
                           interest determined in accordance with this Letter.
                           You shall pay such interest QUARTERLY in arrears
                           calculated from the date of initial drawdown on the
                           basis of a 360 day year, provided that if any such
                           interest payment should fall due and payable on a day
                           which is not

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 3

                           a business day as herein defined the payment shall be
                           made on the next following business day.

REPAYMENTS:                Commencing 31" December 2002, the loan is to be
                           repaid by EQUAL SEMI-ANNUAL INSTALLMENTS OF $240,000
                           to cover principal which should retire the loan
                           within the agreed term; however, should a balance be
                           remaining, or in the event of a change in the Rate of
                           Interest, the Bank reserves the right to require a
                           balloon payment or make such adjustment as to
                           principal and interest as is necessary in order that
                           the loan is repaid in full within the agreed term.

PREPAYMENTS:               You may prepay all or (part, limited to a minimum of
                           $100,000 at any one time) of the total amount of
                           monies hereunder on any Interest Review Date.
                           provided that you shall have given the Bank not less
                           than three (3) business days prior notice of such
                           prepayment (which shall be irrevocable and binding).
                           Such prepayment shall be made together with accrued
                           interest on the amount prepaid.

LATE PAYMENTS:             If you fail to pay in full any amount due and payable
                           to the Bank under this Letter, whether principal,
                           interest, fees, costs, expenses or otherwise, then
                           you shall pay the Bank interest on the unpaid amount
                           from its due date to the date of actual payment (as
                           well before as after judgement) at a rate of interest
                           calculated as the sum of:

                           1) the principal interest rate;

                           2) the excess cost of interest that the Bank would
                           incur in funding the overdue amount in the London
                           Interbank Market for such period as the Bank
                           determines to be reasonable in the circumstances (as
                           to which a certificate of the Bank shall be
                           conclusive evidence);

                           3) 2%. Such interest shall be payable at any time on
                           demand. Payments received by the Bank shall be
                           applied first towards costs and expenses, then
                           towards fees and accrued interest and then towards
                           repayment of principal.

EARLY REPAYMENT FEE:       Should the borrowing be repaid prior to any Interest
                           Review Date, the Bank reserves the right to charge an
                           early repayment fee.

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 4

FACILITY FEE:              A facility fee of 75 basis points (US $18,000.) is
                           payable to the Bank upon acceptance of this Letter.

SECURITY:

                           -   The Bank will take a Registered First Priority
                               Fixed & Floating Charge over the assets of The
                               Company in its standard form. (The Charge is to
                               be duly registered in Cayman and Bermuda).

                           -   The Bank requires that a full Comprehensive
                               Insurance Policy over the Plant at Red Gate Road,
                               Grand Cayman be taken out with the Bank listed as
                               Loss Payee. The Bank will require confirmation of
                               such from the Insurance Company.

                           -   The Bank will require a Guarantee for $2,400,000
                               from Edmund Gibbons Limited. It is strongly
                               recommended that Edmund Gibbons Limited takes
                               independent legal advice in respect of the
                               guarantee and the obligation thereunder.

DOCUMENTATION:

                           -   The Bank will require a Certified Board
                               Resolution of the Borrower, authorizing entry
                               into this Credit Facility, the mortgaging of its
                               assets and advising who is authorized to sign the
                               necessary documentation.

                           -   The Bank require an Attorney's Confirmation that
                               the Borrower has the powers to enter into this
                               Credit Facility and mortgage its assets in the
                               proposed manner, and that these are for lawful
                               business objects of the Borrower.

                           -   The Bank will require a Certified List of
                               Officers and Directors of the Company.

                           -   Receipt of a signed copy of:

                               A)  Contract between Cayman Water Authority and
                                   Ocean Conversion (Cayman) Ltd.

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 5

                               B)  Licence from the Government of The Cayman
                                   Islands.

                           -   The Bank will require a Certified Board
                               Resolution of Edmund Gibbons Limited, covering
                               the Guarantee and advising who is authorised to
                               sign the necessary documentation on behalf of The
                               Company.

                           -   The Bank will require an Attorney's Confirmation
                               that the Guarantor has the power to enter into
                               the loan transaction in proposed manner and that
                               these are for lawful business objects of The
                               Company.

UNDERTAKINGS               You undertake to the Bank that, so long as the
                           agreement constituted by this Letter remains
                           operative, you will:

                           1) deliver to the Bank within ninety (90) days after
                           the end of your financial years, copies of your
                           audited financial statements for those years;

                           2) at the same time as they are delivered to your
                           shareholders, copies of all annual reports and other
                           information of a financial or business nature;

                           3) quarterly or other regular management reports as
                           may be required by the Bank, in form satisfactory to
                           the Bank;

                           4) upon request, such other information of a business
                           or financial nature as the Bank may reasonably
                           require;

                           5) promptly inform the Bank of your financial
                           position generally which would be material to be
                           known to a director of you or to a lender to you.

                           6) notify us of any default by Cayman Water Authority
                           under the Terms of the Contract Document.

                           7) maintain in full force and effect all government,
                           tax, monetary and other approval required to enable
                           you to maintain your corporate status, to continue to
                           carry on your business and affairs, and to repay the
                           loan and to pay

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 6

                           interest thereon in US dollars without deduction or
                           withholding of any taxes or other monies;

                           8) pay all sums falling due under this Letter on
                           their due dates.

CHANGES IN CIRCUMSTANCES:

                           1) If it becomes illegal under any law applying to
                           the Bank for it to make or maintain the credit
                           facility under this Letter, then the Bank's
                           commitment to continue the credit facility shall end
                           and any monies drawn hereunder shall be repaid in
                           full on the last day of the current period.

                           2) If, as a result of any change in any applicable
                           law or of any directive of any central bank or
                           monetary authority (whether or not having the force
                           of law), the cost to the Bank of making or
                           maintaining the credit accommodation under this
                           Letter is increased then you shall pay to the Bank
                           the full amount of such increased cost on receipt of
                           the Bank's written notice specifying the change and
                           the increased cost incurred by the Bank (which notice
                           shall, absent manifest error, be conclusive). In such
                           event, you may repay the principal outstanding
                           indebtedness hereunder on the last date of the
                           current Interest Period on paying the full amount of
                           any increased costs and all interest accrued to that
                           day.

                           3) If, not later than two business days before an
                           Interest Review Period it appears to the Bank either
                           that funds will not be available to it in the London
                           Interbank Market for the next Interest Period or that
                           LIBOR will not accurately represent the cost to the
                           Bank of making or maintaining the loan during that
                           Interest Period, then the Bank shall notify you
                           accordingly and agree with you an alternative basis
                           for funding the loan or an alternative interest rate
                           for that Interest Period and any such basis or rate
                           agreed within twenty five days from the beginning of
                           the Interest Period shall be retroactive to its
                           beginning. If no agreement is reached within
                           twenty-five days then you shall repay the loan in
                           full on the thirtieth day.

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 7

REPRESENTATIONS AND WARRANTIES:

                           You represent and warrant to the Bank and so that
                           these representations and warranties shall survive
                           the making of the loan, and for so long as any part
                           of the loan is outstanding, that:

                           1) You are properly incorporated under the laws of
                           THE CAYMAN ISLANDS and have, under these laws, the
                           power to make this agreement, to borrow and repay the
                           loan and to pay the interest and other monies payable
                           to the Bank;

                           2) All corporate action required on your part and on
                           the part of your shareholders, directors and officers
                           to authorize this agreement and its execution and
                           performance has been properly taken in accordance
                           with the laws of THE CAYMAN ISLANDS and with your own
                           constitution and this agreement has been validly
                           executed, is binding on you, and enforceable against
                           you in accordance with its terms;

                           3) All approvals from any government, tax, monetary
                           or other authorities to enable you to make this
                           agreement and to borrow and repay the loan and to pay
                           thereon in US Dollars and without deduction or
                           withholding of any taxes or other monies have been
                           obtained and are in full force and effect;

                           4) The making of this agreement and the borrowings
                           and repayments of the loan by you will not infringe
                           any other agreement to which you are a party;

                           5) No Event of Default has occurred;

                           6) You are not in default under any other agreement
                           to which you are a party nor are you the subject of
                           any actual, pending or threatened legal proceedings
                           either of which has or may have a material adverse
                           effect on your financial condition;

                           7) Your financial statements and all other financial
                           and other information delivered by you to the Bank
                           are true and accurate, do not omit any material facts
                           or other information which might make them misleading
                           and no material change has occurred since the date of
                           those

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 8

                           valuations or the dates when such other financial and
                           other information was delivered to the Bank. Every
                           notice of drawdown to be delivered by you under
                           Clause 6 above, shall operate as a warranty that
                           these representations and warranties are correct and
                           will remain unaltered and in full force and effect on
                           the relevant drawdown date;

FEES, EXPENSES & ADDITIONAL COSTS:

                           You shall pay to the Bank on demand all reasonable
                           costs, expenses and disbursements (including Stamp
                           Duty and legal fees on a full indemnity,
                           attorney-and-own-client basis) incurred by it in the
                           negotiation, preparation and completion of this
                           agreement and in the maintenance, protection and
                           enforcement of any of the Bank's rights hereunder
                           including but not limited to time and costs of in-
                           house legal counsel, the Bank's internal
                           administration and the costs of the Bank's attorneys
                           on a full indemnity basis (that is, the costs charged
                           to the Bank). You further agree that all costs of
                           all proceedings for the enforcement of the security
                           referred to in this Letter or for obtaining payment
                           of the monies hereby secured or arising shall be
                           recoverable from you as a debt and shall be charged
                           on the security comprised herein. You shall also pay
                           to the Bank on demand any amount which the Bank may
                           certify to be necessary to compensate the Bank for
                           any increased costs or reduction in return resulting
                           from compliance with any change in, or in the
                           interpretation of, any law or regulation or any
                           official directive or request (whether or not having
                           the force of law) including without limitation any
                           relating to mandatory liquid asset and special
                           deposit requirements, which certificate shall in the
                           absence of manifest error be conclusive. You further
                           authorise the Bank (at its sole option in each
                           instance) to deduct any such costs and expenses from
                           time to time from any of your accounts or from any
                           undrawn balances available to you under this Letter.

AMENDMENTS, WAIVERS ETC.:

                           The provisions of this Letter may only be waived or
                           varied in writing signed by you and the Bank. No
                           delay or failure by the Bank in exercising any right
                           or remedy shall be construed or take effect as a
                           waiver or release of that right or remedy and the
                           Bank shall always be entitled to exercise

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 9

                           all its rights and remedies unless it shall have
                           expressly waived them in writing. The remedies
                           provided in the Letter are cumulative and are not
                           exclusive of any remedies provided by law. Each of
                           the provisions of this Letter is severable and
                           distinct from the others, and if at any time one or
                           more of such provisions is or becomes invalid,
                           illegal or unenforceable, the remaining provisions of
                           this letter shall not in any way be affected or
                           impaired thereby.

ASSIGNABILITY:             You may not assign or transfer any rights or
                           obligations under this letter or any security
                           documents; however the Bank may on giving written
                           notice to you assign or transfer all of its rights
                           and obligations under this letter and/or any of the
                           security documents. You will enter into all documents
                           specified by the Bank to be necessary to give effect
                           to any such assignment or transfer. The Bank may upon
                           giving notice to you change its lending office at any
                           time.

LAW:                       This agreement shall be governed by and construed in
                           accordance with the laws of Bermuda.

REPAYMENT ON DEMAND:       Notwithstanding the foregoing and in accordance with
                           normal banking practice in Bermuda, the Bank reserves
                           the right to demand immediate repayment in full of
                           any monies due to the Bank under this Letter and / or
                           cancel with immediate effect the availability of any
                           undrawn monies made available to you under this
                           Facility Letter.

ACCEPTANCE:                Kindly acknowledge your agreement to the terms and
                           conditions as set out herein by signing and returning
                           the enclosed copy of this letter. Your acceptance
                           must be received on or before 18"' January 2002, or
                           this offer will become null and void.

Yours faithfully,

/s/ Kathy A Lloyd-Hines                                 /s/ Michael McWatt
Kathy A Lloyd-Hines                                     Michael McWatt
AVP & Relationship Manager                              Senior Vice President
Corporate Banking                                       Credit Risk Management

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 10

                 (THIS PORTION TO BE COMPLETED BY THE BORROWER)

In consideration of the premises we hereby agree to and accept the terms and
conditions of the agreement constituted by this Letter (which agreement shall
become legally binding in accordance with its terms).

___________________________________________________    Dated:___________________
For and on behalf of Ocean Conversion (Cayman) Ltd.

___________________________________________________
For and on behalf of Edmund Gibbons Ltd.               Dated:___________________

Accepted and authorised for advance of funds:

By:________________________________

Date:______________________________

<PAGE>

Ocean Conversion (Cayman) Ltd.
January 2nd, 2002
Page 11

                                 SCHEDULE NO. 1

                              CONDITIONS PRECEDENT

From: OCEAN CONVERSION (CAVMAN) LIMITED

1.       Your acceptance of this credit facility in accordance with the terms
         and conditions of this Letter.

2.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving and authorizing the signing of this Facility Letter
         and authorizing a person or persons to sign all notices and
         communications in respect of this facility.

3.       Receipt of a Registered First Priority fixed & floating charge over the
         assets of The Company in its standard form.

4.       Receipt of the Attorneys Letter of Confirmation.

5.       Receipt of a fully comprehensive insurance policy over the plant at Red
         Gate Road, Grand Cayman, with the Bank listed as Loss Payee.

6.       Payment in cleared funds of the facility fee specified in Clause 13 of
         this Letter.

7.       Copies of the duly signed Contract with Cayman Water Authority and
         Licence.

From: EDMUND GIBBONS LIMITED

1.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving the Guarantee and authorising a person or persons
         to sign the necessary documentation.

2.       Receipt of the Attorneys Letter of Confirmation.

3.       Receipt of Guarantee for $2,400,000.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>10
<FILENAME>g80228exv10w29.txt
<DESCRIPTION>BANK OF BUTTERFIELD COMMITMENT LETTER 4/10/02
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.29

                       [LETTERHEAD OF BANK OF BUTTERFIELD]

April 10, 2002

Ocean Conversion (BVI) Limited
Suite 381
48 Par-La-Ville Road
Hamilton HM 11

ATTENTION: DR. WILLIAM T. ANDREWS
           MANAGING DIRECTOR

Dear Sirs,

Thank you for your interest in a credit facility from the Bank of Butterfield.
The Bank is pleased to make a U.S. Dollar facility available to you subject to
the following terms and conditions:-

BORROWER:                  OCEAN CONVERSION (BVI) LIMITED

AMOUNT:                    US $1,250,000 (One Million Two Hundred Fifty Thousand
                           United States Dollars)

EVIDENCE OF DEBT:          Demand promissory note(s)

PURPOSE:                   To finance expansion of reverse osmosis plant in
                           British Virgin Islands.

TERM:                      Subject to the terms of this Letter, the loan will
                           mature on May 31, 2006.

CONDITIONS PRECEDENT:      The Bank shall not be obliged to permit any drawing
                           of monies under this Letter until it has received as
                           conditions precedent, in each case in form and
                           substance satisfactory to the Bank, the documents,
                           items and evidence specified in Schedule #1 to this
                           Letter (or the Bank having waived any one or more of
                           them in the Bank's absolute discretion and subject to
                           any condition(s) we may think fit). The Bank's
                           obligation to permit any drawing is conditional upon
                           you being in compliance at the relevant time with the
                           terms and conditions of, and there being no breach of
                           or default under this Letter, and such obligation
                           shall be subject to the Bank's rights under this
                           Letter.

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 2

DRAWDOWN:                  Subject to the terms of this Letter, you may draw
                           down on the facility (in integral multiples of
                           $100,000.00,) on any business day, upon giving the
                           Bank not less than three (3) business days prior
                           written notice stating the proposed drawdown date.
                           Such notice shall constitute a representation and
                           warranty to the effect that, on the date of that
                           notice, the representations and warranties is
                           detailed later in this Letter remain true and correct
                           and that the undertakings have been fully performed.
                           On the drawdown date the Bank shall (if satisfied
                           that your payment instructions are consistent with
                           the expressed purpose(s) of this credit facility) pay
                           the loan advance to such person and bank account as
                           you may instruct in the notice of drawdown. In this
                           Letter, "drawdown date" means the date on which an
                           advance is made to you under this facility and
                           "business day" means a day (not being Saturday,
                           Sunday or a public holiday) on which banks are open
                           in Bermuda, London and New York for business of the
                           kind contemplated by this Letter.

RATE OF INTEREST:          Interest on the monies drawn by you under this Letter
                           shall be calculated, in respect of each Interest
                           Period at the rate determined by the Bank two (2)
                           business days before the Interest Period at being
                           1.5% ABOVE THE 3 MONTH RATE the Bank is offered funds
                           in the London InterBank Euro-Dollar market in the
                           approximate amount of the monies drawn or to be drawn
                           by you under this Letter. In this Letter, "Interest
                           Period" shall mean each successive period of 90 days
                           calculated from the date of initial drawdown and
                           notified to the Bank on or before the date (in this
                           Letter the "Interest Review Date") which is two
                           business days before the beginning of that Interest
                           Period.

INTEREST PAYMENT:          You shall pay interest to the Bank on the principal
                           amount of your indebtedness from time to time
                           outstanding under this Letter, at the rate of
                           interest determined in accordance with this Letter.
                           You shall pay such interest QUARTERLY in arrears
                           calculated from the date of initial drawdown on the
                           basis of a 360 day year, provided that if any such
                           interest payment should fall due and payable on a day
                           which is not a business day as herein defined the
                           payment shall be made on the next following business
                           day.

REPAYMENTS:                Commencing December 31, 2002, the loan is to be
                           repaid by EQUAL SEMI-ANNUAL INSTALLMENTS OF $125,000
                           to December 31, 2005 to cover principal and a
                           balloon payment of $375,000 on May 31, 2006 which
                           should retire the loan within the agreed term;
                           however, should a balance be remaining, or in the
                           event of a change in the Rate of Interest, the Bank
                           reserves the right to

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 3

                           require a further balloon payment or make such
                           adjustment as to principal and interest as is
                           necessary in order that the loan is repaid in full
                           within the agreed term.

PREPAYMENTS:               You may prepay all or (part, limited to a minimum of
                           $100,000 at any one time) of the total amount of
                           monies hereunder on any Interest Review Date,
                           provided that you shall have given the Bank not less
                           than three (3) business days prior notice of such
                           prepayment (which shall be irrevocable and binding).
                           Such prepayment shall be made together with accrued
                           interest on the amount prepaid.

LATE PAYMENTS:             If you fail to pay in full any amount due and payable
                           to the Bank under this Letter, whether principal,
                           interest, fees, costs, expenses or otherwise, then
                           you shall pay the Bank interest on the unpaid amount
                           from its due date to the date of actual payment (as
                           well before as after judgement) at a rate of interest
                           calculated as the sum of:

                           1)  the principal interest rate;

                           2)  the excess cost of interest that the Bank would
                           incur in funding the overdue amount in the London
                           Interbank Market for such period as the Bank
                           determines to be reasonable in the circumstances (as
                           to which a certificate of the Bank shall be
                           conclusive evidence);

                           3)  2%. Such interest shall be payable at any time on
                           demand. Payments received by the Bank shall be
                           applied first towards costs and expenses, then
                           towards fees and accrued interest and then towards
                           repayment of principal.

EARLY REPAYMENT FEE:       Should the borrowing be repaid prior to any Interest
                           Review Date, the Bank reserves the right to charge an
                           early repayment fee.

FACILITY FEE:              A facility fee of 1% (US $12,500.) is payable to the
                           Bank upon acceptance of this Letter.

SECURITY:

                           -   The Bank will take a Registered First Priority
                               Fixed & Floating Charge for $1,250,000 over all
                               assets of Ocean Conversion (BVI) Limited in its
                               standard form. (The Charge is to be duly
                               registered in BVI and Bermuda).

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 4

                           -   The Bank requires that a full Comprehensive
                               Insurance Policy over the Plant in British Virgin
                               Islands be taken out with the Bank listed as
                               'Loss Payee'. The Bank will require confirmation
                               of such from the Insurance Company.

                           -   The Bank will require a Guarantee for US$343,750
                               from Edmund Gibbons Limited. It is strongly
                               recommended that Edmund Gibbons Limited takes
                               independent legal advice in respect of the
                               guarantee and the obligation thereunder.

                           -   The Bank will require a Guarantee for US$343,750
                               from North American Mortgage & Finance. It is
                               strongly recommended that North American Mortgage
                               & Finance takes independent legal advise in
                               respect of the guarantee and the obligation
                               thereunder.

                           -   The Bank will require a Guarantee for US$562,500
                               from Sage WATER Holdings Ltd. It is strongly
                               recommended that Sage Investment Holdings Ltd.
                               takes independent legal advice in respect of the
                               guarantee and the obligation thereunder.

DOCUMENTATION:

                           FROM: BORROWER

                           -   The Bank will require a Certified Board
                               Resolution of the Borrower, authorizing entry
                               into this Credit Facility, the mortgaging of its
                               assets and advising who is authorized to sign the
                               necessary documentation.

                           -   The Bank require an Attorney's Confirmation that
                               the Borrower has the powers to enter into this
                               Credit Facility and mortgage its assets in the
                               proposed manner, and that these are for lawful
                               business objects of the Borrower.

                           -   The Bank will require a Certified List of
                               Officers and Directors of the Borrower.

                           FROM: EDMUND GIBBONS LIMITED

                           -   Duly signed Guarantee from Edmund Gibbons Limited
                               in the Bank's standard form.

                           -   The Bank will require a Certified Board
                               Resolution of Edmund Gibbons Limited, covering
                               the Guarantee and advising who is authorised to
                               sign the necessary documentation on behalf of the
                               Company.

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 5

                           -   The Bank will require an Attorney's Confirmation
                               that Edmund Gibbons Limited has the power to
                               enter into the loan transaction in proposed
                               manner and that these are for lawful business
                               objects of the Company.

                           FROM: NORTH AMERICAN MORTGAGE & FINANCE

                           -   Duly signed Guarantee from North American
                               Mortgage & Finance in the Bank's standard form.

                           -   The Bank will require a Certified Board
                               Resolution of North American Mortgage & Finance,
                               covering the Guarantee and advising who is
                               authorised to sign the necessary documentation on
                               behalf of the Company.

                           -   The Bank will require an Attorney's Confirmation
                               that North American Mortgage & Finance has the
                               power to enter into the loan transaction in
                               proposed manner and that these are for lawful
                               business objects of the Company.

                           FROM: SAGE WATER HOLDINGS LTD.

                           -   Duly signed Guarantee from Sage Water Holdings
                               Ltd. in the Bank's standard form.

                           -   The Bank will require a Certified Board
                               Resolution of Sage Water Holdings Ltd., covering
                               the Guarantee and advising who is authorised to
                               sign the necessary documentation on behalf of the
                               Company.

                           -   The Bank will require an Attorney's Confirmation
                               that Sage WATER Holdings Ltd. has the power to
                               enter into the loan transaction in proposed
                               manner and that these are for lawful business
                               objects of the Company.

COVENANTS:                 The Company is authorized to pay dividend and profit
                           share provided that a minimum cashflow of $500,000
                           after debit service is retained to support the
                           operating costs of the plant.

UNDERTAKINGS               You undertake to the Bank that, so long as the
                           agreement constituted by this Letter remains
                           operative, you will:

                           1)  deliver to the Bank within ninety (90) days after
                           the end of your financial years, copies of your
                           audited financial statements for those years;

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 6

                           2)  at the same time as they are delivered to your
                           shareholders, copies of all annual reports and other
                           information of a financial or business nature;

                           3)  quarterly or other regular management reports as
                           may be required by the Bank, in form satisfactory to
                           the Bank;

                           4)  upon request, copies of annual financial
                           statements of North American Mortgage & Finance;

                           5)  upon request, copies of annual financial
                           statements of Sage Investment Holdings Ltd.;

                           5)  promptly inform the Bank of your financial
                           position generally which would be material to be
                           known to a director of you or to a lender to you.

                           6)  notify us of any default by BVI Government Water
                           Authority under the Terms of the Contract Document.

                           7)  maintain in full force and effect all government,
                           tax, monetary and other approval required to enable
                           you to maintain your corporate status, to continue to
                           carry on your business and affairs, and to repay the
                           loan and to pay interest thereon in US dollars
                           without deduction or withholding of any taxes or
                           other monies:

                           8)  pay all sums falling due under this Letter on
                           their due dates.

CHANGES IN CIRCUMSTANCES:

                           1)  If it becomes illegal under any law applying to
                           the Bank for it to make or maintain the credit
                           facility under this Letter, then the Bank's
                           commitment to continue the credit facility shall end
                           and any monies drawn hereunder shall be repaid in
                           full on the last day of the current period.

                           2)  If, as a result of any change in any applicable
                           law or of any directive of any central bank or
                           monetary authority (whether or not having the force
                           of law), the cost to the Bank of making or
                           maintaining the credit accommodation under this
                           Letter is increased then you shall pay to the Bank
                           the full amount of such increased cost on receipt of
                           the Bank's written notice specifying the change and
                           the increased cost incurred by the Bank (which notice
                           shall, absent manifest error, be conclusive). In such
                           event, you may repay the principal outstanding
                           indebtedness hereunder on the last date of the
                           current Interest Period on

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 7

                           paying the full amount of any increased costs and all
                           interest accrued to that day.

                           3)  If, not later than two business days before an
                           Interest Review Period it appears to the Bank either
                           that funds will not be available to it in the London
                           Interbank Market for the next Interest Period or that
                           LIBOR will not accurately represent the cost to the
                           Bank of making or maintaining the loan during that
                           Interest Period, then the Bank shall notify you
                           accordingly and agree with you an alternative basis
                           for funding the loan or an alternative interest rate
                           for that Interest Period and any such basis or rate
                           agreed within twenty five days from the beginning of
                           the Interest Period shall be retroactive to its
                           beginning. If no agreement is reached within
                           twenty-five days then you shall repay the loan in
                           full on the thirtieth day.

REPRESENTATIONS AND WARRANTIES:

                           You represent and warrant to the Bank and so that
                           these representations and warranties shall survive
                           the making of the loan, and for so long as any part
                           of the loan is outstanding, that:

                           1)  You are properly incorporated under the laws of
                           British Virgin Islands and have, under these laws,
                           the power to make this agreement, to borrow and repay
                           the loan and to pay the interest and other monies
                           payable to the Bank;

                           2)  All corporate action required on your part and on
                           the part of your shareholders, directors and officers
                           to authorize this agreement and its execution and
                           performance has been properly taken in accordance
                           with the laws of British Virgin Islands and with your
                           own constitution and this agreement has been validly
                           executed, is binding on you, and enforceable against
                           you in accordance with its terms;

                           3)  All approvals from any government, tax, monetary
                           or other authorities to enable you to make this
                           agreement and to borrow and repay the loan and to pay
                           thereon in US Dollars and without deduction or
                           withholding of any taxes or other monies have been
                           obtained and are in full force and effect;

                           4)  The making of this agreement and the borrowings
                           and repayments of the loan by you will not infringe
                           any other agreement to which you are a party;

                           5)  No Event of Default has occurred;

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 8

                           6)  You are not in default under any other agreement
                           to which you are a party nor are you the subject of
                           any actual, pending or threatened legal proceedings
                           either of which has or may have a material adverse
                           effect on your financial condition;

                           7)  Your financial statements and all other financial
                           and other information delivered by you to the Bank
                           are true and accurate, do not omit any material facts
                           or other information which might make them misleading
                           and no material change has occurred since the date of
                           those valuations or the dates when such other
                           financial and other information was delivered to the
                           Bank. Every notice of drawdown to be delivered by you
                           under Clause 6 above, shall operate as a warranty
                           that these representations and warranties are correct
                           and will remain unaltered and in full force and
                           effect on the relevant drawdown date.

FEES, EXPENSES & ADDITIONAL COSTS:

                           You shall pay to the Bank on demand all reasonable
                           costs, expenses and disbursements (including Stamp
                           Duty and legal fees on a full indemnity,
                           attorney-and-own-client basis) incurred by it in the
                           negotiation, preparation and completion of this
                           agreement and in the maintenance, protection and
                           enforcement of any of the Bank's rights hereunder
                           including but not limited to time and costs of
                           in-house legal counsel, the Bank's internal
                           administration and the costs of the Bank's attorneys
                           on a full indemnity basis (that is, the costs charged
                           to the Bank). You further agree that all costs of all
                           proceedings for the enforcement of the security
                           referred to in this Letter or for obtaining payment
                           of the monies hereby secured or arising shall be
                           recoverable from you as a debt and shall be charged
                           on the security comprised herein. You shall also pay
                           to the Bank on demand any amount which the Bank may
                           certify to be necessary to compensate the Bank for
                           any increased costs or reduction in return resulting
                           from compliance with any change in, or in the
                           interpretation of, any law or regulation or any
                           official directive or request (whether or not having
                           the force of law) including without limitation any
                           relating to mandatory liquid asset and special
                           deposit requirements, which certificate shall in the
                           absence of manifest error be conclusive. You further
                           authorise the Bank (at its sole option in each
                           instance) to deduct any such costs and expenses from
                           time to time from any of your accounts or from any
                           undrawn balances available to you under this Letter.

AMENDMENTS, WAIVERS ETC.:

                           The provisions of this Letter may only be waived or
                           varied in writing signed by you and the Bank. No
                           delay or failure by the Bank in exercising any right
                           or remedy shall be construed or

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 9

                           take effect as a waiver or release of that right or
                           remedy and the Bank shall always be entitled to
                           exercise all its rights and remedies unless it shall
                           have expressly waived them in writing. The remedies
                           provided in the Letter are cumulative and are not
                           exclusive of any remedies provided by law. Each of
                           the provisions of this Letter is severable and
                           distinct from the others, and if at any time one or
                           more of such provisions is or becomes invalid,
                           illegal or unenforceable, the remaining provisions of
                           this letter shall not in any way be affected or
                           impaired thereby.

ASSIGNABILITY:             You may not assign or transfer any rights or
                           obligations under this letter or any security
                           documents; however the Bank may on giving written
                           notice to you assign or transfer all of its rights
                           and obligations under this letter and/or any of the
                           security documents. You will enter into all documents
                           specified by the Bank to be necessary to give effect
                           to any such assignment or transfer. The Bank may upon
                           giving notice to you change its lending office at any
                           time.

LAW:                       This agreement shall be governed by and construed in
                           accordance with the laws of Bermuda.

REPAYMENT ON DEMAND:       Notwithstanding the foregoing and in accordance with
                           normal banking practice in Bermuda, the Bank reserves
                           the right to demand immediate repayment in full of
                           any monies due to the Bank under this Letter and / or
                           cancel with immediate effect the availability of any
                           undrawn monies made available to you under this
                           Facility Letter.

ACCEPTANCE:                Kindly acknowledge your agreement to the terms and
                           conditions as set out herein by signing and returning
                           the enclosed copy of this letter. Your acceptance
                           must be received on or before May 15, 2002, or this
                           offer will become null and void.

Yours faithfully,

/s/ Kathy A. Lloyd-Hines                               /s/ Michael McWatt
- --------------------------                             ----------------------
Kathy A. Lloyd-Hines                                   Michael McWatt
AVP & Relationship Manager                             Senior Vice President
Corporate Banking                                      Credit Risk Management

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 10

                 (THIS PORTION TO BE COMPLETED BY THE BORROWER)

In consideration of the premises we hereby agree to and accept the terms and
conditions of the agreement constituted by this Letter (which agreement shall
become legally binding in accordance with its terms).

________________________________________________
For and on behalf of Ocean Conversion (BVI) Ltd.         Dated: 26-APR-02

________________________________________________
For and on behalf of Edmund Gibbons Ltd.                 Dated: 26-APR-02

________________________________________________
For and on behalf of North American Mortgage &           Dated: 26-APR-02
Finance

________________________________________________
For and on behalf of Sage WATER Holdings Ltd.            Dated: 26-APR-02

Accepted and authorised for advance of funds:

By:________________________________

Date:______________________________

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 11

                                 SCHEDULE NO. 1

                              CONDITIONS PRECEDENT

From: OCEAN CONVERSION (BVI) LIMITED

1.       Your acceptance of this credit facility in accordance with the terms
         and conditions of this Letter.

2.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving and authorizing the signing of this Facility Letter
         and authorizing a person or persons to sign all notices and
         communications in respect of this facility.

3.       Receipt of a Registered First Priority fixed & floating charge over the
         assets of The Company in its standard form.

4.       Receipt of the Attorneys Letter of Confirmation.

5.       Receipt of a fully comprehensive insurance policy over the plant in
         British Virgin Islands, with the Bank listed as 'Loss Payee'.

6.       Payment in cleared funds of the facility fee specified in Clause 14 of
         this Letter.

From: EDMUND GIBBONS LIMITED

1.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving the Guarantee and authorising a person or persons
         to sign the necessary documentation.

2.       Receipt of the Attorneys Letter of Confirmation.

3.       Receipt of duly signed Guarantee for $343,750.

From: NORTH AMERICAN MORTGAGE & FINANCE

1.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving the Guarantee and authorising a person or persons
         to sign the necessary documentation.

2.       Receipt of the Attorneys Letter of Confirmation.

3.       Receipt of duly signed Guarantee for $343,750.

<PAGE>

Ocean Conversion (BVI) Ltd.
April 10, 2002
Page 12

From: SAGE WATER    HOLDINGS LTD.

1.       Receipt of a certified Corporate Resolution from your Board of
         Directors approving the Guarantee and authorising a person or persons
         to sign the necessary documentation.

2.       Receipt of the Attorneys Letter of Confirmation.

3.       Receipt of duly signed Guarantee for $562,500.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>11
<FILENAME>g80228exv10w30.txt
<DESCRIPTION>DEBENTURE 5/29/02
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.30

                                    DEBENTURE

THIS DEBENTURE is made the 29th day of May Two Thousand and Two

BETWEEN: OCEAN CONVERSION (CAYMAN) LIMITED, a company incorporated under the
         Laws of the Cayman Islands, the registered office of which is at
         Campbell Corporate Services Ltd. P.O. Box 268GT, Scotiabank Building,
         Cardinal Avenue, George Town, Grand Cayman (hereinafter called "the
         Borrower")

                           of the One Part

AND:     THE BANK OF N. T. BUTTERFIELD & SON LTD., a bank registered in Bermuda,
         of P. O. Box HM 195, 65 Front Street, Hamilton, Bermuda (hereinafter
         called "the Bank")

                           of the Other part

WHEREAS:

(A)      The Bank has agreed to grant a loan to the Borrower in the amount of
         US$2.4 million upon having the same secured in the manner hereinafter
         appearing.

(B)      The proceeds of the loan shall be used by the Borrower to finance the
         cost of constructing a new reverse osmosis plant on land owned by the
         Water Authority of the Cayman Islands and described as the title to
         Cayman Islands registered Parcel 34 of Block 20B in the George Town
         East Registration Section of Grand Cayman. In order to secure
         repayment of the said sum, the Borrower has agreed to enter into this
         Debenture.

NOW THIS DEED WITNESSETH as follows:-

1.       INTERPRETATIONS AND DEFINITIONS

         (a)      In this Deed:

                  (i)      "Charged Assets"     means the goodwill,
                                                undertaking, property, assets,
                                                revenues and rights charged
                                                under sub-clause 4(a);

                  (ii)     "Charged Property"   means the property referred to
                                                in sub-clause 4(a)(i);

                  (iii)    "Default Rate"       means such rate of interest as
                                                shall be calculated by the Bank
                                                from time to time to be the sum
                                                of the Interest Rate, plus the
                                                excess cost of interest that
                                                the Bank would incur in funding
                                                the overdue amount in the London
                                                Interbank Market for such period
                                                as the Bank determines to be
                                                reasonable in the circumstances
                                                (as to which a certificate of
                                                the Bank shall be conclusive
                                                evidence) plus two Percentum
[SEAL]                                          (2%)Per annum;

                  (iv)     "Credit Facility"    Means the corresponding Credit
                                                Facility made available under
                                                the Loan Agreement;

                  (v)      "Events of Default"  means the events of default set
                                                out in clause 6; .

<PAGE>

                                      - 2 -

                  (vi)     "Interest Rate"      means the interest rate set out
                                                in sub-clause 3(a);

                  (vii)    "Loan Agreement"     means the Bank's commitment
                                                letter to the Borrower dated 2
                                                January 2002 (and agreed and
                                                accepted on behalf of the
                                                Borrower on 21 January 2002) as
                                                amended or substituted by
                                                agreement in writing by the Bank
                                                and the Borrower from time to
                                                time;

                  (viii)   "Principal Sum"      shall mean the demand loan in
                                                the sum of US$2,400,000.00 or
                                                so much thereof as is
                                                outstanding from time to time;

                  (ix)     "Receiver"           has the meaning given to it in
                                                sub-clause 10(a) and shall
                                                include any substituted
                                                receiver(s) and manager(s); and

                  (x)      "Securities"         means the property referred to
                                                in sub-clause 4(a)(ii).

         (b)      In this deed the expressions "the Borrower" and "the Bank"
                  where the context admits include their respective successors
                  and assigns whether immediate or derivative.

         (c)      Words importing any gender shall include any other gender and
                  words importing the singular number only shall include the
                  plural number and vice versa and words importing persons and
                  all references to persons shall include corporations and
                  firms.

         (d)      Unless the context otherwise requires, reference to clause,
                  sub-clause or schedule is to a clause, sub-clause or schedule
                  (as the case may be) of or to this deed.

         (e)      The clause headings do not form part of this deed, are for
                  convenience only and shall not be taken into account in its
                  construction or interpretation.

2.       COVENANT TO PAY MONEY

         (a)      The Borrower hereby covenants to repay to the Bank on demand
                  the Principal Sum together with:

                  (i)      interest to the date of repayment at such rates and
                           upon such terms as may from time to time be payable
                           hereunder;

                  (ii)     any commissions, fees and other charges charged by
                           the Bank to the Borrower; and

                  (iii)    all expenses incurred by the Bank in relation to the
                           Borrower or the preparation or enforcement of any
                           guarantees or security for any moneys, obligations or
                           liabilities hereby secured including legal and other
                           costs on a full indemnity basis.

         (b)      Pending the aforementioned demand, commencing 31st December
                  2002, the Borrower shall repay the aforementioned amounts by
                  way of equal semi-annual instalments of US$240,000.00 each
                  over a term of five (5) years. In the event a balance remains
                  at the end of the said term, the Bank reserves the right to
                  require a balloon payment.

3.       INTEREST

         (a)      The Interest Rate for each Interest Period shall be such rate
                  as shall be calculated by the Bank (as well after as before
                  judgement) to be one and one-half percent (1.5%) above the
                  three (3) month rate the Bank is offered funds in the London
                  Interbank Euro Dollar market in the approximate amount of

<PAGE>

                                      - 3 -

                  the monies drawn or to be drawn by the Borrower under the Loan
                  Agreement on or immediately before the date which is two (2)
                  business days before the beginning of such Interest Period.
                  The Interest Rate shall be established two (2) business days
                  Prior to each Interest Period "Interest Period" shall mean
                  each successive period of 90 days calculated from the date of
                  initial drawdown.

         (b)      The Borrower shall pay interest at the Interest Rate (or at
                  the Default Rate during the continuation of any Event of
                  Default) whether before or after judgement to the date of
                  payment on (i) all commission, fees and other charges and any
                  legal and other costs, charges and expenses incurred by the
                  Bank in relation to the Borrower or the assets charged under
                  this deed or in enforcing the security charged under this
                  deed; and (ii) all money and liabilities due under this deed;

         (c)      The aforementioned interest shall be paid quarterly in arrears
                  calculated from the date of initial drawdown on the basis of a
                  360 day year; provided that if any such interest payment
                  should fall due and payable on a day which is not a business
                  day, the payment shall be made on the next following business
                  day.

4.       FIXED AND FLOATING CHARGES

         (a)      As a continuing security for the payment of all money and the
                  discharge of all obligations and liabilities covenanted to be
                  paid or met or otherwise secured by the Borrower under this
                  deed the Borrower as beneficial owner hereby charges to the
                  Bank:

                  (i)      all freehold and leasehold property of the Borrower
                           (excluding the Borrower's Cayman Islands leasehold
                           property interest in Cayman Islands registered Parcel
                           34 of Block 20B in the George Town East Registration
                           Section of Grand Cayman (the "Red Gate Road Plant
                           Property") and Parcel 219 of Block 32B in the Lower
                           Valley Registration Section of Grand Cayman (the
                           "Lower Valley Plant Property")) both present and
                           future and all buildings and fixtures (including
                           trade fixtures), plant machinery, vehicles, computers
                           and office and other equipment of the Borrower
                           (which for the avoidance of doubt excludes the
                           seawater desalination plants operated by the Borrower
                           but which are not its property such as, at the date
                           hereof, the seawater desalination plants at the Red
                           Gate Road Property and the Lower Valley Property)
                           both present and future (excluding stock in trade of
                           the Borrower) from time to time on any such property
                           with the benefit of all existing and future leases,
                           underleases, tenancies and agreements relating to
                           such property (including all rents and profits from
                           such property) ("the Charged Property");

                  (ii)     all stocks, shares, bonds and securities of any kind
                           whether marketable or otherwise and all other
                           interests including (but not limited to) loan capital
                           of the Borrower both present and future in any
                           company, firm, consortium or entity including all
                           allotments, accretions, offices, rights, benefits and
                           advantages at any time accruing, offered or arising
                           in respect of or incidental to such stocks, shares,
                           bonds and securities and all stocks, shares, rights,
                           money or property accruing to them or offered at any
                           time by way of conversion, redemption, bonus,
                           preference, option or otherwise in respect of them
                           ("the Securities");

                  (iii)    all book and other debts, revenues and claims both
                           present and future (including things in action which
                           may give rise to a debt, revenue or claim) due or
                           owing or which may become due or owing to or
                           purchased or otherwise acquired by the Borrower
                           (including, without limitation, all payments due to
                           the Borrower from the Water Authority of the Cayman
                           Islands under a 26 October 2001 Contract with respect
                           to the procurement of and operating contract for a
                           sea water desalination plant at Red Gate Road, George
                           Town, Grand

<PAGE>

                                      - 4 -

                           Cayman) and the full benefit of all rights and
                           remedies relation to such book and other debts,
                           revenues and claims including (but not limited to)
                           any negotiable or non-negotiable instruments,
                           guarantees, indemnities, debentures, legal and
                           equitable charges and other security reservation of
                           proprietary rights, rights of tracing liens and all
                           other rights and remedies of any nature in respect of
                           such property;

                  (iv)     the uncalled capital, goodwill and all patents,
                           patent applications, trade marks, trade names,
                           registered designs and copyrights and all licences
                           and ancillary and connected rights relating to the
                           intangible property both present and future of the
                           Borrower;

                  (v)      the undertaking and all other assets of the
                           Borrower both present and future including (but not
                           limited to) the stock in trade of the Borrower and
                           the property described in sub-clauses 4(a)(i) to
                           4(a)(iv) (if and insofar as the charges on such
                           property or on any part or parts of such property
                           contained in this deed shall for any reason be
                           ineffective as fixed charges).

         (b)      The charges created by sub-clause 4(a) shall as regards the
                  property described in sub-clauses 4(a)(i) to 4(a)(iv) be fixed
                  charges and as to the property described in sub-clause
                  4(a)(v) shall be a first floating charge.

5.       RESTRICTIONS ON THE BORROWER

         (a)      The Borrower covenants that it will not (without the prior
                  consent in writing of the Bank):

                  (i)      sell, assign, discount, part or pledge, charge or
                           otherwise dispose of all or any part of the property
                           described in sub-clause 4(a)(iii) or deal with it
                           save in accordance with sub-clause 7(b)(xi); or

                  (ii)     (except for charges in favour of the Bank created
                           under this deed) create or attempt to create or
                           permit to subsist any mortgage, debenture, charge or
                           pledge or permit any lien or other incumbrance (save
                           a lien arising by operation of law in the ordinary
                           course of trading) to arise on or affect all or any
                           of the Charged Assets; or

                  (iii)    part with possession or transfer, sell, lease or
                           otherwise dispose of all or any of the Charged Assets
                           or attempt so to do (save in the case of assets
                           charged by way of floating charge only which may be
                           sold or otherwise disposed of in the usual course of
                           trading conducted at the date of this deed and for
                           the purpose of carrying on its business).

         (b)      Notwithstanding anything in this deed, if the Borrower
                  charges, pledges or otherwise incumbers, contrary to
                  sub-clause 5(a)(ii), any of the Charged Assets described in
                  sub-clause 4(a)(v) or attempts to do so without the prior
                  consent in writing of the Bank or if any creditor or other
                  person attempts to bring any distress, execution,
                  sequestration or other process against any of the Charged
                  Assets described in sub-clause 4(a)(v) the floating charge
                  created under this deed over those assets shall automatically
                  without notice operate as a fixed charge instantly on such
                  event occurring.

         (c)      During the continuance of this security the statutory and
                  other powers of leasing, letting, entering into agreements for
                  leases or lettings and accepting or agreeing to accept
                  surrenders of leases or tenancies shall not in relation to all
                  or any part of the Charged Assets be exercisable by the
                  Borrower nor shall the Borrower part with possession of all or
                  any part of the Charged Assets nor confer any licence, right
                  or interest to occupy nor grant any licence or permission to
                  assign, underlet or part with possession of all or any part
                  of the Charged Assets nor agree, suffer or permit any
                  variation or addition to the terms of any lease, tenancy or
                  licence without in every such case obtaining the prior consent
                  in writing of the Bank, save as permitted by sub-clause
                  5(a)(iii) above.

<PAGE>

                                      - 5 -

6.       EVENTS OF DEFAULT

         (a)      The Bank shall cease to be under any further commitment to the
                  Borrower and all money and liabilities secured under this deed
                  shall immediately become due and payable on demand and the
                  security shall become enforceable and if so required by the
                  Bank the Borrower shall immediately provide cash cover on
                  demand or a guarantee acceptable to the Bank for all
                  contingent liabilities of the Borrower to the Bank and for all
                  notes or bills, bonds, guarantees, indemnities and all
                  instruments entered into or agreed to be entered into by the
                  Bank for or at the request of the Borrower on the occurrence
                  of any of the following Events of Default:

                  (i)      if the Borrower fails to pay any sum which may from
                           time to time become due to the Bank on the due date
                           or fails to comply with any provision or to meet any
                           obligation or liability contained or incorporated
                           herein or in any facility from or other agreement
                           with the Bank;

                  (ii)     if the Borrower is in breach of any agreement,
                           covenant, condition or other provision, express or
                           implied, in or under any other agreement, deed or
                           document from time to time entered into between the
                           Borrower and the Bank (including without limitation
                           under the Loan Agreement or under any charge
                           registered in favour of the Bank over the Charged
                           Property pursuant to the Registered Land Law (1995
                           Revision) or any statutory modification or
                           re-enactment thereof) or any other obligation or duty
                           it may from time to time be under to the Bank
                           generally;

                  (iii)    if any representation, warranty, certificate or
                           undertaking made by the Borrower to the Bank from
                           time to time is or becomes incorrect or misleading in
                           any material respect;

                  (iv)     if the Borrower defaults or receives notice of
                           default under any trust deed, loan agreement,
                           debenture or any other agreement, deed or document or
                           any other obligation relating to borrowing or under
                           any guarantee or indemnity or if any borrowing or
                           other money payable under any borrowing or guarantee
                           or indemnity becomes or is capable of being declared
                           payable prior to its stated maturity or is not paid
                           when due or any incumbrances from time to time
                           created by the Borrower become enforceable;

                  (v)      if a petition is presented or an order made or a
                           resolution passed or analogous proceedings are taken
                           for appointing an inspector of or winding up the
                           Borrower or for dissolution or if the Borrower is
                           struck off the Register of Companies or a notice is
                           issued convening a meeting for the purpose of passing
                           any such resolution (save for the purpose of and
                           followed by an amalgamation or reconstruction not
                           involving insolvency on terms previously approved in
                           writing by the Bank);

                  (vi)     if an encumbrancer shall take possession or exercise
                           or attempt to exercise any power of sale or a
                           Receiver shall be appointed of the whole or any part
                           of the undertaking, property or assets of the
                           Borrower;

                  (vii)    if any judgment or order made against the Borrower is
                           not complied with within seven days or if an
                           execution, distress, sequestration or other process
                           is levied or enforced upon or sued out against any
                           part of the undertaking, property or assets or
                           revenues of the Borrower;

                  (viii)   if the Borrower fails to pay its debts as and when
                           they fall due or becomes or is deemed to be insolvent
                           or unable to pay its debts whether within the meaning
                           of Section 95 of the Companies Law (2001 Second
                           Revision) or otherwise or the Borrower proposes or

<PAGE>

                                      - 6 -

                           enters into any composition or arrangement with its
                           creditors generally or any class of its creditors;

                  (ix)     if the Borrower without the prior written consent of
                           the Bank ceases or threatens to cease to carry on its
                           business or any part thereof the Bank considers
                           material in the normal course or changes the nature
                           or mode of conduct of its trading in any respect
                           which the Bank may consider material;

                  (x)      if the undertaking, property or assets of the
                           Borrower or any part thereof from time to time
                           considered by the Bank to be material is sold,
                           disposed of or compulsorily acquired (otherwise than
                           in the normal course of trading for the purpose of
                           carrying on business or on terms previously approved
                           in writing by the Bank) whether in a single
                           transaction or a number of transactions or is
                           nationalised, seized, forfeited or appropriated;

                  (xi)     if any guarantee, indemnity or other security created
                           in favour of the Bank is in jeopardy or is not or
                           ceases to be in full force and effect or is voidable
                           or unenforceable or is disputed, revoked or
                           terminated or it becomes unlawful or impossible for
                           the Bank to exercise any right or power vested in it
                           under any such security and is considered by the Bank
                           to be material;

                  (xii)    if any licence, authorisation, consent or
                           registration necessary or desirable to enable the
                           Borrower to comply with its obligations to the Bank
                           or to carry on its business in the normal course
                           shall be revoked, withheld, materially modified or
                           fail to be granted or perfected or shall cease to
                           remain in full force and effect;

                  (xiii)   if by or under the operation of any Government the
                           management of the Borrower or its authority in the
                           conduct of its business is curtailed to the point of
                           making it effectively inoperative by any seizure or
                           intervention or proceedings of any nature;

                  (xiv)    If the Borrower makes or attempts to make any
                           alterations to the provisions of its Memorandum or
                           Articles of Association which might, in the opinion
                           of the Bank, affect its interests hereunder or shall
                           fail or neglect to comply with any or all of the
                           provisions of the Companies Law (2001 Second
                           Revision) or any statutory modification or
                           re-enactment thereof or any other of the laws of the
                           Cayman Islands in so far as the same may relate to
                           it;

                  (xv)     if the Borrower shall without obtaining the prior
                           written consent of the Bank by its directors,
                           shareholders or otherwise declare and pay any
                           dividends or capital distributions or repay any
                           shareholder loans or any capital or make any capital
                           expenditure whatever or make any other expenditures
                           otherwise than in the ordinary course of business or
                           permit or cause to be done anything that will result
                           in any change in the shareholdings as constituted on
                           the date hereof;

                  (xvi)    if control of the Borrower is acquired by any person
                           or company or group of connected persons not having
                           control of the Borrower at the date hereof (unless
                           with the prior consent in writing of the Bank not to
                           be unreasonably withheld) where "control" means the
                           power of any person or company or group of connected
                           persons to control the composition of the Board of
                           Directors of the Borrower or otherwise secure
                           (whether through the holding of shares directly or
                           through nominees, the possession of voting power or
                           by virtue of any powers conferred by the Memorandum
                           or Articles of Association of the Borrower or any
                           other document or agreement) that the affairs of the
                           Borrower are conducted in accordance with the wishes
                           of that person or company or group of connected
                           persons;

<PAGE>

                                      - 7 -

                  (xvii)   if any of the foregoing events occurs in relation to
                           (i) any third party which now or hereafter has
                           guaranteed or provided security for or given an
                           indemnity in respect of any money, obligation or
                           liability hereby secured or (ii) any subsidiary or
                           holding company of the Borrower or of any such third
                           party or (iii) any subsidiary of any such holding
                           company or if any individual now or hereafter liable
                           as such third party shall commit an act of
                           bankruptcy, die or become of unsound mind;

                  (xviii)  if the Borrower shall without the prior consent in
                           writing of the Bank create or purport or attempt to
                           create any mortgage, pledge, lien, charge, assignment
                           or other encumbrance ranking or which by any means
                           may come to rank in whole or in part pari passu with
                           or in priority to or subordinate to any of the
                           charges hereby created;

                  (xix)    if in any country in which the Borrower carries on
                           business or has assets any event occurs which
                           corresponds with or has an effect similar to any of
                           the foregoing events or if the Borrower becomes
                           subject to proceedings or an order, appointment or
                           filing under the insolvency laws of such country, or

                  (xx)     if at any time the Borrower shall in good faith
                           determine that a material adverse change in the
                           financial condition of the Borrower has occurred or
                           that the Borrower is unlikely to be able to meet any
                           of its obligations hereunder.

         (b)      The Borrower hereby covenants immediately to notify the Bank
                  in writing of the occurrence of any of the Events of Default
                  specified in clause 6(a) or of the occurrence of any event
                  which with the lapse of time or giving of notice would or may
                  constitute an Event of Default.

7.       COVENANTS BY THE BORROWER

         (a)      The Borrower hereby represents and warrants to the Bank that
                  (i) it is a duly organised corporation existing in good
                  standing under the Laws of the Cayman Islands, (ii) it is duly
                  qualified to do business wherever necessary to carry on its
                  present operations, (iii) the making and performance of this
                  Debenture is within its powers having been duly authorised by
                  all necessary governmental and corporate approvals and does
                  not contravene any law or any contractual restriction binding
                  on the Borrower or the Memorandum and Articles of Association
                  of the Borrower, (iv) this Debenture is a legal, valid and
                  binding obligation of the Borrower enforceable against the
                  Borrower in accordance with its terms, and (v) there are no
                  pending or threatened actions or proceedings before any court
                  or administrative agency which may materially adversely affect
                  the Borrower or its financial conditions and operations.

         (b)      The Borrower hereby further covenants with the Bank that
                  during the continuance of this security the Borrower will at
                  all times and as applicable immediately:

                  (i)      notify the Bank by fax and confirm in writing of the
                           occurrence of any event which will or may in due
                           course constitute an Event of Default;

                  (ii)     conduct and carry on its business in a proper,
                           efficient and business-like manner and not make any
                           substantial alteration in the nature of or mode of
                           conduct of that business and keep or cause to be kept
                           proper books of account relating to such business;

                  (iii)    pay into such account as the Bank may direct all
                           money which it shall receive in respect of book or
                           other debts and without prejudice to the provisions
                           of this deed the Borrower shall not without the prior
                           consent of the Bank sell, factor, discount, charge or
                           assign any assets described in sub-clause 4(a)(iii)
                           or purport to do so and shall if called

<PAGE>

                                      - 8 -

                           upon by the Bank from time to time execute legal
                           assignments of any book or other debts to the Bank;

                  (iv)     observe and perform all covenants and stipulations
                           from time to time affecting its freehold or leasehold
                           property or the mode of user or enjoyment of such
                           property and not, without the prior consent in
                           writing of the Bank, enter into any onerous or
                           restrictive obligations affecting any such property
                           nor do or suffer or omit to be done any act, matter
                           or thing which would infringe any provision of any
                           statute, order or regulation from time to time in
                           force affecting any such property;

                  (v)      observe and perform all covenants and stipulations
                           from time to time affecting its patents, patent
                           applications, trade marks, trade names, registered
                           designs and copyrights and all other industrial or
                           intangible property or any licence or ancillary or
                           connected rights from time to time relating to
                           industrial or intangible property and preserve and
                           maintain and renew when necessary or desirable all
                           such licences and rights;

                  (vi)     use its best endeavours to enforce and, at its own
                           cost, institute, continue or defend all proceedings
                           relating to any of the Charged Assets;

                  (vii)    keep all buildings and erections and all plant,
                           machinery, fixtures, fittings, vehicles, computers
                           and office and other equipment and every part of such
                           property in good and substantial repair and in good
                           working order and condition and not pull down or
                           remove or sell or otherwise dispose of any of such
                           property without the prior consent in writing of the
                           Bank except in the ordinary course of use, repair,
                           maintenance or improvement. If the Borrower is at any
                           time in default in complying with this covenant the
                           Bank shall be entitled but not bound to repair and
                           maintain such property with power for the Bank, its
                           agents and their respective employees to enter any of
                           the Borrower's property for that purpose or to
                           inspect that property and any sum so expended by the
                           Bank shall be repayable by the Borrower to the Bank
                           on demand together with interest at the Default Rate
                           from the date of payment by the Bank;

                  (viii)   at its own expense insure and keep insured any of the
                           Charged Assets of an insurable nature with insurers
                           previously approved by the Bank in writing against
                           loss or damage by fire, burglary, theft, civil
                           commotion, explosion, aircraft, flood, storm,
                           tempest, lightning, burst pipes and such other risks
                           and contingencies as the Bank shall from time to time
                           request to the full replacement value of such assets
                           from time to time including fees of architects,
                           surveyors, engineers and all other professional fees
                           and demolition charges together (in the case of
                           leasehold properties) with loss of rent for 3 years
                           in the joint names of the Borrower and the Bank or,
                           at the option of the Bank, in the name of the
                           Borrower. The interest of the Bank shall be noted on
                           the policy and the policy shall contain such
                           provisions for the protection of the Bank as the
                           Bank may reasonably require. The Borrower must
                           maintain such other insurance policies (with the
                           interest of the Bank noted on such policies)
                           containing like provisions for the protection of the
                           Bank as are normally maintained by prudent companies
                           carrying on similar businesses. The Borrower shall
                           pay within one week of them becoming due all premiums
                           and other money necessary for effecting and keeping
                           up such insurances and on demand produce to the Bank
                           the policies of such insurance and proof of such
                           payments failing which the Bank may take out or renew
                           such insurances in any sum which the Bank may think
                           expedient and all money expended by the Bank under
                           this provision shall be reimbursed by the Borrower on
                           demand and bear interest at the Default Rate from the
                           date of

<PAGE>

                                      - 9 -

                           payment by the Bank up to the date of payment by the
                           Borrower. All money to be received by virtue of any
                           insurance maintained or effected by the Borrower on
                           the Charged Assets (whether or not in pursuance of
                           the obligations under this sub-clause) shall be paid
                           to the Bank (or if not paid by the insurers directly
                           to the Bank held on trust for the Bank) and shall at
                           the option of the Bank be applied in reduction of the
                           money obligations and liabilities secured under this
                           deed or in replacing, restoring or reinstating the
                           property or assets destroyed, damaged or lost (any
                           deficiency being made good by the Borrower);

                  (ix)     punctually pay and indemnify the Bank and any
                           Receiver appointed by it against all existing and
                           future rent, rates, taxes, duties, charges,
                           assessments, impositions and outgoings (whether
                           imposed by agreement, statute or otherwise and
                           whether in the nature of capital or revenue and even
                           if wholly novel) now or at any time during the
                           continuance of this security payable in respect of
                           all or any part of the Charged Assets or by the owner
                           or occupier of those assets. If any such sums shall
                           be paid by the Bank or by any such Receiver then the
                           sums shall be repaid by the Borrower on demand with
                           interest at the Default Rate from the date of
                           payment by the Bank or any such Receiver;

                  (x)      not (without the prior written consent of the Bank)
                           vary, surrender, cancel, assign, charge or otherwise
                           dispose of or permit to be forfeit any lease of
                           leasehold premises or any credit, sale, hire
                           purchase, rental or like agreement for any equipment
                           used in its business considered by the Bank to be
                           material and generally fulfil its obligations under
                           every such lease and agreement and when required,
                           produce to the Bank proof of all payments from time
                           to time due from the Borrower under such lease or
                           agreement;

                  (xi)     get in and realise all book and other debts and
                           claims charged under this deed in the ordinary
                           course of its business and pay into such account as
                           the Bank shall from time to time direct all money
                           which it may receive in respect of those book and
                           other debts and claims immediately on receipt and
                           pending such payment hold such money on trust for the
                           Bank (provided that the Company may use the same in
                           the usual course of trading conducted at the date of
                           this deed and for the purposes of carrying on the
                           business) and not (without the prior consent in
                           writing of the Bank) charge or otherwise dispose of
                           or release, exchange, compound, set off or grant time
                           or indulgence or otherwise deal with all or any of
                           those book and other debts and claims or purport so
                           to do;

                  (xii)    not (without the prior consent in writing of the
                           Bank) form or co-operate in the formation of,
                           purchase or acquire any new subsidiary, permit any
                           subsidiary to issue any share or loan capital except
                           to the Borrower or to a wholly-owned subsidiary of
                           the Borrower or transfer assets hereby charged to any
                           subsidiary save on terms previously approved in
                           writing by the Bank;

                  (xiii)   not do or cause or permit to be done anything which
                           may in any way depreciate, jeopardise or otherwise
                           prejudice the value to the Bank of the security
                           hereby charged and not (without the prior consent in
                           writing of the Bank) incur any expenditure or
                           liabilities of an exceptional or unusual nature;

                  (xiv)    deposit with the Bank, its solicitors or a nominee of
                           the Bank and permit the Bank, its solicitors or its
                           nominee during the continuance this security to hold
                           and retain the following:

                           I.       all deeds and documents of title relating to
                                    all freehold and leasehold property from
                                    time to time belonging to the

<PAGE>

                                     - 10 -

                                    Borrower (and the insurance policies
                                    relating to such property) excluding any in
                                    respect of the Red Gate Road Plant Property
                                    and the Lower Valley Plant Property;

                           II.      all stock and share certificates and
                                    documents of title relating to the
                                    Securities and such deeds of transfer in
                                    blank and other documents as the Bank may
                                    from time to time require for perfecting its
                                    title to the Securities (executed by or
                                    signed on behalf of the registered holder)
                                    or for vesting or enabling it to vest the
                                    Securities in itself or its nominees or in
                                    any purchaser;

                           III.     all assurance policies from time to time
                                    effected by the Borrower on the lives of key
                                    employees; and

                           IV.      all such documents relating to the Charged
                                    Assets as the Bank may from time to time
                                    require; and

                  (xv)     not (without the prior consent in writing of the
                           Bank) permit any person (i) to be registered as
                           proprietor of any freehold or leasehold property
                           present or future from time to time hereby charged
                           nor create or permit to arise any overriding interest
                           affecting such property, or (ii) to become entitled
                           to any proprietary right or interest which might
                           affect the value of any land, fixtures or fixed plant
                           and machinery hereby charged.

8.       FURTHER SECURITY

         The Borrower shall at any time if and when required by the Bank execute
         such further legal or other mortgages, fixed or floating charges or
         assignments in favour of the Bank as the Bank shall from time to time
         require over all or any of the Charged Assets both present and future
         to secure all moneys, obligations and liabilities covenanted under this
         deed to be paid or otherwise secured under this deed, such further
         mortgages, charges or assignments to be prepared by or on behalf of the
         Bank at the cost of the Borrower and to contain an immediate power of
         sale without notice and such other clauses for the benefit of the Bank
         as the Bank may reasonably require.

9.       Powers of the Bank

         At any time after the Bank shall have demanded payment or discharge of
         any money, obligation or liability hereby secured, in addition to all
         other powers or rights vested in it by law or otherwise, the Bank may,
         without any notice except as hereinafter provided and whether or not it
         shall have appointed a Receiver, enter into possession and sell all or
         any of the goodwill, undertaking, assets, rights and property hereby
         charged (provided that, in the case of the charge over the Charged
         Assets described in clause 4(a)(v), such charge shall, prior to the
         exercise of such power, operate as a fixed charge) or any part thereof
         at public or private sale or in any other manner and for such
         consideration and generally on such terms and conditions as the Bank
         may think fit. Upon any such sale, the Bank shall have the right to
         deliver, assign and transfer to each purchaser thereof such goodwill,
         undertaking, assets, rights or property in the name and on behalf of
         the Borrower. Each purchaser at any such sale shall hold the property
         so sold absolutely free from any equity or right of redemption of the
         Borrower who hereby specifically waives all rights of redemption, stay
         or appraisal which the Borrower has or may have under any rule or law
         or statute now existing or hereinafter adopted. The Bank shall give to
         the Borrower ten days written notice of its intention to make any such
         public or private sale. Such notice in case of public sale shall state
         the time and place fixed for such sale and in case of private sale the
         day on which such goodwill, undertaking, assets, rights and property or
         that portion thereof so being sold will first be offered for sale. Any
         such public sale shall be held at such time or times within ordinary
         business hours and at such place as the Bank may fix in the notice of
         such sale. At such sale, such goodwill, undertaking, assets, rights and
         property may be sold in one lot as an entirety or in separate parcels
         as the Bank may determine. The Bank shall not be obliged to make any
         public or private sale and may cause the same to be adjourned from time
         to time by announcement at the time and place fixed for the

<PAGE>

                                     - 11 -

         sale and such sale may be made at any time or place to which the same
         may be so adjourned. In case of any sale on credit or for future
         delivery the undertaking, assets, rights and property so sold may be
         retained by the Bank until the selling price is paid by each purchaser
         thereof but the Bank shall incur no liability in the case of the
         failure of such purchaser to take up and pay for such undertaking,
         assets, rights and property so sold and in case of any such failing
         such undertaking, assets, rights and property may again be sold upon
         like notice. The Bank instead of exercising the power of sale herein
         conferred upon it may proceed by a suit or suits at law or in equity to
         foreclose this Debenture and sell all or any of the goodwill,
         undertaking, property, assets and rights hereby charged or any part
         thereof under a judgment or decree of a court or courts of competent
         jurisdiction, the Borrower having been given due notice of all such
         action.

10.      APPOINTMENT AND POWERS OF RECEIVER

         (a)      At any time after the Bank shall have demanded payment or
                  discharge of any money, obligation or liability hereby secured
                  and the same shall not have been satisfied in full or if
                  requested by the Borrower, the Bank may in writing under its
                  common seal or under the hand of any director, officer or
                  manager for the time being of the Bank appoint any person to
                  be a Receiver of the undertaking, property, assets and rights
                  hereby charged or any part thereof (with power to authorise
                  any joint receiver to exercise any power independently of any
                  other joint receiver) and may remove any Receiver so appointed
                  and appoint another in his place. In addition to all other
                  powers vested in him by law or otherwise a Receiver shall have
                  the power on behalf and at the cost of the Borrower to do or
                  omit to do anything in relation to the undertaking, property
                  or assets charged hereby or any part thereof and in particular
                  (but without limitation), the following powers:-

                  (i)      to take possession of, collect and get in and give
                           receipts binding on the Borrower for all or any
                           property, assets and rights hereby charged and to
                           bring, defend or discontinue any proceedings or
                           submit to arbitration in the name of the Borrower or
                           otherwise as may seem expedient;

                  (ii)     to make calls conditionally or unconditionally on the
                           members of the Borrower in respect of uncalled
                           capital;

                  (iii)    to carry on, manage, develop, reconstruct, amalgamate
                           or diversify or authorise or concur in any such
                           action relating to, the business of the Borrower or
                           any part thereof and to exercise in respect of the
                           Securities, all voting or other powers or rights
                           available to a registered holder thereof in such
                           manner as he may think fit and to manage and conduct
                           the same without being responsible for loss or damage
                           and for any of those purposes to raise or borrow any
                           money from or incur any liability to the Bank or
                           others on such terms with or without security as he
                           may think fit and so that any such security may be
                           or include a charge on the whole or any part of the
                           property hereby charged ranking in priority to this
                           security or otherwise;

                  (iv)     whether forthwith or later, to sell or concur in
                           selling by public auction or private contract, and to
                           let or concur in letting and to accept surrenders,
                           grant licences or otherwise dispose of or deal with
                           all or any of the goodwill, undertaking, assets,
                           rights and property hereby charged in such manner and
                           for such consideration and generally on such termS
                           and conditions as the Receiver may think fit with
                           full power to convey or otherwise transfer such
                           goodwill, undertaking, assets, rights or property in
                           the name and on behalf of the Borrower or other the
                           estate owner and any such sale may be for cash,
                           debentures or other obligations, shares, stocks or
                           other valuable consideration and may be payable in a
                           lump sum immediately or by instalments spread over
                           such period as the Receiver shall think fit and so
                           that any consideration received in a form other than
                           cash shall ipso facto forthwith on receipt be and
                           become charged with the payment

<PAGE>

                                     - 12 -

                           of all moneys, obligations and liabilities secured
                           hereby. Plant, machinery and other fixtures may be
                           severed and sold separately from the premises
                           containing them without the consent of the Borrower
                           being obtained thereto;

                  (v)      to make any arrangements or compromise, allow time
                           for payment or enter into, abandon, cancel or
                           disregard any contracts which he shall think
                           expedient in the interests of the Bank;

                  (vi)     to make and effect all repairs, improvements and
                           renew such of the plant, machinery, chattels and
                           property of the Borrower as he shall think fit and
                           maintain, renew, take out or increase insurances;

                  (vii)    to promote the formation of companies with a view to
                           the same purchasing, leasing, licensing or otherwise
                           acquiring all or any of the goodwill, undertaking,
                           property, assets or rights of the Borrower or
                           otherwise;

                  (viii)   without any further consent by or notice to the
                           Borrower, exercise on behalf of the Borrower all the
                           powers, rights and provisions conferred on a landlord
                           or a tenant at law or under any lease, sub-lease or
                           other contract or agreement to which the Borrower is
                           a party relating to rents or otherwise in respect of
                           any part of the property hereby charged but without
                           any obligation to exercise any of such powers and
                           without any liability in respect of powers so
                           exercised or omitted to be exercised;

                  (ix)     to appoint managers, accountants, lawyers, agents,
                           officers, servants and workmen for any of the
                           aforesaid purposes at such salaries or remuneration
                           and for such periods and upon such terms as he or
                           they may determine; and

                  (x)      to sign any document, execute any deed and do all
                           such other acts and things as may be considered to be
                           incidental or conducive to any of the matters and
                           powers aforesaid and which he may and can lawfully do
                           as agent for the Borrower.

         (b)      All money received by such Receiver or by the Bank in the
                  exercise of any powers conferred by this Debenture shall be
                  applied after the discharge of any taxes or the remuneration
                  and expenses of such Receiver and all liabilities having
                  priority thereto in or towards satisfaction of such of the
                  moneys, obligations and liabilities hereby secured and in such
                  order as the Bank in its absolute discretion may from time to
                  time conclusively determine.

         (c)      A Receiver appointed by the Bank shall be the agent of the
                  Borrower and the Borrower shall alone be solely responsible
                  and liable for his acts, defaults or remuneration.

         (d)      Neither the Bank nor any Receiver shall be liable to account
                  as mortgagee in possession in respect of all or any of the
                  property charged hereby nor be liable for any loss upon
                  realisation or for any neglect or default or omission of any
                  nature whatsoever for which a mortgagee in possession might be
                  liable.

         (e)      No purchaser, chargor or chargee or other person or company
                  dealing with the Bank or with any Receiver appointed by it or
                  with its or his, attorneys or agents shall be bound or
                  concerned to see or enquire whether the powers exercised or
                  purported to be exercised have become exercisable or whether
                  any money remains due actually or contingently on the security
                  of this Debenture or as to the necessity or expediency of the
                  stipulations and conditions subject to which any sale shall
                  have been made or otherwise as to the propriety or regularity
                  of such sale, calling in, collection or conversion or to see
                  to the application of any money paid to the Bank and in the
                  absence of mala fides on the part of such purchaser,
                  mortgagor, mortgagee or other

<PAGE>

                                     - 13 -

                  person or company such dealing shall be deemed so far as
                  regards the safety and protection of such purchaser, chargor,
                  chargee person or company to be within the powers hereby
                  conferred and to be valid and effectual accordingly.

         (f)      The Borrower hereby covenants with the Bank on demand to pay
                  all costs, charges and expenses incurred by the Bank or by any
                  Receiver appointed by it in the exercise of any powers
                  conferred by this Debenture or which they or he shall properly
                  incur in or about the preservation or attempted preservation
                  of this security or of the goodwill, undertaking, property,
                  assets and rights hereby charged with interest at the highest
                  rate payable by the Borrower to the Bank.

11.      POWER OF ATTORNEY

         The Borrower by way of security hereby irrevocably appoints the Bank
         and the persons deriving title under it and any Receiver appointed
         hereunder jointly and also severally to be its attorney to execute and
         complete in favour of the Bank or its nominees or of any purchaser any
         documents which the Bank may require for perfecting its title to or for
         vesting the Securities or any property, assets or rights hereby charged
         or agreed to be charged in the Bank or its nominees or in any purchaser
         and otherwise generally for it and in its name and on its behalf and as
         its act and deed or otherwise to execute, seal and deliver and
         otherwise perfect and do any such legal or other mortgage, charge or
         assignment as aforesaid and all such deeds, assurances, agreements,
         instruments, acts and things which may be required for the full
         exercise of all or any of the powers hereby conferred or which may be
         deemed proper on or in connection with any sale or other disposition
         thereof or any of the purposes aforesaid. The Borrower hereby ratifies
         and confIrms and agrees to ratify and confirm any instrument, act or
         thing which any such attorney may execute or do.

12.      CONTINUING SECURITY

         (a)      This security shall be a continuing security notwithstanding
                  any settlement of account or other matter whatsoever and is in
                  addition to and shall not merge or otherwise prejudice or
                  affect any other right or remedy of the Bank or the security
                  created by any deposit of documents or any guarantee, lien,
                  pledge, bill, note, mortgage or other security now or
                  hereafter held by or available to the Bank and shall not be in
                  any way prejudiced or affected thereby or by the invalidity
                  thereof or by the Bank now or hereafter dealing with,
                  exchanging, releasing, modifying or abstaining from,
                  perfecting or enforcing any of the same or any rights which it
                  may now or hereafter have or giving time for payment or
                  indulgence or compounding with any other person liable.

         (b)      It shall be lawful for but not obligatory on the Bank to
                  advance and pay all sums of money necessary for the purpose of
                  remedying any breach or breaches of covenants or obligations
                  whether imposed on the Borrower under the provisions of this
                  Debenture or any collateral or additional charges or
                  securities hereto or implied by law and all monies so paid and
                  all costs and expenses incurred by the Bank in relation to any
                  payment or act by or on behalf of the Bank shall be repayable
                  on demand and in addition to the other monies hereby secured
                  and shall bear interest at the Default Rate.

13.      CURRENCY

         (a)      All moneys received or held by the Bank or by a Receiver under
                  this Debenture may from time to time after demand has been
                  made by the Bank be converted into such other currency as the
                  Bank considers necessary or desirable to cover the obligations
                  and liabilities (actual or contingent) of the Borrower in that
                  other currency at the then prevailing spot rate of exchange of
                  the Bank (as conclusively determined by the Bank) for
                  purchasing that other currency with the existing currency.

         (b)      Neither the Bank nor any Receiver shall be liable to the
                  Borrower for any loss resulting from any fluctuation in
                  exchange rates before or after the exercise of any of the
                  powers under this Debenture.

<PAGE>

                                     - 14 -

         (c)      No payment to the Bank (whether under any judgment or court
                  order or otherwise) shall discharge the obligation or
                  liability of the Borrower in respect of which it was made
                  unless and until the Bank shall have received payment in full
                  in the currency in which such obligation or liability was
                  incurred and to the extent that the amount of any such payment
                  shall on actual conversion into such currency fall short of
                  such obligation or liability (actual or contingent) expressed
                  in that currency, the Bank shall have a further separate cause
                  of action against the Borrower and shall be entitled to
                  enforce the charges hereby created to recover the amount of
                  the shortfall.

14.      INDEMNITY

         The Borrower hereby agrees to indemnify both the Bank and any Receiver
         against all losses, actions, claims, expenses, demands and liabilities
         whether in contract, tort, equity or otherwise now or hereafter
         incurred by it or him or by any manager, officer, director or employee
         for whose liability, act or omission it or he may be answerable,
         responsible or liable for anything done or omitted in tile exercise or
         purported exercise of the powers herein contained or occasioned by any
         breach by the Borrower or any of its covenants or other obligations to
         the Bank. The Borrower shall so indemnify the Bank and any such
         Receiver on demand and shall pay interest on the sums demanded at the
         Default Rate.

15.      MISCELLANEOUS

         (a)      Any statutory or other powers of granting or agreeing to grant
                  or of accepting or agreeing to accept surrenders of leases or
                  tenancies of the property hereby charged or any part thereof
                  shall not during the continuance of this security be capable
                  of being exercised by the Borrower without the prior written
                  consent of the Bank.

         (b)      No neglect, omission or forbearance on the part of the Bank to
                  take advantage of or enforce any right or remedy arising out
                  of any breach or non-observance or any covenant or condition
                  herein or in any collateral or additional charges or
                  securities hereto contained or implied shall be deemed to be
                  or operate as a general waiver of such covenant or condition
                  or the right to enforce or take advantage of the same in
                  respect of any breach or non-observance thereof either
                  original or recurring.

         (c)      Each of the provisions of this Debenture is severable and
                  distinct from the others and if at any time one or more of
                  such provisions is or becomes invalid, illegal or
                  unenforceable, the validity, legality and unenforceability of
                  the remaining provisions hereof shall not in any way be
                  affected or impaired thereby.

         (d)      Any demand or notice hereunder may, without prejudice to any
                  other effective mode of making the same, be deemed to have
                  been properly and effectively made, given and served to and on
                  the Borrower at any time by a letter sent to them by
                  registered post addressed to its registered office and signed
                  by the Bank or any manager, officer, director, secretary,
                  attorney, agent or lawyer on its behalf and every such demand
                  or notice posted in the Cayman Islands shall be deemed to have
                  been given and served 7 days following the posting thereof.
                  Any such notice or demand or any certificate as to the amount
                  at any time secured hereby shall be conclusive and binding
                  upon the Borrower if signed by an officer of the Bank.

         (e)      This Debenture shall, at the Borrower's expense, be impressed
                  in the first instance with the stamp duty due under the Stamp
                  Duty Law (2001 Revision) as amended as at the date hereof) to
                  cover the Principal Sum of US$2,400,000.00 secured hereby but
                  the Bank shall be at liberty and is hereby empowered at any
                  time or times hereafter (without any further licence or
                  consent on the part of the Borrower) to impress additional
                  stamp duty hereon or on any collateral or additional charges
                  or securities hereto at the Borrower's own cost and expense to
                  cover any sum or sums by which the Borrower's indebtedness to
                  the Bank may exceed the said amount and in the event of such
                  upstamping as aforesaid the Borrower hereby covenants and
                  agrees with the Bank that this Debenture and the property
                  hereby charged

<PAGE>

                                     - 15 -

                  and the properties comprised in any collateral or additional
                  charges or securities hereto shall stand security for such
                  additional sum or sums and be charged with the payment thereof
                  and all other monies including interest due hereunder.

16.      GOVERNING LAW

         This Debenture shall be governed and construed solely according to the
         laws of the Cayman Islands and the parties hereby submit to the
         non-exclusive jurisdiction of the Courts of the Cayman Islands.

<PAGE>

                                     - 16 -

IN WITNESS WHEREOF the parties hereto have caused this Debenture to be executed
as a Deed the day and the year first above written.

EXECUTED AS A DEED by            )
OCEAN CONVERSION                 ) /s/ [ILLEGIBLE]
(CAYMAN) LIMITED in the          ) -------------------------
presence of:-                    ) Director
                                 )
/s/ [ILLEGIBLE]                  ) /s/ [ILLEGIBLE] for CAMPBELL SECRETARIES LIMI
- -----------------------------    ) --------------------------
Witness                            Assistant Secretary

EXECUTED AS A DEED by The        )
Bank of N.T. Butterfield &       ) /s/ [ILLEGIBLE]
Son Ltd.                         ) --------------------------
in the presence of:-             ) Director Officer
                                 )
/s/ [ILLEGIBLE]                  ) __________________________
- ------------------------------   ) Director/Secretary
Witness                          )

                                                                          [SEAL]

<PAGE>

                                     - 17 -

I, John Wolf of Campbells, 4th Floor, Scotiabank Building, P.O. Box 884GT,
George Town, Grand Cayman, make oath and say:-

1.       That the foregoing Debenture bearing the date 29th day of May, 2002
         between Ocean Conversion (Cayman) Limited ("the Borrower") of the one
         part and The Bank of N. T. Butterfield & Son Ltd. of the other part
         was executed by the Borrower on the 11th day of April 2002.

2.       I was present and did see William T. Andrews a duly authorised Director
         and Melanie Jackson for and on behalf of Campbell Secretaries Limited
         the duly authorised Assistant Secretary of the Borrower execute the
         said Debenture as a deed for the purposes therein mentioned on the 11th
         day of April 2002 between the hours of 4.00 p.m. and 4.30 p.m. in the
         afternoon at George Town, Grand Cayman, Cayman Islands.

3.       The Borrower is a company formed under the Companies Law of the Cayman
         Islands with registered office situate at Campbell Corporate Services
         Ltd., P.O. Box 268 GT, Scotiabank Building, George Town, Grand Cayman,
         Cayman Islands.

4.       That the name subscribed as a witness attesting to tile due execution
         of the said Debenture by the Borrower is of the proper handwriting of
         me this deponent and I reside at No. 13 Pirates Lair, South Sound,
         Grand Cayman, Cayman Islands and I am an attorney-at-law.

                        _______________________________
                                     Witness

SWORN at George Town, Grand Cayman, Cayman Islands this 29th day of May 2002
before me.

                     _____________________________________
                         NOTARY PUBLIC - CAYMAN ISLANDS


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>12
<FILENAME>g80228exv10w31.txt
<DESCRIPTION>DEBENTURE 4/15/02
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.31

                                   DEBENTURE

THIS DEBENTURE is made the           day of                        2002 BETWEEN:

(1)      OCEAN CONVERSION (BVI) LTD., a company incorporated under the laws of
         the British Virgin Islands, whose registered office is at the offices
         of McNamara Corporate Services Limited, 2nd Floor, 116 Main Street,
         P O Box 3342, Road Town, Torto1a, British Virgin Islands (the
         "BORROWER"); and

(2)      THE BANK OF N.T. BUTTERFIELD & SON LIMITED, a bank organised and
         existing under the laws of the island of Bermuda, whose registered
         office is at 65 Front Street, Hamilton, Bermuda (the "BANK").

NOW THIS DEBENTURE WITNESSES and IT IS AGREED as follows:

1        COVENANT TO PAY

1.1      The Borrower covenants to pay and discharge to the Bank on demand all
         moneys obligations and liabilities whether principal interest or
         otherwise which may now or at any time in the future be due owing or
         incurred by the Borrower to the Bank whether actual or contingent and
         whether alone severally or jointly as principal guarantor surety or
         otherwise and in whatever name or style and whether on any current or
         other account or in any other manner together with interest charges and
         other expenses so that interest shall be calculated and compounded as
         may be agreed from time to time between the parties or, if not agreed,
         in accordance with the usual practice of the Bank from time to time as
         well after as before any demand made or judgment obtained hereunder.

2        CHARGE

2.1      The Borrower as beneficial owner hereby charges with the payment or
         discharge of all moneys obligations and liabilities hereby covenanted
         to be paid or discharged by the Borrower including an initial facility
         in the sum of One Million Two Hundred and Fifty Thousand United States
         Dollars (US$1,250,000) together with all costs and expenses incurred by
         the Bank in relation to this Debenture or the moneys obligations and
         liabilities hereby secured:

         (a)      by way of first fixed charge:

                  (i)      all mechanical, electrical and other equipment and
                           all civil engineering works or plant including
                           appurtenances thereto now or in the future belonging
                           to the Borrower and used or to be used in the supply
                           construction operation and otherwise in connection
                           with any reverse osmosis desalination plant and all
                           parts chemicals and supplies which may from time to
                           time be used in connection with the plant;

                                        1

<PAGE>

                  (ii)     all other plant and machinery computers office and
                           other equipment now or in the future belonging to the
                           Borrower and the full benefit of any warranties or
                           maintenance contracts for any of the same;

                  (iii)    all cash at bank, book debts and other debts
                           including rents now or in the future due or owing to
                           the Borrower;

                  (iv)     all stocks shares bonds and other securities now or
                           in the future belonging to the Borrower together with
                           all dividends and other rights deriving therefrom;

                  (v)      the goodwill of the Borrower and its uncalled capital
                           for the time being;

                  (vi)     the benefit of any licences and all patent
                           applications inventions trade marks service marks
                           designs and trade names copyright knowhow and other
                           intellectual property rights and all fees, royalties
                           and other rights of every kind deriving therefrom now
                           or in the future belonging to the Borrower;

                  (vii)    all other fixed assets of the Borrower to include all
                           undertaking and all other property assets and rights
                           whatsoever and wheresoever present and future not
                           hereby effectively charged by way of first fixed
                           charge;

         (b)      by way of first floating charge the whole of the Borrower's
                  undertaking and all its property and assets whatsoever and
                  wheresoever present and future other than the property and
                  assets from time to time effectively charged to the Bank by
                  way of legal mortgage or fixed charge by this Debenture.

         Nothing herein shall be construed as creating a charge over any land or
         interest therein, unless the Bank shall have first obtained a requisite
         non-belonger land holding licence under the provisions of the
         Non-Belongers Land Holding Regulation Act (Cap. 122) to hold such
         charge.

2.2      The Bank may convert the floating charge at any time by notice in
         writing to the Borrower into a fixed charge as regards all the property
         and assets which for the time being are the subject of such floating
         charge or, as the case may be, such of the said property and assets as
         are specified by such notice. The floating charge created by this
         Debenture shall unless otherwise agreed in writing by the Bank
         automatically and without notice immediately be converted into a fixed
         charge in the event that the Borrower shall create or permit to subsist
         any mortgage charge pledge lien or other security interest other than
         this Debenture or if any person takes any step to levy any distress
         attachment execution or other legal process against any of the said
         property or assets.


2.3      The security from time to time constituted by or pursuant to this
         Debenture shall be in

                                        2

<PAGE>

         addition to and shall not prejudice determine or affect any other
         security which the Bank may from time to time hold for or in respect of
         all or any part of the moneys obligations and liabilities hereby
         secured. No prior security held by the Bank over the property charged
         by this Debenture or any part of it shall merge in the security created
         hereby or pursuant hereto which will remain in force and effect as a
         continuing security until discharged by the Bank.

3        RESTRICTIONS ON DEALING

3.1      The Borrower shall not without the prior written consent of the Bank:

         (a)      create or permit to subsist any mortgage debenture charge
                  pledge lien (other than a lien arising by operation of law in
                  the ordinary course of trading) or other encumbrance or
                  security interest on any of its assets other than this
                  Debenture;

         (b)      sell transfer lease lend or otherwise dispose of the whole or
                  any part of its undertaking or (save in the normal course of
                  trading at not less than market value) of its assets or enter
                  into any agreement or grant any option for any such sale
                  transfer lease loan or other disposal;

         (c)      part with possession of any freehold or leasehold property
                  grant or agree to grant any option or any licence tenancy or
                  other right of occupation to any person or exercise the powers
                  of leasing or agreeing to lease or of accepting or agreeing to
                  accept surrenders provided that such restrictions shall not be
                  construed as a limitation on the powers of any receiver
                  appointed under this Debenture and being an agent of the
                  Borrower;

         (d)      pull down or remove or redevelop or make any material
                  alteration to the whole or any part of any buildings or sever
                  unfix or remove any fixtures or remove any plant or machinery
                  belonging to or in use by the Borrower except for the purpose
                  of effecting repairs or replacing the same;

         (e)      redeem or purchase its own shares, or pay dividend and profit
                  shares unless there is a minimum cash flow of US$500,000 after
                  debit service is retained to support the operating costs of
                  the reverse osmosis plant of the Borrower, and

         (f)      amend or waive any of its rights under the agreement to
                  produce portable water from sea water between the Borrower and
                  the Government of the British Virgin Islands as amended by a
                  supplemental agreement dated 14 March 1991 and a further
                  supplemental agreement dated 24 January 1992 (hereinafter the
                  "CONTRACT").

4        REPRESENTATIONS WARRANTIES AND COVENANTS BY THE BORROWER

4.1      The Borrower represents and warrants to the Bank as at the date of this
         Debenture and so long as any sums secured by this Debenture remain
         outstanding and undertakes that:

                                        3

<PAGE>

         (a)      it is duly incorporated validly existing and in good standing
                  under the laws of the British Virgin Islands;

         (b)      it has and will at all times have the necessary power to enter
                  into and perform its obligations under this Debenture;

         (c)      this Debenture constitutes its legal valid binding and
                  enforceable obligations and is a first priority security over
                  the assets charged hereunder and every part thereof effective
                  in accordance with its terms;

         (d)      all necessary authorisations and consents to enable or entitle
                  it to enter into this Debenture have been obtained and will
                  remain in full force and effect during the subsistence of the
                  security constituted by this Debenture;

         (e)      the entry into and performance by it of, and the
                  transactions contemplated by, this Debenture do not and will
                  not:

                  (a)      conflict with any law or regulation or judicial or
                           official order;

                  (b)      conflict with the constitutional documents of the
                           Borrower; or

                  (c)      conflict with any document which is binding upon the
                           Borrower or any of its assets;

         (f)      all approval from any government, tax monetary or other
                  authorities have been obtained and are in full force and
                  effect;

         (g)      the execution of this Debenture and the borrowings and
                  repayment of the loan will not contravene any agreement to
                  which the Borrower is a party;

         (h)      it is not in default under any agreement to which it is a
                  party nor is it the subject of any actual, pending or
                  threatened legal proceedings either of which has or may have a
                  material adverse effect on the Borrower's financial condition;

         (i)      the financial statements and all other financial and other
                  information delivered to the Bank are true and accurate, do
                  not omit any material facts or other information which might
                  make them misleading and no material change has occurred since
                  the date of those valuations or the dates when such other
                  financial and other information was delivered to the Bank;

         (j)      the Startup Date (as defined in the Contract) of the Contract
                  is 31 May 1992 and the termination date is 31 May 2006,
                  there have been no amendments to the Contract since the
                  Supplemental Agreement # 2 dated 24 January 1992, and there
                  have been no defaults under the Contract;

                                        4

<PAGE>

         (k)      other than this Debenture, it has not assigned or agreed to
                  assign, charge or in any way encumber any of its present or
                  future rights, title and interest in and to the Contract or
                  any of its other assets (other than a lien arising by
                  operation of law in the ordinary course of trading);

         (l)      no right of action is vested in any party under the Contract
                  in respect of any representation, breach of condition, breach
                  of warranty or breach of any other express or implied term by
                  the Borrower thereunder; and

         (m)      it has no knowledge of any fact that would or might prejudice
                  or affect any right, power or ability of the Bank to enforce
                  this Debenture or condition thereof.

4.2      The Borrower shall:

         (a)      conduct and carry on its business in a proper and efficient
                  manner and not make any substantial alteration in the nature
                  of or mode of conduct of that business and keep or cause to be
                  kept proper books of account and records relating to such
                  business;

         (b)      perform its obligations in a prompt and efficient manner and
                  maintain and enforce its rights under the Contract and not do
                  or omit to do anything in relation thereto which may
                  reasonably be expected adversely and materially to affect the
                  ability of the Borrower to perform its obligations under the
                  Contract this Debenture or any agreement with the Bank;

         (c)      keep all buildings and all plant machinery fixtures and
                  fittings in good repair and condition and permit any person or
                  persons nominated by the Bank free access at all times to view
                  the state and condition thereof;

         (d)      insure and keep insured such of its property as is insurable
                  with such insurer and against such risks and in such amounts
                  and otherwise in such terms as the Bank may require and will
                  maintain such other insurances as are normally maintained by
                  prudent companies carrying on similar businesses with the
                  interest of the Bank noted upon all policies of such insurance
                  or, if the Bank shall require, in the joint names of the
                  Borrower and the Bank and will produce or deposit with the
                  Bank all such policies and receipts for all premium and other
                  payments necessary for effecting and maintaining such
                  insurances;

         (e)      apply any insurance proceeds in making good the loss or damage
                  or at the Bank's option in or towards the discharge of the
                  moneys obligations and liabilities secured by this Debenture;

         (f)      punctually pay all rents taxes duties assessments and other
                  outgoings and observe and perform all restrictive and other
                  covenants under which any of the property subject to this
                  Debenture is held;

                                        5

<PAGE>

         (g)      pay into its account with the Bank all moneys which it may
                  receive in respect of its book or other debts and all licence
                  fees, royalties and other moneys deriving from its
                  intellectual property and until such payment hold all such
                  moneys on trust for the Bank;

         (h)      deal with its book or other debts and all licence fees,
                  royalties and other moneys deriving from its intellectual
                  property in accordance with any directions from time to time
                  given in writing by the Bank and in default of and subject to
                  any such directions not release factor sell at discount charge
                  assign or otherwise deal with such debts, licence fees,
                  royalties or other moneys otherwise than by getting in and
                  paying the same into such account;

         (i)      deposit with the Bank all deeds certificates and documents
                  constituting or evidencing title to the property or any part
                  thereof charged by this Debenture and all insurance policies;

         (j)      comply with the provisions of all present or future statutes
                  and directives and every notice order or directions made under
                  any of the foregoing;

         (k)      not do or cause or permit to be done anything which may in any
                  way depreciate, jeopardise or otherwise prejudice the value to
                  the Bank of the security hereby charged;

         (l)      provide the Bank with all financial and other information with
                  respect to the assets, liabilities and affairs of the Borrower
                  and its subsidiaries and associated companies (if any) that
                  the Bank may form time to time require.

         (m)      if required by the Bank, procure that each subsidiary of the
                  Borrower shall guarantee to the Bank payment of all moneys,
                  obligations and liabilities hereby covenanted to be paid and
                  charge all its undertaking, property and assets to secure the
                  same in such manner as the Bank shall from time to time
                  require;

         (n)      if required by the Bank, will cause each of its subsidiaries
                  to, permit the Bank or any agent or representative of the
                  Bank, examine and make copies of and abstracts from the
                  records and books of account of the Borrower and visit the
                  premises and properties of the Borrower and to discuss the
                  affairs, finances and accounts of the Borrower and its
                  subsidiaries with any of the officers or knowledgeable
                  employees of the Borrower or such subsidiaries.

4.3      The Borrower hereby further covenants with the Bank that during the
         continuance of the security constituted by this Debenture the Borrower
         will:

         (a)      furnish to the Bank copies of the profit and loss account,
                  balance sheet and directors' report in respect of each
                  financial year of the Borrower, its holding companies and such
                  of the subsidiaries of the Borrower or its holding companies
                  as the Bank may from time to time require showing a true and
                  fair view of their

                                        6

<PAGE>

                  respective affairs, profit or loss and source and application
                  of funds certified by duly qualified auditors approved by the
                  Bank forthwith upon the same becoming available and not in any
                  event later than the expiration of ninety (90) days from the
                  end of such financial year and also at the time of issue
                  copies of all, annual reports and other information of a
                  financial or business nature circulated to shareholders or to
                  any class of creditors and from time to time such other
                  information, statements, forecasts and projections of the
                  Borrower, its holding companies and the subsidiaries of the
                  Borrower as the Bank may require;

         (b)      at the request of the Bank furnish copies of annual financial
                  statements of its shareholders, and promptly inform the Bank
                  of its financial position generally which would be material to
                  be known to a director or a lender;

         (c)      furnish the Bank with copies of all notices given to or
                  received from any person in relation to the Contract promptly
                  after the same are given or as the case may be received;

         (d)      notify the Bank immediately of any default or event likely to
                  cause a default of the Borrower or the Government of the
                  British Virgin Islands under the terms of the Contract, and of
                  any action taken by any party or any act or event which could
                  terminate or invalidate the Contract;

         (e)      maintain in full force and effect all government tax monetary
                  and other approval consents and licences required to enable
                  the Borrower to maintain its corporate status to continue to
                  carry on its business and affairs.

4.4      If the Borrower shall fail to satisfy the Bank that it has performed
         any of its obligations under clauses 4.2 and 4.3, then the Bank may
         take such steps as it considers appropriate procure the performance of
         such obligation and shall not thereby be deemed to be a mortgagee in
         possession and the moneys expended by the Bank shall be reimbursed by
         the Borrower on demand and until so reimbursed shall carry interest as
         mentioned in clause 1 from the date of payment to the date of
         reimbursement.

5        ENFORCEMENT

5.1      This Debenture shall become enforceable:

         (a)      upon demand by the Bank;

         (b)      if any of the moneys obligations and liabilities secured by
                  this Debenture shall not be paid or discharged by the Borrower
                  in accordance with clause 1 immediately upon it coming due; or

         (c)      if the Borrower shall be in breach of any provision of this
                  Debenture or of any agreement containing any terms and
                  conditions of or applicable to the moneys obligations and
                  liabilities secured by this Debenture; or

                                        7

<PAGE>

         (d)      upon the presentation of a petition for the winding up of the
                  Borrower or an order made or the passing by the Borrower of a
                  resolution for voluntary winding up; or

         (e)      if an encumbrancer shall take possession of or a receiver
                  shall be appointed over or any secured creditor of the
                  Borrower shall seek to enforce his security in respect of all
                  or any of the property or assets charged by this Debenture; or

         (f)      if the Borrower shall enter into any composition or
                  arrangement for the benefit of its creditors; or

         (g)      if any information, representation, warranty or undertaking
                  from time to time provided or made to the Bank by the Borrower
                  is or becomes incorrect or misleading in a material respect;
                  or

         (h)      if the Borrower defaults under the Contract, or any trust
                  deed, loan agreement, debenture or other agreement or
                  obligation relating to borrowing (which expression includes
                  all liabilities in respect of accepting, endorsing or
                  discounting any notes or bills, all unpaid rental and other
                  liabilities, present and future, under hire-purchase, credit
                  sale, conditional sale, leasing and similar agreements the
                  purchase price or charge for all acquisitions or services
                  payment of which is deferred for three months or more and all
                  liabilities under debt purchase, factoring and like agreements
                  contingent on non-payment of any debt) or under any guarantee
                  (which expression includes all contingent liabilities
                  undertaken in respect of the obligations or liabilities of any
                  third party including all guarantees, indemnities or bonds
                  whether constituting primary or secondary obligations or
                  liabilities) or if any borrowing or other money payable under
                  any of the foregoing becomes or is capable of being declared
                  payable prior to its stated maturity or is paid when due or if
                  any debenture, mortgage, charge or other security from time to
                  time created by the Borrower becomes enforceable; or

         (i)      if any judgment or order made against the Borrower is not
                  complied with within seven days from the date of entry thereof
                  or if an execution, distress, sequestration or other process
                  is levied or enforced upon or sued out against any part of the
                  undertaking, property, assets or revenues of the Borrower; or

         (j)      if the Borrower stops payment or agrees to declare a
                  moratorium or becomes or is deemed to be insolvent or unable
                  to pay its debts within the meaning of the Companies Act
                  (British Virgin Islands) or when they fall due or if a notice
                  is issued convening a meeting of or the Borrower proposes to
                  enter into any composition or arrangement with its creditors
                  or any class of its creditors; or

         (k)      if any material part of the assets or revenues of the Borrower
                  is sold or disposed of or threatened to be sold or disposed of
                  (otherwise than in the normal course of trading) whether in a
                  single transaction or a number of transactions or is
                  nationalised, compulsorily acquired, seized or appropriated or
                  if any partnership

                                        8

<PAGE>

                  of which the Borrower is or becomes a partner is dissolved; or

         (l)      if any part of the security hereby created or any guarantee,
                  indemnity or other security for any money obligation or
                  liability hereby secured fails or ceases in any respect to
                  have full force and effect or to be continuing or is
                  terminated or disputed or becomes in jeopardy, invalid or
                  unenforceable; or

         (m)      if any licence, authorisation, consent or registration at any
                  time necessary or desirable to enable the Borrower to comply
                  with its obligations to the Bank or to carry on its business
                  in the normal course shall be revoked, withheld or materially
                  modified or shall fail to be granted or perfected or shall
                  cease to remain in full force and effect; or

         (n)      if control of the Borrower is acquired by any person or group
                  of connected persons not having control of the Borrower at the
                  date hereof (unless with the prior consent in writing of the
                  Bank); or

         (o)      if it becomes illegal under any law applying to the Bank for
                  it to make or maintain any credit facility secured by this
                  Debenture; or

         (p)      if:

                  (i)      any of the foregoing events occurs without the prior
                           consent in writing of the Bank in relation to: (A)
                           any third party which now or hereafter has guaranteed
                           or provided security for or given an indemnity in
                           respect of any obligation and liabilities hereby
                           secured; or (B) any subsidiary or holding company of
                           the Borrower of any such third party or any
                           subsidiary of any such holding company; or

                  (ii)     any individual now or hereafter liable as such third
                           party shall commit an act of bankruptcy, die or
                           become of unsound mind;

         (q)      the Borrower shall have failed to repay, forthwith, any
                  obligation or liability which has become illegal for the Bank
                  to continue to hold, fund or maintain due to a change in, or
                  in the interpretation of, any law or regulation or compliance
                  with any guidelines or request from any governmental authority
                  (whether or not having the force of law); or

         (r)      if the Borrower shall cease or threaten to cease to carry on
                  its business, or any other event shall take place which in the
                  opinion of the Bank puts in jeopardy all or any part of the
                  security created by this Debenture.

5.2      The Borrower hereby covenants to immediately notify the Bank in writing
         of the occurrence of any enforceable event specified in clause 5.1 or
         of the occurrence of any event or circumstance which with the lapse of
         time will or may constitute an enforceable event.

                                        9

<PAGE>

6.       RECEIVER

6.1      At any time after this Debenture has become enforceable or if the
         Borrower so requests in writing the Bank may without further notice to
         the Borrower appoint by writing under hand or under seal any one or
         more persons (whether an officer of the Bank or not) either singly
         jointly severally or jointly and severally to be a receiver, receiver
         and manager or administrative receiver (each a "Receiver") of all or
         any part of the property charged by this Debenture and either at the
         time or appointment or any time thereafter may fix his or their
         remuneration and except as otherwise required by statute may remove
         any such Receiver and appoint another or others in his or their place.

6.2      Any Receiver shall be the agent of the Borrower which shall be solely
         responsible for his acts and defaults and the payment of his
         remuneration,

6.3      Any Receiver shall:

         (a)      take possession of collect and get in all or any part of the
                  property in respect of which he is appointed and for that
                  purpose to take any proceedings in the name of the Borrower or
                  otherwise as may seem expedient;

         (b)      carry on or concur in carrying on the business of the Borrower
                  and to raise money from the Bank or others on the security of
                  any property charged by this Debenture;

         (c)      purchase or acquire any land and purchase, acquire and grant
                  any interest in or right over land;

         (d)      sell or concur in selling let or concur in letting and
                  terminate or accept surrenders of leases or tenancies or any
                  of the property charged by this Debenture and to carry any
                  such transactions into effect;

         (e)      sell, assign let or otherwise dispose of or concur in selling,
                  assigning, letting or otherwise disposing of all or any of the
                  debts and any other property in respect of which he is
                  appointed;

         (f)      make any arrangement or compromise between the Borrower and
                  any other person which he may think expedient;

         (g)      make and effect all repairs improvement and insurances;

         (h)      purchase materials tools equipment goods or supplies;

         (i)      call up any uncalled capital of the Borrower with all the
                  powers conferred by the Memorandum and Articles of Association
                  of the Borrower in relation to calls;

                                       10

<PAGE>

         (j)      employ engage and appoint managers and other employees and
                  professional advisers;

         (k)      do all such other acts and things as may be considered to be
                  incidental or conducive to any other matters or powers
                  aforesaid or to the realisation of the security constituted by
                  this Debenture and which he lawfully may or can do.

7        APPLICATION OF PROCEEDS

7.1      Any moneys received by the Bank or any Receiver shall subject to the
         repayment of any claims having priority to the charges created by this
         Debenture be applied in the following order but without prejudice to
         the right of the Bank to recover any shortfall from the Borrower:

         (a)      in the payment of all costs charges and expenses of and
                  incidental to the appointment of the Receiver and the exercise
                  of all or any of his powers and of all outgoings paid by him;

         (b)      in the payment of the Receiver's remuneration;

         (c)      in or towards the satisfaction of the moneys obligations and
                  liabilities secured by Debenture in such order as the Bank in
                  its absolute discretion thinks fit;

         (d)      in payment of the surplus (if any) to the person or persons
                  entitled to it.

7.2      All moneys received recovered or realised by the Bank under this
         Debenture may be credited at the discretion of the Bank to any suspense
         or impersonal account and may be held in such account for so long as
         the Bank shall think fit pending its application from to time in or
         towards the discharge of any of the moneys obligations and liabilities
         secured by this Debenture.

8        PROTECTION OF THIRD PARTIES

8.1      No person dealing with a Receiver or the Bank shall be concerned to
         enquire whether any power which he or it is purporting to exercise has
         become exercisable or whether any money is due under this Debenture or
         as to the application of any money paid raised or borrowed or as to the
         propriety or regularity of any sale by or other dealing with such
         Receiver or the Bank. All the protection to purchasers contained in any
         statute shall apply to any person purchasing from or dealing with a
         Receiver or the Bank.

9        ENTRY INTO POSSESSION

9.1      If the Bank or any Receiver shall enter into possession of the property
         hereby charged or any part thereof it or he may from time to time and
         at any time go out of such possession. Neither the Bank nor any
         Receiver shall in any circumstances (either by reason of any entry into
         or taking of possession of any such property or for any other reason
         and

                                       11

<PAGE>

         whether as mortgagee in possession or on any other basis) be liable to
         account to the Borrower for anything except its or his actual receipts
         or be liable to the Borrower for any loss or damage arising from any
         realisation of the property hereby charged or from any act default or
         omission in relation thereto.

10       POWER OF ATTORNEY

10.1     the Borrower irrevocably appoints the Bank any Receiver and any person
         nominated by the Bank jointly and also severally to be the attorney of
         the Borrower with the power of substitution and in its name and
         otherwise on its behalf and as its act and deed to sign or execute all
         deeds instruments and documents which the Bank or any Receiver may
         require or deem proper for any of the purposes of or which the Borrower
         ought to do under this Debenture. The Borrower agrees to ratify and
         confirm anything such attorney shall lawfully and properly do.

11       CURRENCY INDEMNITY

11.1     For the purpose of or pending the discharge of any of the moneys
         obligations and liabilities secured by this Debenture the Bank may
         convert any moneys received recovered or realised by the Bank under
         this Debenture (including the proceeds of any previous conversion) from
         their existing currency into such other currency as the Bank may think
         fit and any such conversion shall be effected at the Bank's then
         prevailing spot selling rate of exchange for such other currency
         against the existing currency. As a separate and independent obligation
         the Borrower agrees to indemnify and hold harmless the Bank against any
         shortfall between any amount received or recovered by it in respect of
         any payment due under this Debenture and converted in accordance with
         the clause into the currency in which such amount was payable and the
         amount in such currency which was due and payable to the Bank under
         this Debenture.

12       NEW ACCOUNTS

12.1     If the Bank shall at any time receive actual or constructive notice of
         any charge or other interest affecting any part of the property hereby
         charged then the Bank may open a new account or accounts for the
         Borrower and if the Bank does not do so then the Bank shall be treated
         as if it had in fact done so at the time when it received or was deemed
         to receive notice and as from that time all payments made by the
         Borrower to the Bank shall be credited or treated as having been
         credited to the new account and shall not operate to reduce the amount
         secured by this Debenture at the time when the Bank received or was
         deemed to received such notice.

13       PRIOR CHARGES

13.1     If there is any encumbrance over any of the property charged by this
         Debenture which ranks in priority to this Debenture and any
         proceedings or steps are taken to exercise or enforce any powers or
         remedies conferred by such prior encumbrance the Bank or any Receiver
         appointed under this Debenture in respect or such property may (but
         without

                                       12

<PAGE>

         prejudice to any rights the Receiver) redeem such prior encumbrance or
         procure its transfer to itself and may settle and pass the accounts of
         any prior mortgagee, chargee or encumbrancer. Any account so settled
         and passed shall be conclusive and binding on the Borrower and all the
         principal interest costs charges and expenses of and incidental to such
         redemption or transfer shall be secured on the property charged by this
         Debenture and all the powers conferred by any prior encumbrance upon
         the encumbrancer or any receiver thereunder shall be exercisable by the
         Bank or a Receiver in like manner as if the same were expressly
         included in this Debenture.

14       FURTHER ASSURANCE

14.1     The Borrower shall at its own cost whenever requested by the Bank
         immediately execute and sign all such deeds and documents and do all
         such things as the Bank may require for the purpose of perfecting or
         more effectively providing security to the Bank for the payment and
         discharge of the moneys obligations and liabilities secured by this
         Debenture or to facilitate the realisation of the property and assets
         mortgaged and charged by this Debenture or the exercise of any rights
         vested in the Bank or any Receiver.

15       SET-OFF

15.1     The Bank may at any time and without notice to the Borrower combine or
         consolidate all or any of the Borrower's then existing accounts with
         and liabilities to the Bank and set off or transfer any sum or sums
         standing to the credit of any one or more of such accounts in or
         towards satisfaction of any of the liabilities of the Borrower to the
         Bank on any other account or in any other respects. The Bank shall
         notify the Borrower that such a transfer has been made.

16       COSTS AND INDEMNITY

16.1     All reasonable costs, expenses and disbursements incurred by the Bank
         in relation to this Debenture or the moneys obligations and liabilities
         hereby secured including for the avoidance of doubt all amounts the
         Bank may incur in the negotiation, preparation and completion, and in
         the maintenance, protection and enforcement of any of its rights, and
         may from time to time require to compensate it for its internal
         management and administrative costs and expenses, stamp duty and legal
         fees (attorney-and-own-client basis), and any amount which the Bank may
         certify to be necessary to compensate the Bank for any increased costs
         or reduction in return resulting from compliance with any change in, or
         in the interpretation of any law or regulation of any official
         directive or request (whether or not having the force of law), shall be
         reimbursed by the Borrower to the Bank on demand on a full indemnity
         basis and until so reimbursed shall carry interest in accordance with
         the provisions set out in clause 1 from the date of payment to the date
         of reimbursement and be secured on the property charged by this
         Debenture. A certificate signed by the Bank as to the amount of such
         costs and expenses shall be conclusive and binding upon the Borrower.

                                       13

<PAGE>

16.2     The Bank and every Receiver attorney or other person appointed by the
         Bank under this Debenture and their respective employees shall be
         entitled to be indemnified on a full indemnity basis out of the
         property charged by this Debenture in respect of all liabilities and
         expenses incurred by any of them in or directly or indirectly as a
         result of the exercise or purported exercise of any of the powers
         authorities or discretions vested in them under this Debenture and
         against all actions proceedings losses costs claims and demands in
         respect of any matter or thing done or omitted in any way relating to
         the property charged by this Debenture and the Bank and any such
         Receiver may retain and pay all sums in respect of the same out of the
         moneys received under the powers conferred by this Debenture.

17       MISCELLANEOUS

17.1     The Bank may without discharging or in any way affecting the security
         created by this Debenture or any remedy of the Bank grant time or other
         indulgence or abstain from exercising or enforcing any remedies
         securities guarantees or other rights which it may now or in the future
         have from or against the Borrower and may make any arrangement
         variation or release with any person or persons without prejudice
         either to this Debenture or the liability of the Borrower for the
         moneys obligations and liabilities secured by this Debenture.

17.2     The Borrower shall not assign or transfer any rights or obligation
         under this Debenture. The Bank shall have a full and unfettered right,
         on giving written notice to the Borrower, to assign the whole or any
         part of the benefit and/or obligations of this Debenture and the
         expression "the Bank" shall include its successors and assigns and the
         Bank shall be entitled to disclose any information to any actual or
         prospective assignee successor or participant.

17.3     The provisions of this Debenture shall be severable and if at any time
         any one or more such provisions is or becomes invalid illegal or
         unenforceable the validity legality and enforceability of the remaining
         provisions shall not in any way be impaired.

17.4     The rights and remedies of the Bank provided by this Debenture are
         cumulative and are not exclusive of any rights powers or remedies
         provided by law and may be exercised from time to time and as often as
         the Bank may deem expedient.

17.5     Any reference in this Debenture to any statute or any section of any
         statute shall be deemed to include reference to any statutory
         modification or re-enactment thereof for the time being in force.

18       NOTICES

18.1     Any demand or notice under this Debenture shall be in writing and may
         be served personally on any director or the secretary of the Borrower
         or may be sent by post telex or facsimile or may be delivered to the
         registered office of the Borrower or its last known place of business.
         If such demand or notice is sent by post it shall be deemed to have

                                       14

<PAGE>

         been received seven days after it was posted and shall be effective
         notwithstanding that it was not in fact delivered or was returned
         undelivered. If sent by telex or facsimile it shall be deemed to have
         been received (whether or not actually received) at the time of
         dispatch.

19       GOVERNING LAW AND JURISDICTION

19.1     This Debenture shall be governed by and construed in accordance with
         the laws of the British Virgin Islands and the Borrower irrevocably
         submits to the non-exclusive jurisdiction of the courts of the British
         Virgin Islands and the courts of Bermuda.

IN WITNESS WHEREOF this Debenture has been executed as a deed the day and year
first above written.

THE COMMON SEAL of Ocean                  )    /s/ [ILLEGIBLE]
Conversion (BVI) Ltd was hereunto affixed )    ---------------------------
and attested to by Glenn Harrigan and                Director
Romney Penn, directors                    )    /s/ [ILLEGIBLE]
in the presence of:                       )    ---------------------------
                                          )    Director
/s/ [ILLEGIBLE]
- -------------------------
Witness

THE COMMON SEAL of The Bank of            )    /s/ [ILLEGIBLE]
N.T. Butterfield and Son Limited was      )    ---------------------------
hereunto affixed and attested to by       )    Authorised Signatory

______________________________
in the presence of:

/s/ [ILLEGIBLE]
- --------------------------------
Witness

                                                                          [SEAL]

                                       15

<PAGE>

                                    AFFIDAVIT

         I Carlene Herbert of McNamara, Tortola, British Virgin Islands, make
OATH and SAY as follows:-

1.       I was present at Road Town, Tortola, British Virgin Islands on the 15th
day of July, 2002 and did then and there see Glenn Harrigan and Romney Penn as
Directors of OCEAN CONVERSION (BVI) LTD duly sign the foregoing Debenture and
affix the Company's Seal thereto.

2.       The signatures "Glenn Harrigan" and "Romney Penn" duly set and
subscribed to the said Debenture at the foot or end thereof opposite the Seal of
the party of the One Part executing the same are of the proper handwritings of
Glenn Harrigan and Romney Penn aforesaid and the signature "Carlene Herbert"
thereto also set and subscribed as that of the witness attesting the due
execution thereof by Glenn Harrigan and Romney Penn on behalf of OCEAN
CONVERSION (BVI) LTD aforesaid is of the proper handwriting of me this
deponent.

SWORN at Road Town, Tortola     )

British Virgin Islands          )       /s/ [ILLEGIBLE]
                                        -----------------------------
this 15th day of July, 2002     )

                                )

         BEFORE ME:

/s/ [ILLEGIBLE]
- -----------------------------
NOTARY PUBLIC

[SEAL]       [SEAL]

                                       16

<PAGE>

                                    AFFIDAVIT

         I BETH TAYLOR VESEY of 2 Cherry Dale, Smith's, Bermuda, make
OATH and SAY as follows:-

1.       I was present at the offices of the Bank of N.T. Butterfield & Son Ltd.
on the 22nd day of august, 2002 and did then and there see Michael A. McWatt &
Philip C. Jones an authorised signatory of THE BANK OF N.T. BUTTERFIELD & SON
LIMITED duly sign the foregoing Debenture and affix the Company's Seal thereto.

2.       The signature "[ILLEGIBLE]" duly set and subscribed to the said
Debenture at the foot or end thereof opposite the Seal of the party of the One
Part executing the same is of the proper handwriting of Michael McWatt & Philip
Jones aforesaid and the signature "[ILLEGIBLE]" thereto also set and subscribed
as that of the witness attesting the due execution thereof by [ILLEGIBLE]
Michael McWatt, Philip C. Jones on behalf of THE BANK OF N.T. BUTTERFIELD & SON
LIMITED aforesaid is of the proper handwriting of me this deponent.

SWORN at City of Hamilton,    )

Island of Bermuda             )

                                      /s/ [ILLEGIBLE]
this 22nd day of August, 2002 )       -----------------------------

                              )

         BEFORE ME:

/s/ [ILLEGIBLE]
- --------------------------
NOTARY PUBLIC

Seal

         JOHN BARRITT
         NOTARY PUBLIC
         "CEDAR HOUSE"
        41 CEDAR AVENUE
        HAMILTON, BERMUDA                                                 [SEAL]

                                       17


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>13
<FILENAME>g80228exv10w32.txt
<DESCRIPTION>DEED OF INDEMNITY
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.32

                             DATED: February 7, 2003

                           CONSOLIDATED WATER CO. LTD.

                                      -and-

                  NORTH-AMERICAN MORTGAGE & FINANCE CORPORATION

                 ---------------------------------------------

                                DEED OF INDEMNITY
                             relating to a guarantee
                                   provided by
                  NORTH-AMERICAN MORTGAGE & FINANCE CORPORATION
                        in respect of the obligations of
                           Ocean Conversion (BVI) Ltd.

                 ---------------------------------------------

                                    CAMPBELLS
                        4th Floor, Scotiabank Building
                                 P.O. Box 884GT
                                  Grand Cayman
                                 Cayman Islands

<PAGE>

THIS DEED is made this 7th day of February, 2003 by

1.       CONSOLIDATED WATER CO. LTD., formerly Cayman Water Company Limited, of
         Trafalgar Place, West Bay Road, P.O. Box 1114 GT, Grand Cayman
         (hereinafter "the Covenantor "); in favour of

2.       NORTH-AMERICAN MORTGAGE & FINANCE CORPORATION, a company duly
         incorporated in the Cayman Islands, the registered office of which is
         at Elizabethan Square, George Town, Grand Cayman, Cayman Islands
         (hereinafter "NAMF").

WHEREAS:

A. NAMF has provided a guarantee limited to US$343,750.00 in respect of the
   obligations of Ocean Conversion (BVI) Ltd. in favour of The Bank of N.T.
   Butterfield & Son Limited dated 14th May 2002 ("the Guarantee").

B. The Covenantor has entered into a share sale agreement ("the Agreement") with
   NAMF and Transcontinental Finance Corporation Limited (together "the
   Vendors") for the purchase of the shares in the capital of Ocean Conversion
   (Cayman) Limited and Ocean Conversion (BVI) Ltd. owned by the Vendors,
   details of which are set out in Schedule 1 hereto ("the Shares"). Pursuant
   to the Agreement, the Covenantor has agreed to fully and effectively
   indemnify NAMF and keep NAMF indemnified against any and all liability, cost
   or expense of NAMF under or in respect of the Guarantee and, furthermore, has
   undertaken to secure as soon as possible after completion of the sale and
   purchase of the Shares the full and final release of NAMF from the Guarantee
   and the Covenantor has agreed to offer its own guarantee upon the same terms
   as the Guarantee in substitution therefor if necessary to secure such
   release.

C. The Covenantor has agreed to execute this Deed to give NAMF the full benefit
   of such indemnity and undertaking.

NOW THIS DEED WITNESSETH as follows:

1.       The Covenantor hereby agrees to fully and effectively indemnify NAMF
         and keep NAMF indemnified against any and all liability, cot or expense
         of NAMF under or in respect of the Guarantee and hereby agrees to pay
         and reimburse such sums as mentioned above to NAMF on demand.

2.       The Covenantor hereby undertakes to secure as soon as possible the full
         and final release of NAMF from the Guarantee and agrees that, if
         necessary to secure such release, the Covenantor shall offer its own
         guarantee upon the same terms as the Guarantee in substitution
         therefor.

3.       This Deed shall be binding on the Covenantor and its successors and
         assigns.

4.       The provisions of the Agreement relating to communications shall apply
         to any

                                      -1-

<PAGE>

         communication to be given under, or in connection with, this Deed.

5.       This Deed hall be governed in all respects by Cayman Islands law and
         the parties hereto hereby submit to the non-exclusive jurisdiction of
         the Cayman Islands courts.

IN WITNESS WHEREOF this Deed has been executed by the Covenantor and delivered
on the date first above written.

                                      -2-

<PAGE>

                                   SCHEDULE 1

                                   THE SHARES

1,695,000 ordinary shares in the capital of Ocean Conversion (Cayman) Limited
(formerly Reliable Water Cayman Ltd.) registered in the name of Transcontinental
Finance Corporation Limited.

555,000 Class A shares in the capital of Ocean Conversion (BVI) Ltd. (formerly
Reliable Water (BVI) Ltd.) registered in the name of North-American Mortgage &
Finance Corporation.

                                      -3-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>14
<FILENAME>g80228exv10w33.txt
<DESCRIPTION>GUARANTEE AND INDEMNITY
<TEXT>
<PAGE>

                                                                  EXHIBIT 10.33

[THE BANK OF N.T. BUTTERFIELD & SON LTD. LOGO]
The Bank of N.T. Butterfield & Son Ltd.
CREDIT DEPARTMENT                                        GUARANTEE AND INDEMNITY

Name of Debtor Ocean Conversion (BVI) Limited

Date 28 May 2002

Name of Guarantor North American Mortgage & Finance

To

   THE BANK OF N.T. BUTTERFIELD & SON LIMITED

<PAGE>

GUARANTEE AND INDEMNITY ("GUARANTEE")
by one or more persons or by a company
To THE BANK OF N. T. BUTTERFIELD & SON LIMITED (the Bank).
In consideration of the Bank giving or continuing to give credit, banking
facilities or other accommodation for so long as it may think fit to

Ocean Conversion (BVI) Limited                                     (the DEBTOR),

NOW

North American Mortgage & Finance                                (the GUARANTOR)

hereby unconditionally guarantees on demand to pay to the Bank all moneys
advanced to or paid to for or on account of the Debtor and interest and charges
thereon remaining unpaid and to discharge all obligations and liabilities
whether actual or contingent now or hereafter incurred to the Bank by the Debtor
whether on account of moneys advanced, bills of exchange, promissory notes,
guarantees, indemnities, interest, commission, banking charges or any instrument
or agreement whatsoever from time to time entered into by the Bank with or at
the request of the Debtor (whether incurred solely, severally or jointly and in
whatever style, name or form and whether as principal or surety) together with
interest (as well after as before any demand or judgment) to date of payment at
such rates and upon such terms as may from time to time be payable by the Debtor
(or which would have been so payable but for the death, liquidation, bankruptcy
or other incapacity of the Debtor or the unenforceability of any term or
condition of any agreement or instrument) and all commission fees and other
charges and all legal costs (including time and costs of in-house counsel) on a
full-indemnity basis and all other costs and expenses incurred by the Bank in
relation to the Debtor or this Guarantee or any other guarantee indemnity or
security for any moneys obligations or liabilities hereby guaranteed on a full
indemnity basis (all of the foregoing hereinafter termed the Secured
Obligations) and to make such payment without any set-off, deduction or
withholding save as may be expressly required of the Guarantor by law (in which
event the Guarantor on demand shall additionally pay to the Bank, by way of
agreed compensation, the full amount so withheld) Provided that the total amount
recoverable under this Guarantee shall not exceed

$343,750 (Three hundred forty three thousand seven hundred fifty -- dollars)
together with interest and commission thereon and all costs, charges and
expenses referred to above, and in addition thereto, interest and charges
thereon (as well after as before judgment) from the date of demand by the Bank
on the Guarantor at the rate payable by the Debtor (or which would have been
payable but for the liquidation, bankruptcy or other incapacity of the Debtor or
the unenforceability of any term or condition of any agreement or instrument).

THE GUARANTOR agrees and confirms as follows:

1.       The Bank may without any consent from the Guarantor and without
         affecting the Guarantor's liability hereunder renew, vary or determine
         any credit or other facilities or accommodation given to the Debtor,
         hold over, renew, release or modify any term or condition of any
         security or guarantee now or hereafter held from the Debtor or any
         other person in respect of the Secured Obligations and grant time or
         indulgence to or compound with the Debtor or any other person and this
         Guarantee shall not be discharged nor shall the Guarantor's liability
         under it be affected by anything which would not have discharged or
         affected the Guarantor's liability if the Guarantor had been a
         principal debtor to the Bank instead of a Guarantor.

2.       This Guarantee shall be additional to any other guarantee or security
         now or hereafter held from the Guarantor in respect of the Secured
         Obligations, and the Bank shall not be required to exhaust its recourse
         against the Debtor or any security it may hold before being entitled to
         payment hereunder.

3.       This Guarantee shall be a continuing security and shall remain in force
         notwithstanding any disability or the death of the Guarantor, or the
         Bank's rights against the Debtor being barred by the Limitation Act
         1984 or otherwise, until determined by three calendar months' notice in
         writing from the Guarantor or the Personal Representatives of the
         Guarantor but such determination shall not affect the liability of the
         Guarantor for the amount recoverable at the date of the expiration of
         the notice. This Guarantee shall in any event remain property of the
         Bank.

4.       The Guarantor warrants that he has not taken and will not take without
         the written consent of the Bank the benefit of any security from the
         Debtor extending to the Secured Obligations or in connection with this
         Guarantee and, notwithstanding the foregoing, any security so taken and
         all moneys at any time received in respect thereof are hereby declared
         by the Guarantor to be held in trust for the Bank and as continuing
         security for the liability of the Guarantor to the Bank hereunder.

5.       In respect of the Guarantor's liability hereunder the Bank shall have a
         lien on all securities or other property of the Guarantor held by the
         Bank whether for safe custody or otherwise. The Bank shall further be
         entitled (as well before as after demand hereunder) to set off against
         any credit balance in any account of the Guarantor with the Bank
         (whether current or otherwise, whether alone or jointly with others,
         and in whatever currency, and subject to notice or not) the liability
         of the Guarantor to the Bank hereunder. Any conversion of any currency
         to any other currency will be made at the Bank's then prevailing rate
         of exchange as conclusively determined by the Bank.

<PAGE>

6.       This Guarantee shall apply to the ultimate balance owing by the Debtor
         to the Bank (as previously described) and until such balance has been
         paid in full the Guarantor shall not be entitled to share in any
         security held or money received by the Bank on account of that balance
         or to stand in the place of the Bank in respect of any security or
         money nor until such balance has been paid in full shall the Guarantor
         take any step to enforce, negotiate, assign, charge or otherwise
         dispose of any right or claim against the Debtor or any co-guarantor
         (including but without limitation the bringing or joining-in with any
         other creditor of any bankruptcy, liquidation or insolvency
         proceedings) in respect of any moneys paid by the Guarantor to the Bank
         hereunder or otherwise, nor have or exercise any rights as surety in
         competition with the Bank, and all rights or claims by the Guarantor
         against the Debtor are hereby subordinated to those of the Bank. Any
         payment received by the Guarantor in contravention of this clause shall
         be held in trust for the Bank.

7.       In case this Guarantee shall be determined, or called in by demand made
         by the Bank, the Bank may continue its account with the Debtor
         notwithstanding the determination or calling in and the Guarantor's
         liability in respect of the amount due from the Debtor at the date when
         the determination or calling in takes effect shall remain regardless of
         any subsequent dealings in the account.

8.       This Guarantee shall not be discharged nor shall the Guarantor's
         liability be affected by reason of any failure of or irregularity
         defect or informality in any security given by or on behalf of the
         Debtor in respect of the Secured Obligations nor by any legal
         limitation, disability, incapacity or want of any borrowing or other
         powers of or by the Guarantor or the Debtor or want of authority of any
         director, manager, official or other person appearing to be acting for
         the Debtor or the Guarantor in any matter in respect of the Secured
         Obligations and this Guarantee respectively, and such obligations or
         liabilities will be recoverable by the Bank from the Guarantor as sole
         or principal debtor.

9.       Where there is more than one person comprised in the term the Debtor,
         references to the Debtor shall, where the context admits, take effect
         as reference to such persons or any of them and where the Debtor is a
         firm shall include the person or persons from time to time constituting
         the firm whether or not under the same style or firm name and generally
         where the context so admits the singular will include the plural and
         the masculine the feminine.

10.      Where this Guarantee is signed by more than one person (other than as
         agent for a named principal) the agreements and obligations on the part
         of the Guarantor herein contained shall take effect as joint and
         several agreements and obligations and all references to the Guarantor
         shall take effect as references to the said persons or any of them and
         none of them shall be released from liability hereunder by reason of
         the Guarantee or a like guarantee not having been executed by any other
         person intended to execute or be bound or ceasing to be binding as a
         continuing security on any of them.

11.      Each provision of this Guarantee is severable and distinct from the
         others and if any provision should be or become invalid, illegal or
         unenforceable, the remaining provisions of this Guarantee shall not be
         affected or impaired thereby. A certificate by an officer of the Bank
         as to the amount for the time being due from the Debtor to the Bank
         shall, absent fraud or manifest error, be conclusive evidence for all
         purposes against the Guarantor.-No failure or delay by the Bank in
         exercising any right or remedy shall operate as a waiver thereof nor
         shall any single or partial exercise or waiver of any right or remedy
         preclude its further exercise or any other right or remedy.

12.      Where this Guarantee is given by the Guarantor as trustee of a named
         trust, any change and also any proposed or intended change of which the
         Guarantor is or becomes aware in the identity of the Trustees of that
         trust which may occur or be impending at any time and from time to time
         during the lifetime of the Secured Obligations shall be notified
         immediately in writing to the Bank. Such notification shall be sent or
         delivered to the Bank and marked for the attention of The Senior Vice
         President - Credit, and shall give all details known to the Guarantor
         or reasonably obtainable by him respecting the new or proposed or
         intended identity of the Trustees and their financial substance which
         would be information material to be known to a proposed lender to such
         Trustees, and the Guarantor shall, to the extent he is reasonably able
         so to do, supply such additional information in these respects as the
         Bank may reasonably require. Save where an express waiver hereof is
         given in writing by a Senior Manager or Vice President of the Bank, no
         change in the identity of the Trustees from the Guarantor as presently
         constituted shall have effect as against the Bank until the expiration
         of the later of five business days from the date notice as aforesaid is
         duly received by the Bank or (where during such period the Bank seeks
         to obtain from the Guarantor any additional information as contemplated
         above) five business days from the date of receipt by the Bank of any
         further written communication from the Guarantor in response thereto,
         and calculation thereof shall exclude the actual date of receipt by the
         Bank in each case, and until such date determined as aforesaid the
         Guarantor shall be and remain (or shall nonetheless be treated as so
         being and remaining) fully liable to the Bank in respect of the
         obligations of the Trustees in respect of this Guarantee and whether or
         not any assets of the Trust shall then be or remain vested in him and
         without prejudice to any continuing liability of the Guarantor as
         presently constituted or to any liability of the Trustees from time to
         time to the Bank (but so that the Bank shall not hereby be entitled to
         make and continue to enjoy any actual or notional or prospective double
         recovery in respect of the Secured Obligations save to the extent
         permitted the Bank by virtue of any provisions protective of the Bank
         as may be contained in this or any other written agreement touching
         upon the Secured Obligations where such provisions contemplate any
         supervening bankruptcy or insolvency or liquidation of any person as
         such bankruptcy insolvency or liquidation may affect any payment made
         or security given by any person to the Bank).

<PAGE>

13.      Any demand hereunder shall be made in writing signed by an officer of
         the Bank and if such demand is sent by post it may be addressed to the
         Guarantor by name at the address or place of business last known to the
         Bank and shall be considered as having been duly made whether or not
         the same be returned undelivered and notwithstanding the death of the
         Guarantor.

14.      Any release settlement or discharge between the Guarantor and the Bank
         shall be conditional upon no security disposition or payment to the
         Bank by the Debtor, the Guarantor or any other person being avoided or
         refunded or reduced by virtue of any provisions or enactments relating
         to bankruptcy or liquidation for the time being in force and the Bank
         shall be entitled (subject to any limit in the total amount recoverable
         under this Guarantee) to recover the value or amount of any such
         security disposition or payment from the Guarantor subsequently as if
         such release settlement or discharge had not occurred. Without
         prejudice to the generality of the foregoing, the Bank shall be
         entitled, notwithstanding any such release settlement or discharge, to
         retain any security held in respect of the Guarantor hereunder for a
         period of seven months after payment of all sums that are or may become
         due to the Bank from the Debtor, and if at any time within six months
         after such payment any bankruptcy or liquidation proceedings are
         commenced in respect of the Debtor, or a receiver is appointed in
         respect of any of the Debtor's assets, or if, following the death of
         the Debtor the Bank considers that circumstances exist calling for the
         administration of his estate as an insolvent estate, the Bank may
         continue to retain such security during such further period as the Bank
         may determine, in which event such security shall be deemed to have
         continued to have been held by the Bank as security in respect of this
         Guarantee.

15.      This Guarantee shall be governed by and construed in accordance with
         the laws of Bermuda. The Guarantor hereby irrevocably submits to the
         non-exclusive jurisdiction of the Bermuda Courts.

SIGNED by the above named Guarantor:

   ______________________________                _____________________________
            Print Name                                   Signature

or ______________________________                _____________________________
            Print Name                                   Signature

Directors/Director and Secretary of

North American Mortgage &                   NB-Where the Guarantor is a company,
Finance           Limited                   this Guarantee should be executed
acting for and on behalf of that            under hand and not under seal.
Company by virtue of a Resolution
of the Directors passed on

      14 MAY 2002

SIGNED by Director and Secretary of the above-named
corporate Guarantor:

   JAMES L. GIBBONS                                  /s/ JAMES L. GIBBONS
- -------------------------------                      ---------------------------
         Print Name                                           Signature

   PETER J. HARDY                                    /s/ PETER J. HARDY
- -------------------------------                      --------------------------
         Print Name                                           Signature

in the presence of:

Signature of witness /s/ MEGAN ARUDA
Name in print MEGAN ARUDA
Address 21 REID STREET HAMILTON HMII
Occupation FINANCIAL CONTROLLER                                Stamp

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.34
<SEQUENCE>15
<FILENAME>g80228exv10w34.txt
<DESCRIPTION>DEED OF INDEMNITY
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.34

                                 THE INDEMNITY

                             DATED: February 7, 2003

                          CONSOLIDATED WATER CO. LTD.

                                     -and-

                             EDMUND GIBBONS LIMITED

                         -----------------------------

                               DEED OF INDEMNITY
                         relating to various guarantees
                       provided by Edmund Gibbons Limited
                        in respect of the obligations of
                       Ocean Conversion (Cayman) Limited
                                      and
                          Ocean Conversion (BVI) Ltd.

                         -----------------------------

<PAGE>

THIS DEED is made this 7th day of February, 2003 by

1.       CONSOLIDATED WATER CO. LTD., formerly Cayman Water Company Limited, of
         Trafalgar Place, West Bay Road, P.O. Box 1114 GT, Grand Cayman
         (hereinafter "the Covenantor") in favour of

2.       EDMUND GIBBONS LIMITED of 21 Reid Street, Hamilton, Bermuda
         (hereinafter "EGL").

WHEREAS:

A. EGL has provided guarantees in respect of the obligations of Ocean Conversion
   (Cayman) Limited and Ocean Conversion (BVI) Ltd, full details of which are
   set out in Schedule 1 hereto (together "the Guarantees").

B. The Covenantor has entered into a share sale agreement ("the Agreement") with
   North-American Mortgage & Finance Corporation and Transcontinental Finance
   Corporation Limited (together "the Vendors") for the purchase of the shares
   in the capital of Ocean Conversion (Cayman) Limited and Ocean Conversion
   (BVI) Ltd. owned by the Vendors, details of which are set out in Schedule 2
   hereto ("the Shares"). Pursuant to the Agreement, the Covenantor has agreed
   to fully and effectively indemnify EGL and keep EGL indemnified against any
   and all liability, cost or expense of EGL under or in respect of the
   Guarantees and, furthermore, has undertaken to secure as soon as possible
   after completion of the sale and purchase of the Shares the full and final
   release of EGL from the Guarantees and the Covenantor has agreed to offer its
   own guarantees upon the same terms as the Guarantees in substitution therefor
   if necessary to secure such release.

C. The Covenantor has agreed to execute this Deed to give EGL the full benefit
   of such indemnity and undertaking.

NOW THIS DEED WITNESSETH as follows:

1.       The Covenantor hereby agrees to fully and effectively indemnify EGL and
         keep EGL indemnified against any and all liability, cost or expense of
         EGL under or in respect of the Guarantees and hereby agrees to pay and
         reimburse such sums as mentioned above to EGL on demand.

2.       The Covenantor hereby undertakes to secure as soon as possible the full
         and final release of EGL from the Guarantees and agrees that, if
         necessary to secure such release, the Covenantor shall offer its own
         guarantees upon the same terms as the Guarantees in substitution
         therefor.

3.       This Deed shall be binding on the Covenantor and its successors and
         assigns.

4.       The provisions of the Agreement relating to communications shall apply
         to any communication to be given under, or in connection with, this
         Deed.

                                      -1-

<PAGE>

5.       This Deed shall be governed in all respects by Cayman Islands law and
         the parties hereto hereby submit to the non-exclusive jurisdiction of
         the Cayman Islands courts.

IN WITNESS WHEREOF this Deed has been executed by the Covenantor and delivered
on the date first above written.

                                      -2-

<PAGE>

                                   SCHEDULE 1

                                 THE GUARANTEES

A guarantee limited to US$2,400,000.00 in respect of the obligations of OCC by
EGL in favour of The Bank of N.T. Butterfield & Son Limited undated but executed
by virtue of a resolution of the Directors of EGL passed on 5th March 2002;

A guarantee in respect of the obligations of OCC by EGL in favour of the
Governor of the Cayman Islands dated 5 May 1994; and

A guarantee limited to US$343,750.00 in respect of the obligations of OCBVI by
EGL in favour of The Bank of N.T. Butterfield & Son Limited dated 28th May
2002.

                                      -3-

<PAGE>

                                   SCHEDULE 2

                                   THE SHARES

1,695,000 ordinary shares in the capital of Ocean Conversion (Cayman) Limited
(formerly Reliable Water Cayman Ltd.) registered in the name of Transcontinental
Finance Corporation Limited.

555,000 Class A shares in the capital of Ocean Conversion (BVI) Ltd. (formerly
Reliable Water (BVI) Ltd.) registered in the name of North-American Mortgage &
Finance Corporation.

                                      -4-

<PAGE>

EXECUTED as a DEED and DELIVERED           )
by CONSOLIDATED WATER CO. LTD.,            )
acting by two Directors or a Director      )
and Secretary in the presence of:-         )
                                           )
/s/ Donald Miller                          )
- -------------------------------            )   /s/ Frederick W. McTaggart
Witness signature:                             -----------------------------
Witness name: Donald Miller                    Signature of Director
Address: Box 709 GT                            Name of Director:
Occupation: Attorney

/s/ Donald Miller                             /s/ J.M. Parker
- ------------------------------                ----------------------------
Witness signature:                            Signature of Director/
Witness name: Donald Miller                   Name of Director/
Address:                                      J.M. PARKER
Occupation:

                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.35
<SEQUENCE>16
<FILENAME>g80228exv10w35.txt
<DESCRIPTION>GUARANTEE OF INDEMNITY
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.35

[THE BANK OF N.T. BUTTERFIELD & SON LTD. LOGO]
The Bank of N.T. Butterfield & Son Ltd.
CREDIT DEPARTMENT                                        GUARANTEE AND INDEMNITY

Name of Debtor OCEAN CONVERSION (CAYMAN) LIMITED

Date ____________________

Name of Guarantor EDMUND GIBBONS LIMITED

To

    THE BANK OF N.T. BUTTERFIELD & SON LIMITED

<PAGE>

GUARANTEE AND INDEMNITY ("GUARANTEE")
by one or more persons or by a company
To THE BANK OF N. T. BUTTERFIELD & SON LIMITED (the Bank).
In consideration of the Bank giving or continuing to give credit, banking
facilities or other accommodation for so long as it may think fit to

OCEAN CONVERSION (CAYMAN) LIMITED                                  (the DEBTOR),

NOW

EDMUND GIBBONS LIMITED                                           (the GUARANTOR)

hereby unconditionally guarantees on demand to pay to the Bank all moneys
advanced to or paid to for or on account of the Debtor and interest and charges
thereon remaining unpaid and to discharge all obligations and liabilities
whether actual or contingent now or hereafter incurred to the Bank by the Debtor
whether on account of moneys advanced, bills of exchange, promissory notes,
guarantees, indemnities, interest, commission, banking charges or any instrument
or agreement whatsoever from time to time entered into by the Bank with or at
the request of the Debtor (whether incurred solely, severally or jointly and in
whatever style, name or form and whether as principal or surety) together with
interest (as well after as before any demand or judgment) to date of payment at
such rates and upon such terms as may from time to time be payable by the Debtor
(or which would have been so payable but for the death, liquidation, bankruptcy
or other incapacity of the Debtor or the unenforceability of any term or
condition of any agreement or instrument) and all commission fees and other
charges and all legal costs (including time and costs of in-house counsel) on a
full-indemnity basis and all other costs and expenses incurred by the Bank in
relation to the Debtor or this Guarantee or any other guarantee indemnity or
security for any moneys obligations or liabilities hereby guaranteed on a full
indemnity basis (all of the foregoing hereinafter termed the Secured
Obligations) and to make such payment without any set-off, deduction or
withholding save as may be expressly required of the Guarantor by law (in which
event the Guarantor on demand shall additionally pay to the Bank, by way of
agreed compensation, the full amount so withheld) Provided that the total amount
recoverable under this Guarantee shall not exceed

TWO MILLION FOUR HUNDRED THOUSAND US$2,400,000.00 dollars together with interest
and commission thereon and all costs, charges and expenses referred to above,
and in addition thereto, interest and charges thereon (as well after as before
judgment) from the date of demand by the Bank on the Guarantor at the rate
payable by the Debtor (or which would have been payable but for the liquidation,
bankruptcy or other incapacity of the Debtor or the unenforceability of any term
or condition of any agreement or instrument).

THE GUARANTOR agrees and confirms as follows:

1.       The Bank may without any consent from the Guarantor and without
         affecting the Guarantor's liability hereunder renew, vary or determine
         any credit or other facilities or accommodation given to the Debtor,
         hold over, renew, release or modify any term or condition of any
         security or guarantee now or hereafter held from the Debtor or any
         other person in respect of the Secured Obligations and grant time or
         indulgence to or compound with the Debtor or any other person and this
         Guarantee shall not be discharged nor shall the Guarantor's liability
         under it be affected by anything which would not have discharged or
         affected the Guarantor's liability if the Guarantor had been a
         principal debtor to the Bank instead of a Guarantor.

2.       This Guarantee shall be additional to any other guarantee or security
         now or hereafter held from the Guarantor in respect of the Secured
         Obligations, and the Bank shall not be required to exhaust its recourse
         against the Debtor or any security it may hold before being entitled to
         payment hereunder.

3.       This Guarantee shall be a continuing security and shall remain in force
         notwithstanding any disability or the death of the Guarantor, or the
         Bank's rights against the Debtor being barred by the Limitation Act
         1984 or otherwise, until determined by three calendar months' notice in
         writing from the Guarantor or the Personal Representatives of the
         Guarantor but such determination shall not affect the liability of the
         Guarantor for the amount recoverable at the date of the expiration of
         the notice. This Guarantee shall in any event remain property of the
         Bank.

4.       The Guarantor warrants that he has not taken and will not take without
         the written consent of the Bank the benefit of any security from the
         Debtor extending to the Secured Obligations or in connection with this
         Guarantee and, notwithstanding the foregoing, any security so taken and
         all moneys at any time received in respect thereof are hereby declared
         by the Guarantor to be held in trust for the Bank and as continuing
         security for the liability of the Guarantor to the Bank hereunder.

5.       In respect of the Guarantor's liability hereunder the Bank shall have a
         lien on all securities or other property of the Guarantor held by the
         Bank whether for safe custody or otherwise. The Bank shall further be
         entitled (as well before as after demand hereunder) to set off against
         any credit balance in any account of the Guarantor with the Bank
         (whether current or otherwise, whether alone or jointly with others,
         and in whatever currency, and subject to notice or not) the liability
         of the Guarantor to the Bank hereunder. Any conversion of any currency
         to any other currency will be made at the Bank's then prevailing rate
         of exchange as conclusively determined by the Bank.

<PAGE>

6.       This Guarantee shall apply to the ultimate balance owing by the Debtor
         to the Bank (as previously described) and until such balance has been
         paid in full the Guarantor shall not be entitled to share in any
         security held or money received by the Bank on account of that balance
         or to stand in the place of the Bank in respect of any security or
         money nor until such balance has been paid in full shall the Guarantor
         take any step to enforce, negotiate, assign, charge or otherwise
         dispose of any right or claim against the Debtor or any co-guarantor
         (including but without limitation the bringing or joining-in with any
         other creditor of any bankruptcy, liquidation or insolvency
         proceedings) in respect of any moneys paid by the Guarantor to the Bank
         hereunder or otherwise, nor have or exercise any rights as surety in
         competition with the Bank, and all rights or claims by the Guarantor
         against the Debtor are hereby subordinated to those of the Bank. Any
         payment received by the Guarantor in contravention of this clause shall
         be held in trust for the Bank.

7.       In case this Guarantee shall be determined, or called in by demand made
         by the Bank, the Bank may continue its account with the Debtor
         notwithstanding the determination or calling in and the Guarantor's
         liability in respect of the amount due from the Debtor at the date when
         the determination or calling in takes effect shall remain regardless of
         any subsequent dealings in the account.

8.       This Guarantee shall not be discharged nor shall the Guarantor's
         liability be affected by reason of any failure of or irregularity
         defect or informality in any security given by or on behalf of the
         Debtor in respect of the Secured Obligations nor by any legal
         limitation, disability, incapacity or want of any borrowing or other
         powers of or by the Guarantor or the Debtor or want of authority of any
         director, manager, official or other person appearing to be acting for
         the Debtor or the Guarantor in any matter in respect of the Secured
         Obligations and this Guarantee respectively, and such obligations or
         liabilities will be recoverable by the Bank from the Guarantor as sole
         or principal debtor.

9.       Where there is more than one person comprised in the term the Debtor,
         references to the Debtor shall, where the context admits, take effect
         as reference to such persons or any of them and where the Debtor is a
         firm shall include the person or persons from time to time constituting
         the firm whether or not under the same style or firm name and generally
         where the context so admits the singular will include the plural and
         the masculine the feminine.

10.      Where this Guarantee is signed by more than one person (other than as
         agent for a named principal) the agreements and obligations on the part
         of the Guarantor herein contained shall take effect as joint and
         several agreements and obligations and all references to the Guarantor
         shall take effect as references to the said persons or any of them and
         none of them shall be released from liability hereunder by reason of
         the Guarantee or a like guarantee not having been executed by any other
         person intended to execute or be bound or ceasing to be binding as a
         continuing security on any of them.

11.      Each provision of this Guarantee is severable and distinct from the
         others and if any provision should be or become invalid, illegal or
         unenforceable, the remaining provisions of this Guarantee shall not be
         affected or impaired thereby. A certificate by an officer of the Bank
         as to the amount for the time being due from the Debtor to the Bank
         shall, absent fraud or manifest error, be conclusive evidence for all
         purposes against the Guarantor.-No failure or delay by the Bank in
         exercising any right or remedy shall operate as a waiver thereof nor
         shall any single or partial exercise or waiver of any right or remedy
         preclude its further exercise or any other right or remedy.

12.      Where this Guarantee is given by the Guarantor as trustee of a named
         trust, any change and also any proposed or intended change of which the
         Guarantor is or becomes aware in the identity of the Trustees of that
         trust which may occur or be impending at any time and from time to time
         during the lifetime of the Secured Obligations shall be notified
         immediately in writing to the Bank. Such notification shall be sent or
         delivered to the Bank and marked for the attention of The Senior Vice
         President - Credit, and shall give all details known to the Guarantor
         or reasonably obtainable by him respecting the new or proposed or
         intended identity of the Trustees and their financial substance which
         would be information material to be known to a proposed lender to such
         Trustees, and the Guarantor shall, to the extent he is reasonably able
         so to do, supply such additional information in these respects as the
         Bank may reasonably require. Save where an express waiver hereof is
         given in writing by a Senior Manager or Vice President of the Bank, no
         change in the identity of the Trustees from the Guarantor as presently
         constituted shall have effect as against the Bank until the expiration
         of the later of five business days from the date notice as aforesaid is
         duly received by the Bank or (where during such period the Bank seeks
         to obtain from the Guarantor any additional information as contemplated
         above) five business days from the date of receipt by the Bank of any
         further written communication from the Guarantor in response thereto,
         and calculation thereof shall exclude the actual date of receipt by the
         Bank in each case, and until such date determined as aforesaid the
         Guarantor shall be and remain (or shall nonetheless be treated as so
         being and remaining) fully liable to the Bank in respect of the
         obligations of the Trustees in respect of this Guarantee and whether or
         not any assets of the Trust shall then be or remain vested in him and
         without prejudice to any continuing liability of the Guarantor as
         presently constituted or to any liability of the Trustees from time to
         time to the Bank (but so that the Bank shall not hereby be entitled to
         make and continue to enjoy any actual or notional or prospective double
         recovery in respect of the Secured Obligations save to the extent
         permitted the Bank by virtue of any provisions protective of the Bank
         as may be contained in this or any other written agreement touching
         upon the Secured Obligations where such provisions contemplate any
         supervening bankruptcy or insolvency or liquidation of any person as
         such bankruptcy insolvency or liquidation may affect any payment made
         or security given by any person to the Bank).

<PAGE>

13.      Any demand hereunder shall be made in writing signed by an officer of
         the Bank and if such demand is sent by post it may be addressed to the
         Guarantor by name at the address or place of business last known to the
         Bank and shall be considered as having been duly made whether or not
         the same be returned undelivered and notwithstanding the death of the
         Guarantor.

14.      Any release settlement or discharge between the Guarantor and the Bank
         shall be conditional upon no security disposition or payment to the
         Bank by the Debtor, the Guarantor or any other person being avoided or
         refunded or reduced by virtue of any provisions or enactments relating
         to bankruptcy or liquidation for the time being in force and the Bank
         shall be entitled (subject to any limit in the total amount recoverable
         under this Guarantee) to recover the value or amount of any such
         security disposition or payment from the Guarantor subsequently as if
         such release settlement or discharge had not occurred. Without
         prejudice to the generality of the foregoing, the Bank shall be
         entitled, notwithstanding any such release settlement or discharge, to
         retain any security held in respect of the Guarantor hereunder for a
         period of seven months after payment of all sums that are or may become
         due to the Bank from the Debtor, and if at any time within six months
         after such payment any bankruptcy or liquidation proceedings are
         commenced in respect of the Debtor, or a receiver is appointed in
         respect of any of the Debtor's assets, or if, following the death of
         the Debtor the Bank considers that circumstances exist calling for the
         administration of his estate as an insolvent estate, the Bank may
         continue to retain such security during such further period as the Bank
         may determine, in which event such security shall be deemed to have
         continued to have been held by the Bank as security in respect of this
         Guarantee.

15.      This Guarantee shall be governed by and construed in accordance with
         the laws of Bermuda. The Guarantor hereby irrevocably submits to the
         non-exclusive jurisdiction of the Bermuda Courts.

SIGNED by the above named Guarantor:

   Sir David Gibbons                                  /s/ Sir David Gibbons
   -----------------------------                      --------------------------
         Print Name                                             Signature

or James L. Gibbons                                   /s/ James L. Gibbons
   --------------------------                         --------------------------
         Print Name                                             Signature

Directors/Director and Secretary of

Edmund Gibbons Limited
acting for and on behalf of that            NB-Where the Guarantor is a company,
Company by virtue of a Resolution           this Guarantee should be executed
of the Directors passed on                  under hand and not under seal.

5th March, 2002

SIGNED by Directors/Director and Secretary of the
above-named corporate Guarantor:

Sir David Gibbons                                     /s/ Sir David Gibbons
- ----------------------------                         ---------------------------
          Print Name                                           Signature

James L. Gibbons                                     /s/ James L. Gibbons
- ----------------------------                         ---------------------------
          Print Name                                            Signature

in the presence of:

Signature of witness /s/ Peter Hardy
Name in print Peter Hardy
Address 21 Reid Street, Hamilton                            Stamp
Occupation Corporate Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>17
<FILENAME>g80228exv10w36.txt
<DESCRIPTION>GUARANTEE OF INDEMNITY
<TEXT>
<PAGE>

                                                                  EXHIBIT 10.36

[THE BANK OF N.T. BUTTERFIELD & SON LTD. LOGO]
The Bank of N.T. Butterfield & Son Ltd.
CREDIT DEPARTMENT                                        GUARANTEE AND INDEMNITY

Name of Debtor Ocean Conversion (BVI) Limited

Date 28 May 2002

Name of Guarantor Edmund Gibbons Limited

To

    THE BANK OF N.T. BUTTERFIELD & SON LIMITED

<PAGE>

GUARANTEE AND INDEMNITY ("GUARANTEE")
by one or more persons or by a company
To THE BANK OF N. T. BUTTERFIELD & SON LIMITED (the Bank).
In consideration of the Bank giving or continuing to give credit, banking
facilities or other accommodation for so long as it may think fit to

Ocean Conversion (BVI) Limited                                     (the DEBTOR),

NOW

Edmund Gibbons Limited                                         (the GUARANTOR)

hereby unconditionally guarantees on demand to pay to the Bank all moneys
advanced to or paid to for or on account of the Debtor and interest and charges
thereon remaining unpaid and to discharge all obligations and liabilities
whether actual or contingent now or hereafter incurred to the Bank by the Debtor
whether on account of moneys advanced, bills of exchange, promissory notes,
guarantees, indemnities, interest, commission, banking charges or any instrument
or agreement whatsoever from time to time entered into by the Bank with or at
the request of the Debtor (whether incurred solely, severally or jointly and in
whatever style, name or form and whether as principal or surety) together with
interest (as well after as before any demand or judgment) to date of payment at
such rates and upon such terms as may from time to time be payable by the Debtor
(or which would have been so payable but for the death, liquidation, bankruptcy
or other incapacity of the Debtor or the unenforceability of any term or
condition of any agreement or instrument) and all commission fees and other
charges and all legal costs (including time and costs of in-house counsel) on a
full-indemnity basis and all other costs and expenses incurred by the Bank in
relation to the Debtor or this Guarantee or any other guarantee indemnity or
security for any moneys obligations or liabilities hereby guaranteed on a full
indemnity basis (all of the foregoing hereinafter termed the Secured
Obligations) and to make such payment without any set-off, deduction or
withholding save as may be expressly required of the Guarantor by law (in which
event the Guarantor on demand shall additionally pay to the Bank, by way of
agreed compensation, the full amount so withheld) Provided that the total amount
recoverable under this Guarantee shall not exceed

$343,750 (Three hundred forty three thousand seven hundred fifty -- dollars)
together with interest and commission thereon and all costs, charges and
expenses referred to above, and in addition thereto, interest and charges
thereon (as well after as before judgment) from the date of demand by the Bank
on the Guarantor at the rate payable by the Debtor (or which would have been
payable but for the liquidation, bankruptcy or other incapacity of the Debtor or
the unenforceability of any term or condition of any agreement or instrument).

THE GUARANTOR agrees and confirms as follows:

1.       The Bank may without any consent from the Guarantor and without
         affecting the Guarantor's liability hereunder renew, vary or determine
         any credit or other facilities or accommodation given to the Debtor,
         hold over, renew, release or modify any term or condition of any
         security or guarantee now or hereafter held from the Debtor or any
         other person in respect of the Secured Obligations and grant time or
         indulgence to or compound with the Debtor or any other person and this
         Guarantee shall not be discharged nor shall the Guarantor's liability
         under it be affected by anything which would not have discharged or
         affected the Guarantor's liability if the Guarantor had been a
         principal debtor to the Bank instead of a Guarantor.

2.       This Guarantee shall be additional to any other guarantee or security
         now or hereafter held from the Guarantor in respect of the Secured
         Obligations, and the Bank shall not be required to exhaust its recourse
         against the Debtor or any security it may hold before being entitled to
         payment hereunder.

3.       This Guarantee shall be a continuing security and shall remain in force
         notwithstanding any disability or the death of the Guarantor, or the
         Bank's rights against the Debtor being barred by the Limitation Act
         1984 or otherwise, until determined by three calendar months' notice in
         writing from the Guarantor or the Personal Representatives of the
         Guarantor but such determination shall not affect the liability of the
         Guarantor for the amount recoverable at the date of the expiration of
         the notice. This Guarantee shall in any event remain property of the
         Bank.

4.       The Guarantor warrants that he has not taken and will not take without
         the written consent of the Bank the benefit of any security from the
         Debtor extending to the Secured Obligations or in connection with this
         Guarantee and, notwithstanding the foregoing, any security so taken and
         all moneys at any time received in respect thereof are hereby declared
         by the Guarantor to be held in trust for the Bank and as continuing
         security for the liability of the Guarantor to the Bank hereunder.

5.       In respect of the Guarantor's liability hereunder the Bank shall have a
         lien on all securities or other property of the Guarantor held by the
         Bank whether for safe custody or otherwise. The Bank shall further be
         entitled (as well before as after demand hereunder) to set off against
         any credit balance in any account of the Guarantor with the Bank
         (whether current or otherwise, whether alone or jointly with others,
         and in whatever currency, and subject to notice or not) the liability
         of the Guarantor to the Bank hereunder. Any conversion of any currency
         to any other currency will be made at the Bank's then prevailing rate
         of exchange as conclusively determined by the Bank.

<PAGE>

6.       This Guarantee shall apply to the ultimate balance owing by the Debtor
         to the Bank (as previously described) and until such balance has been
         paid in full the Guarantor shall not be entitled to share in any
         security held or money received by the Bank on account of that balance
         or to stand in the place of the Bank in respect of any security or
         money nor until such balance has been paid in full shall the Guarantor
         take any step to enforce, negotiate, assign, charge or otherwise
         dispose of any right or claim against the Debtor or any co-guarantor
         (including but without limitation the bringing or joining-in with any
         other creditor of any bankruptcy, liquidation or insolvency
         proceedings) in respect of any moneys paid by the Guarantor to the Bank
         hereunder or otherwise, nor have or exercise any rights as surety in
         competition with the Bank, and all rights or claims by the Guarantor
         against the Debtor are hereby subordinated to those of the Bank. Any
         payment received by the Guarantor in contravention of this clause shall
         be held in trust for the Bank.

7.       In case this Guarantee shall be determined, or called in by demand made
         by the Bank, the Bank may continue its account with the Debtor
         notwithstanding the determination or calling in and the Guarantor's
         liability in respect of the amount due from the Debtor at the date when
         the determination or calling in takes effect shall remain regardless of
         any subsequent dealings in the account.

8.       This Guarantee shall not be discharged nor shall the Guarantor's
         liability be affected by reason of any failure of or irregularity
         defect or informality in any security given by or on behalf of the
         Debtor in respect of the Secured Obligations nor by any legal
         limitation, disability, incapacity or want of any borrowing or other
         powers of or by the Guarantor or the Debtor or want of authority of any
         director, manager, official or other person appearing to be acting for
         the Debtor or the Guarantor in any matter in respect of the Secured
         Obligations and this Guarantee respectively, and such obligations or
         liabilities will be recoverable by the Bank from the Guarantor as sole
         or principal debtor.

9.       Where there is more than one person comprised in the term the Debtor,
         references to the Debtor shall, where the context admits, take effect
         as reference to such persons or any of them and where the Debtor is a
         firm shall include the person or persons from time to time constituting
         the firm whether or not under the same style or firm name and generally
         where the context so admits the singular will include the plural and
         the masculine the feminine.

10.      Where this Guarantee is signed by more than one person (other than as
         agent for a named principal) the agreements and obligations on the part
         of the Guarantor herein contained shall take effect as joint and
         several agreements and obligations and all references to the Guarantor
         shall take effect as references to the said persons or any of them and
         none of them shall be released from liability hereunder by reason of
         the Guarantee or a like guarantee not having been executed by any other
         person intended to execute or be bound or ceasing to be binding as a
         continuing security on any of them.

11.      Each provision of this Guarantee is severable and distinct from the
         others and if any provision should be or become invalid, illegal or
         unenforceable, the remaining provisions of this Guarantee shall not be
         affected or impaired thereby. A certificate by an officer of the Bank
         as to the amount for the time being due from the Debtor to the Bank
         shall, absent fraud or manifest error, be conclusive evidence for all
         purposes against the Guarantor. No failure or delay by the Bank in
         exercising any right or remedy shall operate as a waiver thereof nor
         shall any single or partial exercise or waiver of any right or remedy
         preclude its further exercise or any other right or remedy.

12.      Where this Guarantee is given by the Guarantor as trustee of a named
         trust, any change and also any proposed or intended change of which the
         Guarantor is or becomes aware in the identity of the Trustees of that
         trust which may occur or be impending at any time and from time to time
         during the lifetime of the Secured Obligations shall be notified
         immediately in writing to the Bank. Such notification shall be sent or
         delivered to the Bank and marked for the attention of The Senior Vice
         President - Credit, and shall give all details known to the Guarantor
         or reasonably obtainable by him respecting the new or proposed or
         intended identity of the Trustees and their financial substance which
         would be information material to be known to a proposed lender to such
         Trustees, and the Guarantor shall, to the extent he is reasonably able
         so to do, supply such additional information in these respects as the
         Bank may reasonably require. Save where an express waiver hereof is
         given in writing by a Senior Manager or Vice President of the Bank, no
         change in the identity of the Trustees from the Guarantor as presently
         constituted shall have effect as against the Bank until the expiration
         of the later of five business days from the date notice as aforesaid is
         duly received by the Bank or (where during such period the Bank seeks
         to obtain from the Guarantor any additional information as contemplated
         above) five business days from the date of receipt by the Bank of any
         further written communication from the Guarantor in response thereto,
         and calculation thereof shall exclude the actual date of receipt by the
         Bank in each case, and until such date determined as aforesaid the
         Guarantor shall be and remain (or shall nonetheless be treated as so
         being and remaining) fully liable to the Bank in respect of the
         obligations of the Trustees in respect of this Guarantee and whether or
         not any assets of the Trust shall then be or remain vested in him and
         without prejudice to any continuing liability of the Guarantor as
         presently constituted or to any liability of the Trustees from time to
         time to the Bank (but so that the Bank shall not hereby be entitled to
         make and continue to enjoy any actual or notional or prospective double
         recovery in respect of the Secured Obligations save to the extent
         permitted the Bank by virtue of any provisions protective of the Bank
         as may be contained in this or any other written agreement touching
         upon the Secured Obligations where such provisions contemplate any
         supervening bankruptcy or insolvency or liquidation of any person as
         such bankruptcy insolvency or liquidation may affect any payment made
         or security given by any person to the Bank).

<PAGE>

13.      Any demand hereunder shall be made in writing signed by an officer of
         the Bank and if such demand is sent by post it may be addressed to the
         Guarantor by name at the address or place of business last known to the
         Bank and shall be considered as having been duly made whether or not
         the same be returned undelivered and notwithstanding the death of the
         Guarantor.

14.      Any release settlement or discharge between the Guarantor and the Bank
         shall be conditional upon no security disposition or payment to the
         Bank by the Debtor, the Guarantor or any other person being avoided or
         refunded or reduced by virtue of any provisions or enactments relating
         to bankruptcy or liquidation for the time being in force and the Bank
         shall be entitled (subject to any limit in the total amount recoverable
         under this Guarantee) to recover the value or amount of any such
         security disposition or payment from the Guarantor subsequently as if
         such release settlement or discharge had not occurred. Without
         prejudice to the generality of the foregoing, the Bank shall be
         entitled, notwithstanding any such release settlement or discharge, to
         retain any security held in respect of the Guarantor hereunder for a
         period of seven months after payment of all sums that are or may become
         due to the Bank from the Debtor, and if at any time within six months
         after such payment any bankruptcy or liquidation proceedings are
         commenced in respect of the Debtor, or a receiver is appointed in
         respect of any of the Debtor's assets, or if, following the death of
         the Debtor the Bank considers that circumstances exist calling for the
         administration of his estate as an insolvent estate, the Bank may
         continue to retain such security during such further period as the Bank
         may determine, in which event such security shall be deemed to have
         continued to have been held by the Bank as security in respect of this
         Guarantee.

15.      This Guarantee shall be governed by and construed in accordance with
         the laws of Bermuda. The Guarantor hereby irrevocably submits to the
         non-exclusive jurisdiction of the Bermuda Courts.

SIGNED by the above named Guarantor:

           Print Name                                         Signature

or ______________________________                 ______________________________
          Print Name                                          Signature

Directors/Director and Secretary of

Edmund Gibbons Limited                      NB-Where the Guarantor is a company,
acting for and on behalf of that            this Guarantee should be executed
Company by virtue of a Resolution           under hand and not under seal.
of the Directors passed on

14 MAY 2002

SIGNED by Director and Secretary of the
above-named corporate Guarantor:

      JAMES L. GIBBONS                               /s/ JAMES L. GIBBONS
- --------------------------                           ---------------------------
         Print Name                                         Signature

         PETER J. HARDY                              /s/ PETER J. HARDY
- --------------------------                           ---------------------------
           Print Name                                        Signature

in the presence of:

Signature of witness /s/ MEGAN ARUDA

Name in print MEGAN ARUDA

Address 21 REID STREET HAMILTON [ILLEGIBLE]                    Stamp

Occupation FINANCIAL CONTROLLER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.38
<SEQUENCE>18
<FILENAME>g80228exv10w38.txt
<DESCRIPTION>IRREVOCABLE UNDERTAKING
<TEXT>
<PAGE>

                                                                  EXHIBIT 10.38

THIS IRREVOCABLE UNDERTAKING (the "Undertaking") is given on the 7th day of
February, 2003, by:

CONSOLIDATED WATER CO. LTD., a corporation incorporated under the laws of the
Cayman Islands, (hereinafter referred to as the "Borrower")

To:

SCOTIABANK (CAYMAN ISLANDS) LTD., a banking corporation incorporated and
licensed pursuant to the laws of the Cayman Islands (hereinafter referred to as
the "Bank")

 WHEREAS:

         (a)      Pursuant to a loan agreement executed between the Borrower and
                  the Bank dated the 7th day of February, 2003 (the "Loan
                  Agreement") the Bank has agreed to make certain loan
                  facilities available to the Borrower for certain specified
                  purposes including the financing of the Acquisition;

         (b)      In consideration of the Bank making available to the Borrower
                  the financing for the Acquisition the Borrower has agreed to
                  provide the Bank with various security instruments including
                  this Undertaking; and

         (c)      The Borrower has irrevocably agreed, pursuant to this
                  Undertaking, that upon acquiring Control as defined herein,
                  the Borrower shall ensure that the Board of Directors take the
                  actions, and execute the documents, called for herein.

NOW THEREFORE the Borrower provides the following irrevocable undertaking to the
Bank;

                                    SECTION 1

                    DEFINITIONS AND RULES OF INTERPERTATIONS

1.1      Unless specifically defined herein, capitalized terms used in this
         Undertaking shall have the meanings specified in Annex "A" to the Loan
         Agreement.

1.2      In addition, wherever used in this Undertaking the following terms have
         the meanings opposite them:

         "BOARD OF DIRECTORS" means, the board of directors of the Company;

         "COMPANY" means, Ocean Conversion (Cayman) Ltd.;

<PAGE>

         "CONTROL" means, the purchase of the Shares which shall provide the
         Borrower with the ability to elect to the Board of Directors, a
         majority of such directors;

         "DIRECTORS" means, those members of the Board of Directors, which have
         been elected to the Board of Directors by the Borrower exercising its
         voting rights accordingly;

         "GUARANTEE" means, the Guarantee attached hereto as Exhibit "I";

         "OPINION" means, a legal opinion issued by the Company's Cayman Islands
         legal counsel in usual and customary form, reasonably satisfactory to
         the Bank, as to, amongst other things, the validity and enforceability
         of the Guarantee;

         "SHARES" means, a 100% shareholding in the Company.

                                   SECTION 2

2.1      The Borrower hereby irrevocably and unconditionally undertakes that:

         (a)      The proceeds of the Acquisition Loan shall be used to purchase
                  the Shares;

         (b)      Upon completion of the Acquisition, the Borrower shall have
                  the ability to exert control over the Company either through
                  Control of the Board of Directors or through the voting of the
                  Borrower's Shares;

         (c)      Once the Shares have been acquired, that the Borrower shall
                  exercise the franchise attached to such Shares in order to
                  elect the Directors;

         (d)      The Board of Directors shall approve the Company obtaining
                  from the Bank a separate loan to be utilized for the sole
                  purpose of retiring the existing debt of the Company owed to
                  the Bank of Butterfield;

         (e)      With respect to the loan referred to in sub-paragraph (d)
                  above, the Company shall accept a loan offered by the Bank
                  pursuant to the terms set out in the Term Sheet attached
                  hereto as Exhibit II;

         (f)      Simultaneously with the Bank providing the Company with the
                  financing referred to in subparagraph (e) above or as soon
                  thereafter as possible, the Board of Directors shall procure
                  that the Company issues the Guarantee and cause the issuance
                  of the Opinion;

         (g)      The Company shall remain under the control of the Borrower;
                  and

         (h)      It shall not permit to exist any mortgage, charge, lien or any
                  other form of security interest over the Shares, other than
                  the security interest contemplated in the Security Documents.

                                       2

<PAGE>

                                   SECTION 4

                                    DEFAULT

4.1      Failure by: (i) the Borrower; (ii) the Board of Directors; or (iii) the
         Company to comply in a timely manner with any term, condition,
         requirement or obligation contained in this Undertaking shall
         constitute an Event of Default pursuant to Section 17.1(q) of the Loan
         Agreement and the Bank shall be entitled to exercise any remedy
         available to it under the Loan Agreement, the Security Documents or at
         law or equity.

4.2      Failure by the Company to issue in favour of the Bank the Guarantee and
         the Opinion within thirty (30) days of the date of execution of the
         Loan Agreement shall constitute a breach of this Undertaking and an
         Event of Default pursuant to Section 17.1(q) of the Loan Agreement.

                                   SECTION 5

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

5.1      The Borrower hereby represents and warrants that:

         (a)      It is a corporation, organized, existing and a good standing
                  under the laws of the Cayman Islands;

         (b)      The execution, delivery and performance by the Borrower of
                  this Undertaking and the obligations contained herein are
                  within its corporate powers, have been duly authorized by all
                  necessary corporate action, and do not contravene (i) its
                  Memorandum or Articles of Association; or (ii) any law or any
                  contractual restriction binding on or effecting it or its
                  property, and is enforceable against it in accordance with the
                  terms of this Undertaking;

         (c)      No authorization or approval or other action by, or no notice
                  to or filing with, any Government Authority or other
                  regulatory body is required for the due execution, delivery
                  and performance by the Borrower of this Undertaking;

         (d)      No event has occurred which constitutes, or which with the
                  giving of notice or the lapse of time or relevant
                  determination, or any combination thereof, would constitute a
                  contravention of, or default under, any agreement or
                  instrument by which it or any of its assets is bound or
                  effected, and which has, or could be regarded as having, a
                  Material Adverse Effect on its ability to observe or perform
                  any of its obligation under this Undertaking;

                                       3

<PAGE>

         (e)      No litigation, arbitration or administrative proceeding or
                  claim which might itself or together with any other such
                  proceeding or claim have a Material Adverse Effect on its
                  ability to observe or perform its obligation under this
                  Undertaking, is presently in progress or pending, or to the
                  best of the knowledge, information and belief of it,
                  threatened against it, or any of its assets;

         (f)      It has not taken any action, nor has any steps been taken by
                  or against or with reference to it for the winding-up,
                  disillusioned, bankruptcy or reorganization of it, or for the
                  appointment of a receiver, trustee or similar officer of it
                  with respect to any or all of its assets or revenues;

         (g)      There are no current liabilities or contingent liabilities,
                  other than those which are owed to the Bank, which would have
                  a Material Adverse Effect on the Borrower;

         (h)      The execution and performance of this Undertaking by the
                  Borrower will not violate any judgement, order decree or
                  statute; and

         (i)      That the Shares acquired pursuant to the Acquisition shall
                  provide the Borrower with Control of the Company.

                                   SECTION 6

                           TERMINATION OF UNDERTAKING

This Undertaking and the obligations contained herein shall remain in place
until the earlier of: (i) all of the conditions in this Undertaking have been
fulfilled; (ii) all amounts owed to the Bank pursuant to the Loan Agreement have
been repaid in full.

                                   SECTION 7

                                 MISCELLANEOUS

7.1      NO WAIVERS: REMEDIES CUMULATIVE

         (a)      No failure or delay on the part of the Bank in exercising any
                  right, power or privilege hereunder or under the Loan
                  Agreement and other Security Documents and no course of
                  dealing between the Borrower and the Bank shall operate as a
                  waiver thereof; nor shall any single or partial exercise of
                  any right, power or privilege hereunder preclude any other or
                  further exercise thereof or the exercise of any other right,
                  power or privilege.

         (b)      The rights and remedies herein expressly provided are
                  cumulative and not exclusive of any rights or remedies which
                  the Bank would otherwise have in law.

                                       4

<PAGE>

7.2      COSTS AND EXPENSES

         The Borrower hereby covenants with the Bank to keep the Bank fully and
         effectively indemnified against all legal and other costs charges and
         expenses from time to time incurred by the Bank in connection with the
         enforcement this Undertaking and to pay the same on demand in writing
         from the Bank.

7.3      ASSIGNMENT: FUTURE RIGHTS

         (a)      The Bank shall be entitled to assign its benefit under this
                  Undertaking or any part thereof to any person.

         (b)      This Undertaking may not be assigned or transferred, in whole
                  or in part, by the Borrower without the written consent of the
                  Bank, which consent the Bank may in its sole discretion refuse
                  to provide.

7.4      NOTICES

All notices, requests, consents, demands, directions, agreements or other
instruments or communications between the Bank and the Borrower required to be
given hereunder shall be in writing and shall be; (a) sent by private courier
service, next day delivery, or by telefax, or other similar form of rapid
transmission, confirmed by sending (by private courier service, next day
delivery) written confirmation; or (b) personally delivered to the receiving
party or, if not an individual, to an officer or general partner of the
receiving party. All such communications shall be sent or delivered addressed as
follows:

         If to the Borrower:

         Consolidated Water Co. Ltd,
         P.O.Box 1114 GT
         Trafalgar House
         Grand Cayman, Cayman Islands.

         Attn: Mr. Jeffrey Parker
         Telephone No: 345-945-4277
         Fax No: 345-949-2957

         If to the Bank:

         Scotiabank (Cayman Islands) Ltd.
         Scotia Centre,
         Cardinal Avenue,
         P.O.Box 689,
         Grand Cayman.

         Attn: Commercial Banking Manager

                                       5

<PAGE>

         Telephone: 345-949-7666
         Fax: 345-949-5130

         Any party hereto may, by notice given hereunder, designate any further
         or different addresses to which subsequent notices, requests or other
         communications shall be sent. All such notices and other
         communications shall be effective when received.

7.5      APPLICABLE LAW & JURISDICTION

         (a)      This Undertaking shall be construed and enforced in accordance
                  with, and governed by, the laws of the Cayman Islands.

         (b)      The parties hereto irrevocably submit to the jurisdiction of
                  the courts of the Cayman Islands.

         (c)      The submission to the jurisdiction of the courts of the Cayman
                  Islands shall not (and shall not be construed so as to) limit
                  the right of the Bank to take proceedings against the Borrower
                  in any other court of competent jurisdiction, nor shall the
                  taking of proceedings in any one or more jurisdictions
                  preclude the taking of proceedings in any other jurisdiction,
                  whether concurrently or not.

                 REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK

                                       6

<PAGE>

IN WITNESS WHEREOF this Undertaking has been executed on the date first written
above.

                                                     CONSOLIDATED WATER CO. LTD.

                                                     By: /s/ [ILLEGIBLE]
                                                         -----------------------
                                                           Authorized Signatory

                                                SCOTIABANK (CAYMAN ISLANDS) LTD.

                                                     By: /s/ [ILLEGIBLE]
                                                         -----------------------
                                                           Authorized Signatory

                                       7

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                                  EXHIBIT "I"

                      FORMAT OF GUARANTEE TO BE ISSUED BY

                         OCEAN CONVERSION (CAYMAN) LTD.

                                       8

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===============================================================================

                                   GUARANTEE

                                       by

                         OCEAN CONVERSION (CAYMAN) LTD.

                                  IN FAVOUR OF

                        SCOTIABANK (CAYMAN ISLANDS) LTD.

                         Dated the ___ day of___, 2003

===============================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                              <C>
SECTION 1. DEFINITIONS AND INTERPRETATION .................................................       2
         1.1 General Definitions ..........................................................       2
         1.2 Interpretation ...............................................................       3
SECTION 2. GUARANTEE ......................................................................       3
         2.1 Guarantor Guaranteed Obligations .............................................       3
         2.2 Continuing Guarantee .........................................................       3
         2.3 Payment of Guaranteed Obligations ............................................       4
         2.4 No Set-off ...................................................................       4
         2.5 Taxes ........................................................................       4
         2.6 Application of Payments ......................................................       4
SECTION 3. SAVING PROVISIONS ..............................................................       4
         3.1 Change in Guaranteed Obligations .............................................       4
         3.2 Waiver of Defenses ...........................................................       5
         3.3 Immediate Recourse ...........................................................       5
         3.4 Non-Competition ..............................................................       5
         3.5 Bankruptcy or Liquidation of the Borrower ....................................       6
         3.6 Appropriation of Moneys ......................................................       6
         3.7 Reinstatement ................................................................       6
         3.8 Additional Security ..........................................................       6
SECTION 4. INDEMNITY ......................................................................       6
         4.1 Indemnity ....................................................................       6
SECTION 5. REPRESENTATIONS AND WARRANTIES .................................................       7
         5.1 Representations and Warranties ...............................................       7
         5.2 Bank's Reliance ..............................................................       7
         5.3 Rights and Remedies not Limited ..............................................       7
SECTION 6. COVENANTS ......................................................................       8
         6.1 Guarantor Covenants ..........................................................       8
SECTION 7. MISCELLANEOUS ..................................................................       8
         7.1 Notices ......................................................................       8
         7.2 English Language .............................................................       9
         7.3 No Waiver, Remedies Cumulative ...............................................       9
         7.4 Governing Law and Jurisdiction ...............................................       9
         7.5 Submission ...................................................................       9
         7.6 Judgments and Immunity .......................................................      10
         7.7 Benefit of Guarantee .........................................................      11
         7.8 Expenses .....................................................................      11
         7.9 Amendment or Waiver ..........................................................      11
         7.10 Counterparts ................................................................      11
         7.11 Set-off .....................................................................      11
         7.12 Currency Indemnity ..........................................................      11
</TABLE>

<PAGE>

         THIS GUARANTEE ("GUARANTEE"), dated the ___ day of _____, 2003, is
made as a deed by;

(1)      OCEAN CONVERSION (CAYMAN) LTD., a company organized and existing under
the laws of the Cayman Islands ("GUARANTOR");

in favour of

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").

Defined terms used herein shall have the meanings specified in Section 1.

         WHEREAS:

         (A)      Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").

         (B)      It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.

         (C)      The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.

         (D)      To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.

         (E)      The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. DEFINITIONS AND INTERPRETATION.

         1.1 General Definitions.

                  (a) Unless the context otherwise requires, capitalized terms
used in this Guarantee without definition have the meanings specified in Annex A
to the Loan Agreement.

                  (b) In addition, wherever used in this Guarantee, unless the
context otherwise requires, the following terms have the meaning opposite it:

         "FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

         "GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Loan Agreement and the other
Financing Documents, and in any capacity, irrespective of whether such
liabilities and obligations:

                                    (i)      are present or future;

                                    (ii)     are actual, contingent or
                                             otherwise;

<PAGE>

                                    (iii)    are at any time ascertained or
                                             unascertained;

                                    (iv)     are owed or incurred by or on
                                             account of the Borrower alone, or
                                             severally or jointly with any other
                                             person;

                                    (v)      are owed or incurred as principal,
                                             interest, fees, charges, taxes,
                                             duties or other imports, damages
                                             (whether for breach of contract or
                                             tort or incurred on any other
                                             ground), losses, costs or expenses,
                                             or on any other account; or

                                    (vi)     comprise any combination of the
                                             above.

         provided that the Guaranteed Obligations shall be limited to the lesser
of: (i) the total amount outstanding under the Financing Documents; and (ii) the
maximum amount of indebtedness and liability of the Borrower that the Guarantor
is able to guarantee and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.

         1.2 Interpretation.

                  The rules of interpretation set forth in Section 18.13 of the
Loan Agreement shall apply to this Guarantee.

         SECTION 2. GUARANTEE.

         2.1 Guarantor Guaranteed Obligations. The Guarantor irrevocably and
absolutely, as principal obligor and not merely as surety, guarantees and
promises to pay, upon demand of the Bank, the Guaranteed Obligations not paid or
performed by the Borrower when due in the same manner in all respects as the
Guaranteed Obligations are required to be paid or performed by the Borrower.

         2.2 Continuing Guarantee. (a) The guarantee and the indemnity of the
Guarantor contained in this Guarantee is a continuing obligation of the
Guarantor (and all liabilities to which it applies or may apply under the terms
of this Guarantee shall be conclusively presumed to have been created in
reliance on such guarantee), notwithstanding any settlement of account or the
occurrence of any other thing, and shall remain in full force and effect until:

                  (i)      the Guaranteed Obligations have been fully paid or
                           performed strictly in accordance with the provisions
                           of the Financing Documents, regardless of any
                           intermediate payment or discharge in whole or in
                           part; and

                  (ii)     all of the obligations of the Guarantor under this
                           Guarantee have been fully performed in accordance
                           with this Guarantee.

         (b)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall be additional, separate and independent obligations of the
Guarantor.

         (c)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall survive the termination of the Financing Documents.

<PAGE>

         (d)      The Guarantor's obligations under this Guarantee can be
discharged only by performance and then only to the extent of such performance.
Those obligations are not subject to any prior notice to, demand upon or action
against the Borrower or any other Person or to any prior notice to the Guarantor
of any default by the Borrower.

         2.3 Payment of Guaranteed Obligations. The Guarantor shall make payment
of the Guaranteed Obligations under Section 2.1 (Guarantor Guaranteed
Obligations) as provided in the relevant Financing Documents.

         2.4 No Set-off. All payments which the Guarantor is required to make
under this Guarantee shall be without any set-off, counterclaim or condition.

         2.5 Taxes.

         (a)      The Guarantor shall pay or cause to be paid all present and
future taxes, duties, fees and other charges of whatsoever nature (excluding
income taxes), if any, now or in the future levied or imposed by any
Governmental Authority or any similar body in the jurisdiction in which the
Guarantor is located or out of which a payment is made on or in connection with
the payment of any and all amounts due under this Guarantee.

         (b)      All payments due under this Guarantee shall be made without
deduction for or on account of any such taxes, duties, fees or other charges.

         (c)      If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made such payments without deduction, the amounts
due under this Guarantee shall be increased to such amount as may be necessary
so that the Bank receives the full amount it would have received (taking into
account any such taxes, duties, fees or other charges payable on amounts payable
by the Guarantor under this subsection) had such payments been made without such
deduction.

         (d)      If subsection (c) above applies and the Bank so requires, the
Guarantor shall deliver to the Bank official tax receipts evidencing payment (or
certified copies of them) within thirty (30) days of the date of payment.

         2.6 Application of Payments. The Bank may apply any amounts received by
it or recovered under:

         (a)      any Security Document; and

         (b)      any other document or agreement which is a security for any of
the Guaranteed Obligations and any other moneys,

in such manner as it determines in its absolute discretion in accordance with
the Financing Documents.

         SECTION 3. SAVING PROVISIONS.

         3.1 Change in Guaranteed Obligations. The obligations of the Guarantor
under this Guarantee shall extend to any change in the Guaranteed Obligations:

         (a)      as a result of any amendment, supplement, renewal or
replacement of any Financing Document or the occurrence of any other thing; and

<PAGE>

         (b)      regardless of whether the Guarantor is aware of, has consented
to or is given notice of any alteration, variation, amendment, supplement,
renewal or replacement of any Financing Document or the occurrence of such other
thing.

         3.2 Waiver of Defenses. Except for payment or performance in full of
the Guaranteed Obligations, the payment in full by the Guarantor of its
obligations under this Guarantee or otherwise as provided in this Guarantee, the
Guarantor's obligations under this Guarantee shall not be discharged, impaired
or otherwise adversely affected by any act, omission, circumstance, matter or
thing which, but for this provision, would reduce, release or prejudice any of
its obligations under this Guarantee or which might otherwise constitute a legal
or equitable discharge or defense of a surety or a guarantor, including (whether
or not known to the Guarantor or the Borrower):

         (a)      any time, waiver, composition, forbearance or concession given
to the Borrower or any other person;

         (b)      any assertion of, or failure to assert, or delay in asserting,
any right, power or remedy against the Borrower or any other person, or in
respect of any security for the Loans;

         (c)      any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Financing Document or of any other
agreement or security between the Bank and the Borrower;

         (d)      any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order,

         (e)      the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;

         (f)      any purported or actual assignment, transfer, novation or
disposal of, or granting any participation in, any of the Loans to any other
party;

         (g)      any Financing Document being in whole or in part illegal,
void, voidable, avoided, invalid, unenforceable or otherwise of limited force
and effect; or

         (h)      any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
in respect of the Guaranteed Obligations or any of them.

         3.3 Immediate Recourse. The Guarantor waives any right it may have of
first requiring the Bank (or any trustee, agent or other person acting on its
behalf) to proceed against or enforce any other rights or security or claim
payment from any person before claiming from the Guarantor under this Guarantee.

         3.4 Non-Competition. (a) If any amounts have become payable or have
been paid by the Guarantor under this Guarantee, the Guarantor shall not, in
respect of such moneys, seek to enforce repayment, obtain the benefit of any
security or exercise any other rights or legal remedies of any kind which may
accrue to the Guarantor against the Borrower, whether by way of subrogation,
offset, counterclaim or otherwise, in respect of the amount so payable or so
paid (or in respect of any other moneys for the time being due to the Guarantor
from the Borrower), if and for so long as any moneys remain outstanding to the
Bank under the

<PAGE>

Financing Documents. The Guarantor shall hold in trust for, and forthwith pay or
transfer to, the Bank any payment or distribution or benefit of security
received by it contrary to this Section 3.4(a).

         (b)      Upon the payment and satisfaction in full of all Guaranteed
Obligations and provided that no amounts (actual or contingent) remain
outstanding to the Bank under the Loan Agreement, the Guarantor, if it has made
a payment under this Guarantee, shall be entitled to exercise its rights of
subrogation to its proportion of all relevant rights of the Bank against the
Borrower pursuant to the Financing Documents. The Bank shall promptly execute,
at the expense of the Guarantor, an assignment and such other documents in such
form as the Guarantor may reasonably request to transfer such proportion of such
rights of the Bank against the Borrower to the Guarantor as are required for the
Guarantor to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not in the
name of the Bank.

         3.5 Bankruptcy or Liquidation of the Borrower. If the Borrower becomes
bankrupt, enters into a composition or makes any arrangement with its creditors,
or is dissolved, liquidated or wound up, the Guarantor shall not claim, rank,
prove or vote as a creditor of the Borrower or its estate in competition with
the Bank in respect of any amounts owing to the Guarantor by the Borrower on any
account whatsoever, but instead shall give the Bank the benefit of any such
proof and of all amounts to be received in respect of that proof until all
Guaranteed Obligations have been fully paid.

         3.6 Appropriation of Moneys. Until all of the Guaranteed Obligations
have been irrevocably paid in full, the Bank (or any trustee, agent or other
person acting on its behalf) may refrain from enforcing any other moneys,
security or rights held or received by the Bank (or such trustee, agent or other
person) in respect of the Guaranteed Obligations, or apply and enforce the same
in such manner and order as it sees fit.

         3.7 Reinstatement. (a) Where any discharge (whether in respect of the
obligations of the Borrower, the Guarantor or any security for those obligations
or otherwise) is made in whole or in part or any arrangement is made on the
faith of any payment, security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without limitation, the
liability of the Guarantor under this Guarantee shall continue or shall be
reinstated (as the case may be) as if such discharge or arrangement had not
occurred.

         (b)      The Bank (or any trustee, agent or other person acting on its
behalf) may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.

         3.8 Additional Security. This Guarantee is in addition to and is not in
any way prejudiced by any collateral or other security now or hereafter held by
the Bank, nor shall such collateral or other security held by the Bank or the
liability of any person for all or any part of the Guaranteed Obligations be in
any manner prejudiced or affected by this Guarantee.

         SECTION 4. INDEMNITY.

         4.1 Indemnity. The Guarantor agrees as a primary obligor and not merely
as a surety, to indemnify and hold harmless the Bank from and against any loss,
cost or damage incurred by the Bank as a result of any obligation of the
Guarantor hereunder as guarantor being or becoming void, voidable, unenforceable
or otherwise ineffective against the Guarantor for any

<PAGE>

reason whatsoever (whether or not known to the Bank or any other Person), the
amount of such loss being limited to the amount that the Bank would have been
entitled to recover from the Guarantor as guarantor pursuant to this Guarantee
had such obligations not become void, voidable, unenforceable or otherwise
ineffective against the Guarantor.

         SECTION 5. REPRESENTATIONS AND WARRANTIES.

         5.1 Representations and Warranties. The Guarantor represents and
warrants to the Bank that as of the date of this Guarantee and on each Draw down
Date:

         (a)      it is a company duly incorporated under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into and
deliver and to perform its obligations under this Guarantee;

         (b)      the execution and delivery by it of this Guarantee and the
performance by it of its obligations hereunder have been duly authorized;

         (c)      it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;

         (d)      neither the execution and delivery by it of this Guarantee nor
the performance by it of its obligations under this Guarantee:

                  (i)      conflicts with or will conflict with or result in any
                           breach of any of the terms, conditions or provisions
                           of, or violate or constitute a default or require any
                           consent under, any indenture, mortgage, agreement or
                           other instrument or arrangement to which it is a
                           party or which binds or purports to be binding upon
                           it; or

                  (ii)     violates or will violate any judgment, decree or
                           order or any statute, rule or regulation or any of
                           the terms or provisions of its Charter;

         (e)      all authorizations required for the execution and delivery of
this Guarantee by it and the performance by it of its obligations hereunder have
been duly obtained or granted and are in full force and effect;

         (f)      it has not requested or taken any security from the Borrower
for any obligation (whether present or future, actual or contingent) of the
Borrower to it; and

         (g)      the representations and warranties set out in this Section 5.1
(Representations and Warranties) will survive the execution of each Financing
Document and each Disbursement under the Financing Documents.

         5.2 Bank's Reliance. The Guarantor acknowledges that it makes the
representations in Section 5.1 (Representations and Warranties) with the
intention of inducing the Bank to enter into this Guarantee and the Financing
Documents and that the Bank enters into this Guarantee and the Financing
Documents on the basis of, and in full reliance on, each of such
representations.

         5.3 Rights and Remedies not Limited. The Bank's rights and remedies in
relation to any misrepresentation or breach of warranty on the part of the
Guarantor are not prejudiced:

<PAGE>

         (a)      by any investigation by or on behalf of the Bank into the
affairs of the Guarantor;

         (b)      by the execution or the performance of this Guarantee; or

         (c)      by any other act or thing which may be done by or on behalf of
the Bank in connection with this Guarantee and which might, apart from this
Section, prejudice such rights or remedies.

         SECTION 6. COVENANTS.

         6.1 Guarantor Covenants. The Guarantor shall:

         (a)      when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank under this
Guarantee including, but not limited to, the execution of any document or
agreement;

         (b)      obtain, maintain and renew when necessary all authorizations
required under any law or document or agreement;

                  (i)      to enable it to perform its obligations under this
                           Guarantee; or

                  (ii)     for the validity or enforceability of the guarantee;

         (c)      not take any action which may impair the ability of the
Borrower to observe and perform all of its covenants, agreements and obligations
under or pursuant to the Financing Documents;

         (d)      take such action as may be necessary or as the Bank may
reasonably request in order to:

                  (i)      comply with its obligations under this Guarantee; and

                  (ii)     cause the Borrower to the extent possible to take
                           such corporate action as may be necessary to comply
                           with its respective obligations under the Financing
                           Documents;

         (e)      the Guarantor shall not take any action which would cause any
of the representations made in Section 5.1 (Representations and Warranties) to
be untrue at any time during the continuation of this Guarantee.

         SECTION 7. MISCELLANEOUS.

         7.1 Notices.

         (a)      All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Guarantor by facsimile (i) shall be promptly
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof by express courier) and faxed or delivered, to the address
or facsimile number

<PAGE>

specified for notices on the applicable signature page hereof or to such other
address as shall be designated by such party in a written notice to the other
parties hereto.

         (b)      All such notices, requests, approvals, consents and
communications (i) sent by express courier will be effective upon delivery to or
refusal to accept delivery by the addressee, and (ii) transmitted by facsimile
will be effective when sent and facsimile confirmation received; except that all
notices and other communications to any Agent shall not be effective until
actually received.

         (c)      The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall not have any liability to the
Guarantor or other Person on account of any action taken or not taken by the
Bank in reliance upon such telephonic or facsimile notice.

         (d)      All notices, requests and other communications hereunder and
under the other Financing Documents shall be in the English language.

         7.2 English Language. This Guarantee and all other Financing Documents
shall be in the English language. Except as otherwise agreed by the parties
hereto, all documents, certificates, reports or notices to be delivered or
communications to be given or made by any party hereto pursuant to the terms of
this Guarantee or any other Financing Document shall be in the English language.

         7.3 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Bank or the holder of any Note in exercising any right, power or privilege
hereunder or under any other Financing Document and no course of dealing between
the Guarantor and the Bank or the holder of any Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Guarantor in any case
shall entitle the Guarantor to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Bank or the
holder of any Note to take any other or further action in any circumstances
without notice or demand. All remedies, either under this Guarantee or any other
Financing Document or pursuant to any applicable Law or otherwise afforded to
the Bank shall be cumulative and not alternative.

         7.4 Governing Law and Jurisdiction. THIS GUARANTEE IS GOVERNED AND
CONSTRUED IN ACCORDACE WITH THE LAW OF THE CAYMAN ISLANDS.

         7.5 Submission.

         (a)      For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of the Cayman Islands are to have
jurisdiction to settle any claims or disputes arising under, out of or in
connection with this Guarantee (including without limitation any claim or
dispute relating to the validity, interpretation, performance, termination or
enforcement of this Guarantee) and that accordingly any suit, action or
proceedings in that respect (together in this Section 7 referred to as
"PROCEEDINGS") may be brought in such courts.

<PAGE>

         (b)      The Guarantor irrevocably waives and agrees not to raise any
objection which it may have now or hereafter to the laying of the venue of any
Proceedings in the courts of the Cayman Islands and any claim that any such
Proceedings have been brought in an inconvenient or inappropriate forum.

         (c)      The Guarantor irrevocably agrees not to take Proceedings in
any court of competent jurisdiction other than the courts of the Cayman Islands,
save with respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take Proceedings against the Guarantor in
any other court of competent jurisdiction, nor shall the taking of Proceedings
in one or more jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.

         7.6 Judgments and Immunity.

         (a)      The Guarantor recognizes and acknowledges that this Guarantee
constitutes a commercial transaction and accordingly it acknowledges and agrees
that it is not entitled to plead, and hereby waives to the fullest extent
permitted by law any right to claim, sovereign immunity for any purpose
whatsoever, including, but not limited to, any right to plead sovereign immunity
in respect of any Proceedings pursuant to this Guarantee.

         (b)      The Guarantor consents generally, in respect of any
Proceedings pursuant to this Guarantee for the purpose of enforcing any order,
judgment or award, to the giving of any relief or the issuing of any process in
connection with such order, judgment or award including, without limitation, the
making, enforcement or execution against any property of any order, judgment or
award and to the extent that the Guarantor may be entitled in any jurisdiction
to claim for itself or its property immunity in respect of its obligations under
this Guarantee from any suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or legal process or to the extent that
in any jurisdiction there may be attributed to itself or its property such
immunity, the Guarantor agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.

         (c)      The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a "JUDGMENT"), that;

                  (i)      the Judgment shall be conclusive and binding upon it;

                  (ii)     it shall be bound by and recognize the Judgment in
                           any jurisdiction;

                  (iii)    to the extent permitted by law, it shall not claim,
                           invoke on its behalf or for its benefit any right it
                           may have under the laws of the Cayman Islands, or any
                           other state or jurisdiction, to prevent, delay,
                           hinder, nullify or in any other way obstruct the
                           enforcement or execution of the Judgment; and

                  (iv)     to the extent permitted by law, it shall not, and
                           shall irrevocably waive any right to, challenge the
                           Judgment on any ground or the enforcement or
                           execution of the Judgment in any jurisdiction (other
                           than by way of appeal in the original jurisdiction).

<PAGE>

         7.7 Benefit of Guarantee. This Guarantee shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. The Guarantor may not assign or
otherwise transfer any of its rights under this Guarantee or any of the other
Financing Documents. The benefit of this Guarantee may be freely and
unconditionally assigned, transferred or otherwise disposed of, in whole or in
part, by the Bank to any other person, corporate or otherwise, to whom the Bank
has assigned all or part of its rights under the Loan Agreement.

         7.8 Expenses. The Guarantor shall be liable to pay to the Bank the
costs and expenses incurred by the Bank in relation to the enforcement or
protection or attempted enforcement or protection of its rights under this
Guarantee, including legal and other professional consultants' fees on a full
indemnity basis.

         7.9 Amendment or Waiver. No provision of this Guarantee may be amended,
supplemented, modified or waived, except by a written instrument signed by the
Bank and the Guarantor.

         7.10 Counterparts. This Guarantee may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

         7.11 Set-off. The Guarantor authorizes the Bank or any of its
subsidiaries and affiliates (which shall not be obliged to exercise this right)
to apply any credit balance to which the Guarantor is entitled on any account of
the Guarantor with the Bank or any of its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank is
authorized to purchase with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such application.

         7.12 Currency Indemnity. If any sum due under this Guarantee or any
order or judgment given or made in relation to this Guarantee has to be
converted from the currency (the "FIRST CURRENCY") in which the same is payable
under this Guarantee or under such order or judgment into another currency (the
"SECOND CURRENCY") for the purpose of (a) making or filing a claim or proof
against the Guarantor, (b) obtaining an order or judgment in any court or other
tribunal or (c) enforcing any order or judgment given or made in relation to
this Guarantee, the Guarantor shall indemnify and hold harmless the Bank from
and against any loss it suffers or incurs as a result of any discrepancy between
(i) the rate of exchange used for such purpose to convert the sum in question
from the first currency into the second currency, and (ii) the rate or rates of
exchange at which the Bank may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.

                                  *     *

<PAGE>

IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
 hereto and is delivered on the date stated at the beginning of this Guarantee.

                                           OCEAN CONVERSION (CAYMAN) LTD.

                                           By: _________________________________
                                               Name:
                                               Title:

                                           Notice Address:
                                           Address:
                                           P.O. Box 1114 GT
                                           Trafalgar House
                                           Grand Cayman, Cayman Islands,
                                           Attention:

                                           Telephone No.: 345 945-4277
                                           Telecopier No. 345 949-2957

                                           SCOTIABANK (CAYMAN)LTD.

                                           By: _________________________________
                                               Name: Mr. Bruce John
                                               Title: Commercial Banking Manager

                                           Notice Address:
                                           Address:
                                           Scotiabank (Cayman Islands) Ltd.
                                           Scotia Centre
                                           Cardinal Avenue
                                           P.O. Box 689
                                           Grand Cayman

                                           Attention: Commercial Banking Manager

                                           Telephone No.: 345 949-7666
                                           Telecopier No. 345 949-5130

<PAGE>

                                  EXHIBIT "II"

                           TERM SHEET FOR FINANCING OF

                         OCEAN CONVERSION (CAYMAN) LTD.

                                       9

<PAGE>

[LOGO OF SCOTIABANK]
SCOTIABANK (CAYMAN ISLANDS) LTD.

Scotia Centre. Cardinal Avenue, P.O. Box 369GT, Grand Cayman, Cayman Islands
Tel: (345) 949-7666       Fax: (345) 949-0020

         February 4, 2003

         "PRIVATE & CONFIDENTIAL"

         Ocean Conversion (Cayman) Ltd.
         P.O. Box 31987 SMB
         Grand Cayman

         Attention: Frederick W.McTaggart

         Dear Sirs,

         We are pleased to confirm that, subject to your acceptance, Scotiabank
         (Cayman Islands) Ltd. (the "Bank") will make available to Ocean
         Conversion (Cayman) Ltd. (the "Borrower") the following credit facility
         on the Terms and Conditions set out below and in Schedule "A" attached
         hereto (collectively called the "Commitment Letter").

         CREDIT AMOUNT:                                          US$2,400,000.00

         TYPE:             Non-Revolving

         BOOKING POINT:    Scotiabank (Cayman Islands) Ltd., George Town,
                           Grand Cayman or other Branch or Affiliate of The Bank
                           of Nova Scotia designated by the Bank.

         PURPOSE:          To payout existing Term Credit at The Bank of N.T.
                           Butterfield & Son used to upgrade and replace
                           existing equipment.

         AVAILMENT:        Subject to satisfaction of all Terms and Conditions,
                           the Borrower may avail the credit by way of a direct
                           advance evidenced by a Demand Promissory Note.

         INTEREST RATE:    The Bank of Nova Scotia's 90 day London Inter Bank
                           Offer Rate (LIBOR) from time to time plus 1.5% per
                           annum with interest, calculated daily and payable
                           quarterly.

         DRAWDOWN:         The loan is to be fully drawn down by March 31, 2003.

         REPAYMENT:        The advance is repayable in 9 equal semi-annual
                           installments of principal (US$240,000), commencing
                           June 30, 2003, with a final payment of US$240,000/the
                           balance of principal and interest then outstanding
                           due December 31, 2007.

                                                        Initials /s/ [ILLEGIBLE]
                                                                 ---------------

<PAGE>

         OCEAN CONVERSION (CAYMAN) LTD.
         FEBRUARY 2003

         PREPAYMENT:       Provided 5 days prior written notice has been given
                           to the Bank, prepayment in multiples of US$100,000
                           minimum, is permitted without penalty, on any
                           quarterly interest payment date. Prepayments are to
                           be applied against principal in the inverse order of
                           maturity.

         GENERAL SECURITY, TERMS AND CONDITIONS APPLICABLE TO ALL CREDITS

         GENERAL SECURITY
         The following security, evidenced by documents in form satisfactory to
         the Bank and registered or recorded as required by the Bank, is to be
         provided prior to any advance being made available under the credit:

            -  All Monies Demand Debenture providing a first fixed and floating
               Charge over all assets of the Borrower stamped to secure
               US$2,400,000.

            -  Assignment of All Perils Insurance (including Hurricane &
               Windstorm) over the Borrower's plant and equipment at all times,
               with Scotiabank (Cayman Islands) Ltd. noted on the policy as loss
               payee.

            -  Guarantee of Consolidated Water Co. Ltd. in the amount of
               US$2,400,000 (with corporate seals and resolutions as
               applicable).

         CONDITIONS PRECEDENT:
         Prior to any advances or availment, the following information is to be
         provided and found acceptable to the Bank:

            -  Copies of the water supply contract/licenses between the Borrower
               and Consolidated Water Co. Ltd. and Water Authority-Cayman are to
               be provided and found acceptable to the Bank.

         GENERAL CONDITIONS:
         Until all debts and liabilities under the credit(s) have been
         discharged in full, the following conditions will apply:

         1.  All Bank accounts and banking services are to be maintained with
             the designated office of the Bank.

         2.  All costs and fees relating to the preparation and registration of
             the security documentation, are for the account of the Borrower.

                                                        Initials /s/ [ILLEGIBLE]
                                                                 ---------------

                                       2

<PAGE>

         OCEAN CONVERSION (CAYMAN) LTD.
         FEBRUARY 2003

         3.  The facility shall be governed by Standard Events of Default for
             transactions of this nature.

         4.  Without the Bank's prior written consent, which consent shall not
             be reasonably withheld, the Borrower shall not:

               a)   Enter into a merger, acquire, or change its line of business

               b)   Enter into any guarantees or other contingent liabilities,
                    or further encumber its assets.

               c)   Make any advances to shareholders and/or affiliates.

               d)   Incur any capital expenditures in excess of US$500,000.00 in
                    any one year (The US$3.2MM plant expansion in Fiscal 2002 is
                    acknowledged).

               e)   Incur any additional Bank debt.

         5.  Ratio of Bank Debt/EBITDA* is not to exceed 2.5:1 at any time.

         6.  Debt Service Coverage Ratio** shall be maintained at a minimum of
             1.2:1.

               *"EBITDA" means, for any Fiscal Year, the Net Income of the
               Borrower for such period plus; (a) to the extent deducted in
               determining such Net Income for such period, the aggregate amount
               of, (i) interest expense (excluding amortization of debt expense
               incurred in connection with the Loans hereunder), (ii) Taxes,
               (iii) depreciation, (iv) amortization and other similar non-cash
               charges, and (v) any extraordinary or other non-recurring
               non-cash loss minus; (b) any extraordinary or other non-recurring
               gain, confirmed by the Financial Statements of the Borrower.

               ** "DEBT SERVICE COVERAGE RATIO" means, for any period, a
               fraction, the numerator of which is; (a) the total revenues of
               the Borrower, but excluding all non-operating and extraordinary
               revenues, less; (b) the aggregate of costs of the Borrower
               comprising, (i) licence fees, (ii) costs of sales, (iii) overhead
               expenses, (iv) insurance costs, (v) taxes, and (vi) all other
               cash operating costs (but excluding financing costs), and of
               which the denominator is the aggregate of, i) scheduled principal
               and interest payments on the Loans, ii) payments under leases for
               equipment or other property leased in connection with the
               ownership and operation of the business of the Borrower, and iii)
               any other payments in respect of any other Indebtedness of the
               Borrower.

                                                        Initials /s/ [ILLEGIBLE]
                                                                 ---------------

                                       3

<PAGE>

         OCEAN CONVERSION (CAYMAN) LTD.
         FEBRUARY 2003

         GENERAL BORROWER REPORTING CONDITIONS
         Until all debts and liabilities under the credit(s) have been
         discharged in full, the Borrower will provide the Bank with the
         following:

         1.  Audited Annual Financial Statements of the Borrower and Guarantor
             is to be provided to the Bank within 120 days of year-end.

         2.  Quarterly in-house financial statements of the Borrower to be
             provided to the Bank within 45 days of each quarter end.

         3.  The facilities shall be subject to periodic and/or annual review by
             the Bank with the next annual review to be conducted upon receipt
             of the reporting noted above or by June 30th latest. The next
             annual review is scheduled for June 30th 2003.

         FEES: An Annual Renewal Fee of US$1,000 is payable annually upon the
         Bank's confirmation that the facilities have been renewed for a further
         one year period.

         APPLICABLE LAW: This Commitment Letter and the Credit Facility noted
         herein are to be governed and construed in accordance with the laws of
         The Cayman Islands.

         If the Terms and Conditions set out in this letter and the attached
         Schedule "A" are acceptable to you, please sign the enclosed copy of
         this letter in the space indicated below, initial the bottom of each
         accompanying page, and return a copy of this letter to the Bank no
         later than the close of business on february 14, 2003. If your
         acceptance is not received by this date, this offer shall lapse.

         Yours truly,

         /s/ D.R.Scott                               /s/ Bruce John
         -------------                               --------------
         D.R.Scott                                   Bruce John
         Senior Account Manager                      Commercial Banking Manager

                                                        Initials /s/ [ILLEGIBLE]
                                                                 ---------------

                                       4

<PAGE>

         OCEAN CONVERSION (CAYMAN) LTD.
         FEBRUARY 2003

         The Terms and Conditions set out above are acknowledged and accepted.

                                              OCEAN CONVERSION (CAYMAN) LTD

                                              /s/ Frederick McTaggart
_________________                             ----------------------------------
Date                                          By: Name & Title  Director
                                                  Frederick McTaggart

_________________                             __________________________________
Date                                          By: Name & Title

                                              GUARANTOR:

                                              Consolidated Water Co. Ltd.

                                              /s/ J.M. Paricer
________________                              ----------------------------------
Date                                          By: Name & Title
                                                  J.M. PARICER, DIRECTOR

________________                              __________________________________
Date                                          By: Name & Title

                                                        Initials /s/ [ILLEGIBLE]
                                                                 ---------------

                                       5

<PAGE>

                                   SCHEDULE A
                         ADDITIONAL TERMS AND CONDITIONS
                            APPLICABLE TO ALL CREDITS

Calculation and Payment of Interest

1.       Interest on loans/advances made in U.S. dollars will be calculated on a
         daily basis and payable monthly on the 22nd day of each month, (unless
         otherwise stipulated by the Bank), interest shall be payable not in
         advance on the basis of a 360-day year for the actual number of days
         elapsed both before and after demand of payment or default and/or
         judgment. The rate of interest based on a 360-day year is equivalent to
         a rate based on a calendar year of 365 days of 365/360 times the rate
         of interest that applies to the U.S. dollar loans/advances.

         Interest on loans/advances made in Cayman Islands dollars will be
         calculated on a daily basis and payable monthly on the 22nd day of each
         month, (unless otherwise stipulated by the Bank). Interest shall be
         payable not in advance on the basis of a 365-day year for the actual
         number of days elapsed both before and after demand of payment or
         default and/or judgment.

Interest on Overdue Interest and Principal

2.       Interest on overdue interest and/or principal shall be calculated at a
         rate per annum equal to the interest rate on the loans/advances in
         respect of which interest and/or principal is overdue plus an
         additional 2% (two percentage points) per annum, but shall be
         compounded monthly and be payable on demand, both before and after
         demand and judgment.

Indemnity Provision

3.       Applicable to (i) Revolving Term Credits with terms in excess of one
         year (ii) any credit where the right to draw down or obtain advances
         exceeds one year, (iii) all U.S. dollar credits. If the introduction
         of, or any change in, or in the interpretation of, or any change in its
         application to the Borrower of, any law or regulation, or compliance
         with any guideline from any central bank or other governmental
         authority (whether or not having the force of law) has the effect of
         increasing the cost to the Bank of performing its obligations hereunder
         or otherwise reducing its effective return hereunder or on its capital
         allocated in support of the credit(s), then upon demand from time to
         time the Borrower shall compensate the Bank for such cost or reduction
         pursuant to a certificate reasonably prepared by the Bank.

         (a)      Prepayment without fee

                  In the event of the Borrower becoming liable for such costs,
                  the Borrower shall have the right to cancel without fee all or
                  any unutilized portion of the affected credit (other than any
                  portion in respect of which the Borrower has requested
                  utilization of the credit in which case cancellation may be
                  effected upon indemnification of the Bank for any costs
                  incurred by the Bank thereby), and to prepay, without fee the
                  outstanding principal balance thereunder other than the face
                  amount of any document of instrument issued or accepted by the
                  Bank for the account of the Borrower, such as a Letter of
                  Credit a Guarantee or a Bankers' Acceptance.

         (b)      Prepayment of Fixed Rate Advances

                  If any prepayment is made, for any reason, of an advance
                  bearing a fixed rate of interest, including without limitation
                  a LIBOR advance, the Borrower shall compensate the Bank for
                  the cost of any early termination of its funding arrangements
                  in accordance with its normal practices, such costs to be
                  notified to the Borrower in a certificate reasonably prepared
                  by the Bank.

Environment

4.       The Borrower agrees:

         (a)      to obey all applicable laws and requirements of any
                  governmental authority relating to the environment and the
                  operation of the business activities of the Borrower.

         (b)      to allow the Bank access at all times to the business premises
                  of the Borrower to monitor and inspect all property and
                  business activities of the Borrower.

         (c)      to notify the Bank from time to time of any business activity
                  conducted by the Borrower which involves the use or handling
                  of hazardous materials or wastes or which increases the
                  environmental liability of the Borrower in any material
                  manner.

                                                                 /s/ [ILLEGIBLE]
                                                                 ---------------

<PAGE>

         (d)      to notify the Bank of any proposed change in the use or
                  occupation of the property of the Borrower prior to any change
                  occurring;

         (e)      to provide the Bank with immediate written notice of any
                  environmental problem and any hazardous materials or
                  substances which have an adverse effect on the property,
                  equipment, or business activities of the Borrower and with any
                  other environmental information requested by the Bank from
                  time to time.

         (f)      to conduct all environmental remedial activities which a
                  commercially reasonable person would perform in similar
                  circumstances to meet its environmental responsibilities and
                  if the Borrower falls to do so, the Bank may perform such
                  activities; and

         (g)      to pay for any environmental investigations, assessments or
                  remedial activities with respect to any property of the
                  Borrower that may be performed for or by the Bank from time to
                  time.

         If the Borrower notifies the Bank of any specified activity or change
         or provides the Bank with any information pursuant to subsections 4(c),
         (d), or (e), or if the Bank receives any environmental information from
         other sources, the Bank, in its sole discretion, may decide that an
         adverse change in the environmental condition of the Borrower or any of
         the property, equipment, or business activities of the Borrower has
         occurred which decision will constitute, in the absence of manifest
         error, conclusive evidence of the adverse change, Following this
         decision being made by the Bank, the Bank shall notify the Borrower of
         the Bank's decision concerning the adverse change.

         If the Bank decides or is required to incur expenses in compliance or
         to verify the Borrower's compliance with applicable environmental or
         other regulations, the Borrower shall indemnify the Bank in respect of
         such expenses, which will constitute further advances by the Bank to
         the Borrower under this Agreement.

Drawdown

5.       The right to the Borrower to obtain the drawdown under the Credit(s) is
         subject to the condition precedent that there shall not have been any
         material adverse changes in the financial condition or the
         environmental condition of the Borrower or any guarantor of the
         Borrower.

Periodic Review

6.       The obligation of the Bank to make further advances or other
         accommodation available under any Credit(s) of the Borrower under which
         the indebtedness or liability of the Borrower is payable on demand, is
         subject to periodic review and to no adverse change occurring in the
         financial condition or the environmental condition of the Borrower or
         any guarantor.

Evidence of Indebtedness

7.       The Bank's accounts, books and records constitute, in the absence of
         manifest error, conclusive evidence of the advances made under this
         Credit repayments on account thereof and the indebtedness of the
         Borrower to the Bank.

Acceleration

8.       (a)      All indebtedness and liability of the Borrower to the Bank
                  payable on demand, is repayable by the Borrower to the Bank at
                  any time on demand:

         (b)      All indebtedness and liability of the Borrower to the Bank not
                  payable on demand, shall, at the option of the Bank, become
                  immediately due and payable, the security held by the Bank
                  shall immediately become enforceable, and the obligation of
                  the Bank to make further advances or other accommodation
                  available under the Credits shall terminate, if any one of the
                  following Events of Default occurs:

                  (1)      The Borrower or any guarantor fails to make when due,
                           whether on demand or at a fixed payment date, by
                           acceleration or otherwise, any payment of interest,
                           principal, fees, commissions or other amounts payable
                           to the Bank.

                  (2)      There is a breach by the Borrower of any other term
                           or condition contained in this

                                                                 /s/ [ILLEGIBLE]
                                                                 ---------------

<PAGE>

                           Commitment Letter or in any other agreement to which
                           the Borrower and the Bank are parties;

                  (3)      Any default occurs under any security listed in this
                           Commitment Letter under the headings "Specific
                           Security" or "General Security" or under any other
                           credit, loan or security agreement to which the
                           Borrower is a party;

                  (4)      Any bankruptcy, re-organization, compromise,
                           arrangement, insolvency or liquidation proceedings or
                           other proceedings for the relief of debtors are
                           instituted by or against the Borrower and, if
                           instituted against the Borrower, are allowed against
                           or consented to by the Borrower or are not dismissed
                           or stayed within 60 days after such institution;

                  (5)      A receiver is appointed over any property of the
                           Borrower or any judgment or order or any process of
                           any court becomes enforceable against the Borrower or
                           any property of the Borrower or any creditor takes
                           possession of any property of the Borrower;

                  (6)      Any adverse change occurs in the financial condition
                           of the Borrower or any guarantor:

                  (7)      Any adverse change occurs in the environmental
                           condition of:

                           (A) The Borrower or any guarantor of the Borrower; or

                           (B) Any property, equipment, or business activities
                               of the Borrower or any guarantor of the Borrower.

Costs

9.       All costs, including legal and specialist fees incurred by the Bank
         relative to security and other documentation, shall be for the account
         of the Borrower and may be charged to the Borrower's deposit account
         when submitted.

Fees

10.      The Bank's standard administrative fees, as amended from time to time,
         shall apply for all deposit and loan accounts. These shall include, but
         are not limited to:

<TABLE>
<CAPTION>
                                                             Minimum Payment
                                                             ---------------
<S>                                                      <C>
- - Late payment fee on Non-Revolving                      CI$100 per payment
  loan payments.

- - Follow up for receipt of delinquent                    CI$100 per item per month
  reporting information.

- - Payment of cheques into unauthorized                   CI$25 per item
  overdraft on deposit accounts.
</TABLE>

         The Bank shall have the right to increase these fees, and/or charge
         special administrative fees if, in the Bank's discretion, unusual or
         excessive time or affort is required in administering the Borrower's
         accounts.

Taxes

11.      All payments by the Borrower of principal of, and interest on, the
         Loans and all other amounts payable hereunder shall be made free and
         clear of and without deduction for any present or future income,
         excise, stamp or franchise taxes and other taxes, fees, duties,
         withholdings or other charges of any nature whatsoever imposed by any
         taxing authority.

                                                                 /s/ [ILLEGIBLE]
                                                                 ---------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.39
<SEQUENCE>19
<FILENAME>g80228exv10w39.txt
<DESCRIPTION>IRREVOCABLE UNDERTAKING
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.39

THIS IRREVOCABLE UNDERTAKING (the "Undertaking") is given on the 7th day of
February, 2003, by:

CONSOLIDATED WATER CO. LTD., a corporation incorporated under the laws of the
Cayman Islands, (hereinafter referred to as the "Borrower")

To:

SCOTIABANK (CAYMAN ISLANDS) LTD., a banking corporation incorporated and
licensed pursuant to the laws of the Cayman Islands (hereinafter referred to as
the "Bank")

WHEREAS:

         (a)      Pursuant to a loan agreement executed between the Borrower and
                  the Bank dated the 7th day of February, 2003 (the "Loan
                  Agreement") the Bank has agreed to make certain loan
                  facilities available to the Borrower for certain specified
                  purposes including the financing of the Acquisition;

         (b)      In consideration of the Bank making available to the Borrower
                  the financing for the Acquisition the Borrower has agreed to
                  provide the Bank with various security instruments including
                  this Undertaking; and

         (c)      The Borrower has irrevocably agreed, pursuant to this
                  Undertaking, that upon acquiring Control as defined herein,
                  the Borrower shall ensure that the board of directors take the
                  actions, and execute the documents, called for herein.

NOW THEREFORE the Borrower provides the following irrevocable undertaking to the
Bank:

                                   SECTION 1

                    DEFINITIONS AND RULES OF INTERPERTATIONS

1.1      Unless specifically defined herein, capitalized terms used in this
         Undertaking shall have the meanings specified in Annex "A" to the Loan
         Agreement.

1.2      In addition, wherever used in this Undertaking the following terms have
         the meanings opposite them:

         "BOARD OF DIRECTORS" means, the board of directors of the Company;

         "COMPANY" means, Waterfields Company Limited;

<PAGE>

         "CONTROL" means, the purchase of the Shares which shall provide the
         Borrower with the ability to elect to the Board of Directors, a
         majority of such directors;

         "DIRECTORS" means, those members of the Board of Directors, which have
         been elected to the Board of Directors by the Borrower exercising its
         voting rights accordingly;

         "GUARANTEE" means, the Guarantee attached hereto as Exhibit "I";

         "OPINION" means, a legal opinion issued by the Company's Bahamian legal
         counsel in usual and customary format, reasonably satisfactory to the
         Bank, as to, amongst other things, the validity and enforceability of
         the Guarantee;

         "PLEDGE" means, the charge of Shares attached hereto as Exhibit "II";
         and

         "SHARES" means, the shareholdings acquired by the Borrower in the
         Company.

                                   SECTION 2

2.1      The Borrower hereby irrevocably and unconditionally undertakes that:

         (a)      The proceeds of the Acquisition or Bridge Loans shall be used
                  to purchase the Shares;

         (b)      Once acquired, the Shares shall be pledged, pursuant to the
                  terms of the Pledge, to the Bank as additional security for
                  all amounts outstanding under the Loan Agreement;

         (c)      Upon completion of the acquisition of the Shares, the Borrower
                  shall have the ability to exert control over the Company
                  either through Control of the Board of Directors or through
                  the voting of the Borrower's Shares;

         (d)      Once the Shares have been acquired, that the Borrower shall
                  exercise the franchise attached to such Shares in order to
                  elect the Directors;

         (e)      Once the Shares have been acquired the Company shall either:
                  (i) obtain the approval of all of its existing creditors whose
                  approval is necessary in order to issue the Guarantee in
                  favour of the Bank; or (ii) shall conclude negotiations with
                  the Bank, on mutually agreeable terms, in order to obtain from
                  the Bank the financing necessary to repay the debt of any
                  existing creditor who does not consent to the issuance of the
                  Guarantee, so that the Borrower may proceed to issue the
                  Guarantee;

         (f)      Once the Shares have been acquired the Company shall issue the
                  Guarantee and the Company shall cause the issuance of the
                  Opinion;

                                       2

<PAGE>

         (g)      Once the Shares have been acquired the Company shall remain
                  under the control of the Borrower; and

         (h)      Once the Shares have been acquired it shall not permit to
                  exist any mortgage, charge, lien or any other form of security
                  interest over the Shares, other than the security interest
                  contemplated in the Security Documents.

                                   SECTION 4

                                    DEFAULT

4.1      Failure by: (i) the Borrower, (ii) the Board of Directors; or (iii) the
         Company to comply in a timely manner with any term, condition,
         requirement or obligation contained in this Undertaking shall
         constitute an Event of Default pursuant to Section 17.1(q) of the Loan
         Agreement and the Bank shall be entitled to exercise any remedy
         available to it under the Loan Agreement, the Security Documents or at
         law or equity.

4.2      Failure by the Company to issue in favour of the Bank the Guarantee and
         the Opinion within the nine (9) month anniversary of the date of
         execution of the Loan Agreement shall constitute a breach of this
         Undertaking and an Event of Default pursuant to Section 17.1(q) of the
         Loan Agreement.

                                   SECTION 5

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

5.1      The Borrower hereby represents and warrants that:

         (a)      It is a corporation, organized, existing and a good standing
                  under the laws of the Cayman Islands;

         (b)      The execution, delivery and performance by the Borrower of
                  this Undertaking and the obligations contained herein are
                  within its corporate powers, have been duly authorized by all
                  necessary corporate action, and do not contravene (i) its
                  Memorandum or Articles of Association; or (ii) any law or any
                  contractual restriction binding on or effecting it or its
                  property, and is enforceable against it in accordance with the
                  terms of this Undertaking;

         (c)      No authorization or approval or other action by, or no notice
                  to or filing with, any Government Authority or other
                  regulatory body is required for the due execution, delivery
                  and performance by the Borrower of this Undertaking;

                                       3

<PAGE>

         (d)      No event has occurred which constitutes, or which with the
                  giving of notice or the lapse of time or relevant
                  determination, or any combination thereof, would constitute a
                  contravention of, or default under, any agreement or
                  instrument by which it or any of its assets is bound or
                  effected, and which has, or could be regarded as having, a
                  Material Adverse Effect on its ability to observe or perform
                  any of its obligation under this Undertaking;

         (e)      No litigation, arbitration or administrative proceeding or
                  claim which might itself or together with any other such
                  proceeding or claim have a Material Adverse Effect on its
                  ability to observe or perform its obligation under this
                  Undertaking, is presently in progress or pending, or to the
                  best of the knowledge, information and belief of it,
                  threatened against it, or any of its assets;

         (f)      It has not taken any action, nor has any steps been taken by
                  or against or with reference to it for the winding-up,
                  disillusioned, bankruptcy or reorganization of it, or for the
                  appointment of a receiver, trustee or similar officer of it
                  with respect to any or all of its assets or revenues;

         (g)      There are no current liabilities or contingent liabilities,
                  other than those which are owed to the Bank, which would have
                  a Material Adverse Effect on the Borrower;

         (h)      The execution and performance of this Undertaking by the
                  Borrower will not violate any judgement, order decree or
                  statute; and

         (i)      That the Shares acquired pursuant to the Acquisition shall
                  provide the Borrower with effective Control of the Company.

                                   SECTION 6

                           TERMINATION OF UNDERTAKING

         This Undertaking and the obligations contained herein shall remain in
         place until the earlier of: (i) all of the conditions in this
         Undertaking have been fulfilled; (ii) all amounts owed to the Bank
         pursuant to the Loan Agreement have been repaid in full.

                                   SECTION 7

                                 MISCELLANEOUS

7.1      NO WAIVERS: REMEDIES CUMULATIVE

         (a)      No failure or delay on the part of the Bank in exercising any
                  right, power or privilege hereunder or under the Loan
                  Agreement and other Security Documents and no

                                       4

<PAGE>

                  course of dealing between the Borrower and the Bank shall
                  operate as a waiver thereof; nor shall any single or partial
                  exercise of any right, power or privilege hereunder preclude
                  any other or further exercise thereof or the exercise of any
                  other right, power or privilege.

         (b)      The rights and remedies herein expressly provided are
                  cumulative and not exclusive of any rights or remedies which
                  the Bank would otherwise have in law.

7.2      COSTS AND EXPENSES

         The Borrower hereby covenants with the Bank to keep the Bank fully and
         effectively, indemnified against all legal and other costs charges and
         expenses from time to time incurred by the Bank in connection with the
         enforcement this Undertaking and to pay the same on demand in writing
         from the Bank.

7.3      ASSIGNMENT: FUTURE RIGHTS

         (a)      The Bank shall be entitled to assign its benefit under this
                  Undertaking or any part thereof to any person.

         (b)      This Undertaking may not be assigned or transferred, in whole
                  or in part, by the Borrower without the written consent of the
                  Bank, which consent the Bank may in its sole discretion refuse
                  to provide.

7.4      NOTICES

All notices, requests, consents, demands, directions, agreements or other
instruments or communications between the Bank and the Borrower required to be
given hereunder shall be in writing and shall be; (a) sent by private courier
service, next day delivery, or by telefax, or other similar form of rapid
transmission, confirmed by sending (by private courier service, next day
delivery) written confirmation; or (b) personally delivered to the receiving
party or, if not an individual, to an officer or general partner of the
receiving party. All such communications shall be sent or delivered addressed as
follows:

         If to the Borrower:

         Consolidated Water Co. Ltd.
         P.O.Box 1114 GT
         Trafalgar House
         Grand Cayman, Cayman Islands.

         Attn: Mr. Jeffrey Parker
         Telephone No: 345-945-4277
         Fax No: 345-949-2957

         If to the Bank:

                                       5

<PAGE>

         Scotiabank (Cayman Islands) Ltd.
         Scotia Centre,
         Cardinal Avenue,
         P.O.Box 689,
         Grand Cayman.

         Attn: Commercial Banking Manager

         Telephone: 345-949-7666
         Fax: 345-949-5130

         Any party hereto may, by notice given hereunder, designate any further
         or different addresses to which subsequent notices, requests or other
         communications shall be sent. All such notices and other communications
         shall be effective when received.

7.5      APPLICABLE LAW & JURISDICTION

         (a)      This Undertaking shall be construed and enforced in accordance
                  with, and governed by, the laws of the Cayman Islands.

         (b)      The parties hereto irrevocably submit to the jurisdiction of
                  the courts of the Cayman Islands.

         (c)      The submission to the jurisdiction of the courts of the Cayman
                  Islands shall not (and shall not be construed so as to) limit
                  the right of the Bank to take proceedings against the Borrower
                  in any other court of competent jurisdiction, nor shall the
                  taking of proceedings in any one or more jurisdictions
                  preclude the taking of proceedings in any other jurisdiction,
                  whether concurrently or not.

                 REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK

                                       6

<PAGE>

IN WITNESS WHEREOF this Undertaking has been executed on the date first written
above.

                                            CONSOLIDATED WATER CO. LTD.

                                            By: /s/ Frederick W. McTaggart
                                                --------------------------------
                                                      Authorized Signatory

                                       SCOTIABANK (CAYMAN ISLANDS) LTD.

                                            By: /s/ [ILLEGIBLE]
                                                --------------------------------
                                                      Authorized Signatory

                                       7

<PAGE>

                                  EXHIBIT "I"

                      FORM OF GUARANTEE TO BE PROVIDED BY

                           WATERFIELDS COMPANY LIMITED

                                       8

<PAGE>

================================================================================

                                   GUARANTEE

                                       by

                          WATERFIELDS COMPANY LIMITED

                                  IN FAVOUR OF

                        SCOTIABANK (CAYMAN ISLANDS) LTD.

                        Dated the ___ day of______, 2003

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                            <C>
SECTION 1. DEFINITIONS AND INTERPRETATION .................................     2
         1.1 General Definitions ..........................................     2
         1.2 Interpretation ...............................................     3
SECTION 2. GUARANTEE ......................................................     3
         2.1 Guarantor Guaranteed Obligations .............................     3
         2.2 Continuing Guarantee .........................................     3
         2.3 Payment of Guaranteed Obligations ............................     4
         2.4 No Set-off ...................................................     4
         2.5 Taxes ........................................................     4
         2.6 Application of Payments ......................................     4
SECTION 3. SAVING PROVISIONS ..............................................     5
         3.1 Change in Guaranteed Obligations .............................     5
         3.2 Waiver of Defenses ...........................................     5
         3.3 Immediate Recourse ...........................................     6
         3.4 Non-Competition ..............................................     6
         3.5 Bankruptcy or Liquidation of the Borrower ....................     6
         3.6 Appropriation of Moneys ......................................     6
         3.7 Reinstatement ................................................     7
         3.8 Additional Security ..........................................     7
SECTION 4. INDEMNITY ......................................................     7
         4.1 Indemnity ....................................................     7
SECTION 5. REPRESENTATIONS AND WARRANTIES .................................     7
         5.1 Representations and Warranties ...............................     7
         5.2 Bank's Reliance ..............................................     8
         5.3 Rights and Remedies not Limited ..............................     8
SECTION 6. COVENANTS ......................................................     8
         6.1 Guarantor Covenants ..........................................     8
SECTION 7. MISCELLANEOUS ..................................................     9
         7.1 Notices ......................................................     9
         7.2 English Language .............................................    10
         7.3 No Waiver; Remedies Cumulative ...............................    10
         7.4 Governing Law and Jurisdiction ...............................    10
         7.5 Submission ...................................................    10
         7.6 Judgments and Immunity .......................................    11
         7.7 Benefit of Guarantee .........................................    11
         7.8 Expenses .....................................................    12
         7.9 Amendment or Waiver ..........................................    12
         7.10 Counterparts ................................................    12
         7.11 Set-off .....................................................    12
         7.12 Currency Indemnity ..........................................    12
</TABLE>

<PAGE>

         THIS GUARANTEE ("GUARANTEE"), dated the ___ day of _____, 2003, is made
as a deed by:

(1)      WATERFIELDS COMPANY LIMITED, a company organized and existing under the
laws of Bahamas ("GUARANTOR");

in favour of

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").

Defined terms used herein shall have the meanings specified in Section 1.

         WHEREAS:

         (A)      Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").

         (B)      It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.

         (C)      The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.

         (D)      To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.

         (E)      The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. DEFINITIONS AND INTERPRETATION.

         1.1 General Definitions.

         (a)      Unless the context otherwise requires, capitalized terms used
                  in this Guarantee without definition have the meanings
                  specified in Annex A to the Loan Agreement.

         (b)      In addition, wherever used in this Guarantee, unless the
context otherwise requires, the following terms have the meaning opposite it:

         "FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

         "GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Financing Documents, and in any
capacity, irrespective of whether such liabilities and obligations:

<PAGE>

                                    (i)      are present or future;

                                    (ii)     are actual, contingent or
                                             otherwise;

                                    (iii)    are at any time ascertained or
                                             unascertained;

                                    (iv)     are owed or incurred by or on
                                             account of the Borrower alone, or
                                             severally or jointly with any other
                                             person;

                                    (v)      are owed or incurred as principal,
                                             interest, fees, charges, taxes,
                                             duties or other imports, damages
                                             (whether for breach of contract or
                                             tort or incurred on any other
                                             ground), losses, costs or expenses,
                                             or on any other account; or

                                    (vi)     comprise any combination of the
                                             above.

         provided that the Guaranteed Obligations shall be limited to the lesser
of: (i) the total amount outstanding under the Financing Documents; and (ii) the
maximum amount of indebtedness and liability of the Borrower that the Guarantor
is able to guarantee and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.

         1.2 Interpretation.

         The rules of interpretation set forth in Section 18.13 of the Loan
Agreement shall apply to this Guarantee.

         SECTION 2. GUARANTEE.

         2.1 Guarantor Guaranteed Obligations.

         The Guarantor irrevocably and absolutely, as principal obligor and not
merely as surety, guarantees and promises to pay, upon demand of the Bank, the
Guaranteed Obligations not paid or performed by the Borrower when due in the
same manner in all respects as the Guaranteed Obligations are required to be
paid or performed by the Borrower.

         2.2 Continuing Guarantee.

         (a) The guarantee and the indemnity of the Guarantor contained in this
Guarantee is a continuing obligation of the Guarantor (and all liabilities to
which it applies or may apply under the terms of this Guarantee shall be
conclusively presumed to have been created in reliance on such guarantee),
notwithstanding any settlement of account or the occurrence of any other thing,
and shall remain in full force and effect until:

                  (i)      the Guaranteed Obligations have been fully paid or
                           performed strictly in accordance with the provisions
                           of the Financing Documents, regardless of any
                           intermediate payment or discharge in whole or in
                           part; and

<PAGE>

                  (ii)     all of the obligations of the Guarantor under this
                           Guarantee have been fully performed in accordance
                           with this Guarantee.

         (b)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall be additional, separate and independent obligations of the
Guarantor.

         (c)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall survive the termination of the Financing Documents.

         (d)      The Guarantor's obligations under this Guarantee can be
discharged only by performance and then only to the extent of such performance.
Those obligations are not subject to any prior notice to, demand upon or action
against the Borrower or any other Person or to any prior notice to the Guarantor
of any default by the Borrower.

         2.3 Payment of Guaranteed Obligations.

         The Guarantor shall make payment of the Guaranteed Obligations under
Section 2.1 (Guarantor Guaranteed Obligations) as provided in the relevant
Financing Documents.

         2.4 No Set-off.

         All payments which the Guarantor is required to make under this
Guarantee shall be without any set-off, counterclaim or condition.

         2.5 Taxes.

         (a) The Guarantor shall pay or cause to be paid all present and future
taxes, duties, fees and other charges of whatsoever nature (excluding income
taxes), if any, now or in the future levied or imposed by any Governmental
Authority or similar body in the jurisdiction in which the Guarantor is located
or out of which a payment is made on or in connection with the payment of any
and all amounts due under this Guarantee.

         (b)      All payments due under this Guarantee shall be made without
deduction for or on account of any such taxes, duties, fees or other charges.

         (c)      If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made such payments without deduction, the amounts
due under this Guarantee shall be increased to such amount as may be necessary
so that the Bank receives the full amount it would have received (taking into
account any such taxes, duties, fees or other charges payable on amounts payable
by the Guarantor under this subsection) had such payments been made without such
deduction.

         (d)      If subsection (c) above applies and the Bank so requires, the
Guarantor shall deliver to the Bank official tax receipts evidencing payment (or
certified copies of them) within thirty (30) days of the date of payment.

         2.6 Application of Payments.

         The Bank may apply any amounts received by it or recovered under:

         (a)      any Security Document; and

<PAGE>

         (b)      any other document or agreement which is a security for any of
the Guaranteed Obligations and any other moneys,

in such manner as it determines in its absolute discretion in accordance with
the Financing Documents.

         SECTION 3. SAVING PROVISIONS.

         3.1 Change in Guaranteed Obligations.

         The obligations of the Guarantor under this Guarantee shall extend to
any change in the Guaranteed Obligations:

         (a)      as a result of any amendment, supplement, renewal or
replacement of any Financing Document or the occurrence of any other thing; and

         (b)      regardless of whether the Guarantor is aware of, has consented
to or is given notice of any alteration, variation, amendment, supplement,
renewal or replacement of any Financing Document or the occurrence of such other
thing.

         3.2 Waiver of Defenses.

         Except for payment or performance in full of the Guaranteed
Obligations, the payment in full by the Guarantor of its obligations under this
Guarantee or otherwise as provided in this Guarantee, the Guarantor's
obligations under this Guarantee shall not be discharged, impaired or otherwise
adversely affected by any act, omission, circumstance, matter or thing which,
but for this provision, would reduce, release or prejudice any of its
obligations under this Guarantee or which might otherwise constitute a legal or
equitable discharge or defense of a surety or a guarantor, including (whether or
not known to the Guarantor or the Borrower):

         (a)      any time, waiver, composition, forbearance or concession given
to the Borrower or any other person;

         (b)      any assertion of, or failure to assert, or delay in asserting,
any right, power or remedy against the Borrower or any other person, or in
respect of any security for the Loans;

         (c)      any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Financing Document or of any other
agreement or security between the Bank and the Borrower;

         (d)      any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order;

         (e)      the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;

         (f)      any purported or actual assignment, transfer, novation or
disposal of, or granting any participation in, any of the Loans to any other
party;

         (g)      any Financing Document being in whole or in part illegal,
void, voidable, avoided, invalid, unenforceable or otherwise of limited force
and effect; or

<PAGE>

         (h)      any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
in respect of the Guaranteed Obligations or any of them.

         3.3 Immediate Recourse.

         The Guarantor waives any right it may have of first requiring the Bank
(or any trustee, agent or other person acting on its behalf) to proceed against
or enforce any other rights or security or claim payment from any person before
claiming from the Guarantor under this Guarantee.

         3.4 Non-Competition.

         (a)      If any amounts have become payable or have been paid by the
Guarantor under this Guarantee, the Guarantor shall not, in respect of such
moneys, seek to enforce repayment, obtain the benefit of any security or
exercise any other rights or legal remedies of any kind which may accrue to the
Guarantor against the Borrower, whether by way of subrogation, offset,
counterclaim or otherwise, in respect of the amount so payable or so paid (or in
respect of any other moneys for the time being due to the Guarantor from the
Borrower), if and for so long as any moneys remain outstanding to the Bank under
the Financing Documents. The Guarantor shall hold in trust for, and forthwith
pay or transfer to, the Bank any payment or distribution or benefit of security
received by it contrary to this Section 3.4(a).

         (b)      Upon the payment and satisfaction in full of all Guaranteed
Obligations and provided that no amounts (actual or contingent) remain
outstanding to the Bank under the Loan Agreement, the Guarantor, if it has made
a payment under this Guarantee, shall be entitled to exercise its rights of
subrogation to its proportion of all relevant rights of the Bank against the
Borrower pursuant to the Financing Documents. The Bank shall promptly execute,
at the expense of the Guarantor, an assignment and such other documents in such
form as the Guarantor may reasonably request to transfer such proportion of such
rights of the Bank against the Borrower to the Guarantor as are required for the
Guarantor to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not in the
name of the Bank.

         3.5 Bankruptcy or Liquidation of the Borrower.

         If the Borrower becomes bankrupt, enters into a composition or makes
any arrangement with its creditors, or is dissolved, liquidated or wound up, the
Guarantor shall not claim, rank, prove or vote as a creditor of the Borrower or
its estate in competition with the Bank in respect of any amounts owing to the
Guarantor by the Borrower on any account whatsoever, but instead shall give the
Bank the benefit of any such proof and of all amounts to be received in respect
of that proof until all Guaranteed Obligations have been fully paid.

         3.6 Appropriation of Moneys.

         Until all of the Guaranteed Obligations have been irrevocably paid in
full, the Bank (or any trustee, agent or other person acting on its behalf) may
refrain from enforcing any other moneys, security or rights held or received by
the Bank (or such trustee, agent or other person) in respect of the Guaranteed
Obligations, or apply and enforce the same in such manner and order as it sees
fit.

<PAGE>

         3.7 Reinstatement.

         (a)      Where any discharge (whether in respect of the obligations of
the Borrower, the Guarantor or any security for those obligations or otherwise)
is made in whole or in part or any arrangement is made on the faith of any
payment, security or other disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation, the liability of the
Guarantor under this Guarantee shall continue or shall be reinstated (as the
case may be) as if such discharge or arrangement had not occurred.

         (b)      The Bank (or any trustee, agent or other person acting on its
behalf) may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.

         3.8 Additional Security.

         This Guarantee is in addition to and is not in any way prejudiced by
any collateral or other security now or hereafter held by the Bank, nor shall
such collateral or other security held by the Bank or the liability of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Guarantee.

         SECTION 4. INDEMNITY.

         4.1 Indemnity.

         The Guarantor agrees as a primary obligor and not merely as a surety,
to indemnify and hold harmless the Bank from and against any loss, cost or
damage incurred by the Bank as a result of any obligation of the Guarantor
hereunder as guarantor being or becoming void, voidable, unenforceable or
otherwise ineffective against the Guarantor for any reason whatsoever (whether
or not known to the Bank or any other Person), the amount of such loss being
limited to the amount that the Bank would have been entitled to recover from the
Guarantor as guarantor pursuant to this Guarantee had such obligations not
become void, voidable, unenforceable or otherwise ineffective against the
Guarantor.

         SECTION 5. REPRESENTATIONS AND WARRANTIES.

         5.1 Representations and Warranties.

         The Guarantor represents and warrants to the Bank that as of the date
of this Guarantee and on each Drawdown Date:

         (a)      it is a company duly incorporated under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into and
deliver and to perform its obligations under this Guarantee;

         (b)      the execution and delivery by it of this Guarantee and the
performance by it of its obligations hereunder have been duly authorized;

         (c)      it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;

<PAGE>

         (d)      neither the execution and delivery by it of this Guarantee nor
the performance by it of its obligations under this Guarantee:

                  (i)      conflicts with or will conflict with or result in any
                           breach of any of the terms, conditions or provisions
                           of, or violate or constitute a default or require any
                           consent under, any indenture, mortgage, agreement or
                           other instrument or arrangement to which it is a
                           party or which binds or purports to be binding upon
                           it; or

                  (ii)     violates or will violate any judgment, decree or
                           order or any statute, rule or regulation or any of
                           the terms or provisions of its Charter;

         (e)      all authorizations required for the execution and delivery of
this Guarantee by it and the performance by it of its obligations hereunder have
been duly obtained or granted and are in full force and effect;

         (f)      it has not requested or taken any security from the Borrower
for any obligation (whether present or future, actual or contingent) of the
Borrower to it; and

         (g)      the representations and warranties set out in this Section 5.1
(Representations and Warranties) will survive the execution of each Financing
Document and each Disbursement under the Financing Documents.

         5.2 Bank's Reliance.

         The Guarantor acknowledges that it makes the representations in Section
5.1 (Representations and Warranties) with the intention of inducing the Bank to
enter into this Guarantee and the Financing Documents and that the Bank enters
into this Guarantee and the Financing Documents on the basis of, and in full
reliance on, each of such representations.

         5.3 Rights and Remedies not Limited.

         The Bank's rights and remedies in relation to any misrepresentation or
breach of warranty on the part of the Guarantor are not prejudiced:

         (a)      by any investigation by or on behalf of the Bank into the
affairs of the Guarantor;

         (b)      by the execution or the performance of this Guarantee; or

         (c)      by any other act or thing which may be done by or on behalf of
the Bank in connection with this Guarantee and which might, apart from this
Section, prejudice such rights or remedies.

         SECTION 6. COVENANTS.

         6.1 Guarantor Covenants.

                  The Guarantor shall:

<PAGE>

         (a)      when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank under this
Guarantee including, but not limited to, the execution of any document or
agreement;

         (b)      obtain, maintain and renew when necessary all authorizations
required under any law or document or agreement;

                  (i)      to enable it to perform its obligations under this
                           Guarantee; or

                  (ii)     for the validity or enforceability of the guarantee;

         (c)      not take any action which may impair the ability of the
Borrower to observe and perform all of its covenants, agreements and obligations
under or pursuant to the Financing Documents;

         (d)      take such action as may be necessary or as the Bank may
reasonably request in order to:

                  (i)      comply with its obligations under this Guarantee; and

                  (ii)     cause the Borrower to the extent possible to take
                           such corporate action as may be necessary to comply
                           with its respective obligations under the Financing
                           Documents;

         (e)      the Guarantor shall not take any action which would cause any
of the representations made in Section 5.1 (Representations and Warranties) to
be untrue at any time during the continuation of this Guarantee.

         SECTION 7. MISCELLANEOUS.

         7.1 Notices.

         (a)      All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Guarantor by facsimile (i) shall be promptly
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof by express courier) and faxed or delivered, to the address
or facsimile number specified for notices on the applicable signature page
hereof or to such other address as shall be designated by such party in a
written notice to the other parties hereto.

         (b)      All such notices, requests, approvals, consents and
communications (i) sent by express courier will be effective upon delivery to or
refusal to accept delivery by the addressee, and (ii) transmitted by facsimile
will be effective when sent and facsimile confirmation received; except that all
notices and other communications to any Agent shall not be effective until
actually received.

         (c)      The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall

<PAGE>

not have any liability to the Guarantor or other Person on account of any action
taken or not taken by the Bank in reliance upon such telephonic or facsimile
notice.

         (d)      All notices, requests and other communications hereunder and
under the other Financing Documents shall be in the English language.

         7.2 English Language.

         This Guarantee and all other Financing Documents shall be in the
English language. Except as otherwise agreed by the parties hereto, all
documents, certificates, reports or notices to be delivered or communications to
be given or made by any party hereto pursuant to the terms of this Guarantee or
any other Financing Document shall be in the English language.

         7.3 No Waiver; Remedies Cumulative.

         No failure or delay on the part of the Bank or the holder of any Note
in exercising any right, power or privilege hereunder or under any other
Financing Document and no course of dealing between the Guarantor and the Bank
or the holder of any Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Financing Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder or thereunder. No
notice to or demand on the Guarantor in any case shall entitle the Guarantor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank or the holder of any Note to take
any other or further action in any circumstances without notice or demand. All
remedies, either under this Guarantee or any other Financing Document or
pursuant to any applicable Law or otherwise afforded to the Bank shall be
cumulative and not alternative.

         7.4 Governing Law and Jurisdiction.

         THIS GUARANTEE IS GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
BAHAMAS.

         7.5 Submission.

         (a)      For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of the Bahamas are to have jurisdiction to
settle any claims or disputes arising under, out of or in connection with this
Guarantee (including without limitation any claim or dispute relating to the
validity, interpretation, performance, termination or enforcement of this
Guarantee) and that accordingly any suit, action or proceedings in that respect
(together in this Section 7 referred to as "PROCEEDINGS") may be brought in such
courts.

         (b)      The Guarantor irrevocably waives and agrees not to raise any
objection which it may have now or hereafter to the laying of the venue of any
Proceedings in the courts of Bahamas and any claim that any such Proceedings
have been brought in an inconvenient or inappropriate forum.

         (c)      The Guarantor irrevocably agrees not to take Proceedings in
any court of competent jurisdiction other than the courts of the Bahamas, save
with respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take

<PAGE>

Proceedings against the Guarantor in any other court of competent jurisdiction,
nor shall the taking of Proceedings in one or more jurisdictions preclude the
taking of Proceedings in any other jurisdiction, whether concurrently or not.

         7.6 Judgments and Immunity.

         (a)      The Guarantor recognizes and acknowledges that this Guarantee
constitutes a commercial transaction and accordingly it acknowledges and agrees
that it is not entitled to plead, and hereby waives to the fullest extent
permitted by law any right to claim, sovereign immunity for any purpose
whatsoever, including, but not limited to, any right to plead sovereign immunity
in respect of any Proceedings pursuant to this Guarantee.

         (b)      The Guarantor consents generally, in respect of any
Proceedings pursuant to this Guarantee for the purpose of enforcing any order,
judgment or award, to the giving of any relief or the issuing of any process in
connection with such order, judgment or award including, without limitation, the
making, enforcement or execution against any property of any order, judgment or
award and to the extent that the Guarantor may be entitled in any jurisdiction
to claim for itself or its property immunity in respect of its obligations under
this Guarantee from any suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or legal process or to the extent that
in any jurisdiction there may be attributed to itself or its property such
immunity, the Guarantor agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.

         (c)      The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a"JUDGMENT"), that:

                  (i)      the Judgment shall be conclusive and binding upon it;

                  (ii)     it shall be bound by and recognize the Judgment in
                           any jurisdiction;

                  (iii)    to the extent permitted by law, it shall not claim,
                           invoke on its behalf or for its benefit any right it
                           may have under the laws of Bahamas or any other state
                           or jurisdiction, to prevent, delay, hinder, nullify
                           or in any other way obstruct the enforcement or
                           execution of the Judgment; and

                  (iv)     to the extent permitted by law, it shall not, and
                           shall irrevocably waive any right to, challenge the
                           Judgment on any ground or the enforcement or
                           execution of the Judgment in any jurisdiction (other
                           than by way of appeal in the original jurisdiction).

         7.7 Benefit of Guarantee.

         This Guarantee shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto. The Guarantor may not assign or otherwise transfer any of its rights
under this Guarantee or any of the other Financing Documents. The benefit of
this Guarantee may be freely and unconditionally assigned, transferred or
otherwise disposed of, in whole or in part, by the Bank to any other person,
corporate or otherwise, to whom the Bank has assigned all or part of its rights
under the Loan Agreement.

<PAGE>

         7.8 Expenses.

         The Guarantor shall be liable to pay to the Bank the costs and expenses
incurred by the Bank in relation to the enforcement or protection or attempted
enforcement or protection of its rights under this Guarantee, including legal
and other professional consultants' fees on a full indemnity basis.

         7.9 Amendment or Waiver.

         No provision of this Guarantee may be amended, supplemented, modified
or waived, except by a written instrument signed by the Bank and the Guarantor.

         7.10 Counterparts.

         This Guarantee may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

         7.11 Set-off.

         The Guarantor authorizes the Bank or any of its subsidiaries and
affiliates (which shall not be obliged to exercise this right) to apply any
credit balance to which the Guarantor is entitled on any account of the
Guarantor with the Bank or any of its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank is
authorized to purchase with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such application.

         7.12 Currency Indemnity.

         If any sum due under this Guarantee or any order or judgment given or
made in relation to this Guarantee has to be converted from the currency (the
"FIRST CURRENCY") in which the same is payable under this Guarantee or under
such order or judgment into another currency (the "SECOND CURRENCY") for the
purpose of (a) making or filing a claim or proof against the Guarantor, (b)
obtaining an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to this Guarantee, the Guarantor
shall indemnify and hold harmless the Bank from and against any loss it suffers
or incurs as a result of any discrepancy between (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency, and (ii) the rate or rates of exchange at which the Bank may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.

                                  *     *

<PAGE>

IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
 hereto and is delivered on the date stated at the beginning of this Guarantee.

                                           WATERFIELDS COMPANY LIMITED

                                           By: _________________________________
                                               Name:
                                               Title:

                                           Notice Address:
                                           Address:
                                           P.O.Box 1114 GT
                                           Trafalgar House
                                           Grand Cayman, Cayman Islands.
                                           Attention:

                                           Telephone No.: 345 945-4277
                                           Telecopier No. 345 949-2957

                                           SCOTIABANK (CAYMAN) LTD.

                                           By: _________________________________
                                               Name: Mr. Bruce John
                                               Title: Commercial Banking Manager

                                           Notice Address:
                                           Address:
                                           Scotiabank (Cayman Islands) Ltd.
                                           Scotia Centre
                                           Cardinal Avenue
                                           P.O. Box 689
                                           Grand Cayman

                                           Attention: Commercial Banking Manager

                                           Telephone No.: 345 949-7666
                                           Telecopier No. 345 949-5130

<PAGE>

                                  EXHIBIT "II"

                   FORM OF PLEDGE OF SHARES TO BE PROVIDED BY

                          WATERFIELDS COMPANY LIMITED

                                       9

<PAGE>

                            THE___DAY OF_____, 2003

                           EQUITABLE CHARGE OF SHARES
     (Collateral to a Substituted Debenture bearing even date herewith and
        entered into between the Borrower and the Secured Party)

                                     BETWEEN

                           CONSOLIDATED WATER CO. LTD.
                                   as Borrower

                                       AND

                        SCOTIABANK (CAYMAN ISLANDS) LTD.
                                as Secured Party

                         with respect to the shares in

                          WATERFIELDS COMPANY LIMITED

                                      (i)

<PAGE>

THIS COLLATERAL CHARGE ("CHARGE") is made on the ___ day of_____, 2003 between
the following parties:

(1)      CONSOLIDATED WATER CO. LTD., a company incorporated in the Cayman
         Islands, with its registered office located at P.O. Box 1114 GT,
         Trafalgar Place, George Town, Grand Cayman, Cayman Islands, (the
         "BORROWER"); and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. a banking institution organised and
         existing under the laws of the Cayman Islands, with its principal place
         of business located at Scotiabank Centre, Cardinal Avenue, Georgetown,
         Grand Cayman (the "SECURED PARTY").

RECITALS

A.       The Borrower currently holds [insert percentage amount of shareholding
         (%)] of the Capital Stock of Waterfields Company Limited (the
         "COMPANY").

B.       The Secured Party has agreed to provide certain loans to the Borrower.

C.       Such loans will be made subject to the terms and conditions of a Loan
         Agreement, dated the date hereof, among the Borrower and the Secured
         Party (the "LOAN AGREEMENT").

D.       It is a condition to the first disbursement under the Loan Agreement
         that the Borrower shall have entered into the Charge.

E.       The Board of Directors of the Borrower is satisfied that the Borrower
         is entering into this Charge for the purposes of its business and that
         its doing so benefits the Borrower.

F.       The Borrower and the Secured Party intend this Charge to take effect as
         a deed.

G.       This Collateral Charge is intended to be collateral to a Substituted
         Debenture bearing even date herewith entered into between the Borrower
         and the Secured Party and shall be stamped as such.

1.       INTERPRETATION

1.1      DEFINITIONS

(a)      Capitalized terms used in this Charge without definition have the
         meanings specified in Annex A to the Loan Agreement.

(b)      In addition the following terms in this Charge have the meanings given
         to them in this Clause.

"CHARGED SHARES" means any shares from time to time forming part of the Secured
Property.

"FINANCING DOCUMENTS" means collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

<PAGE>

"INITIALLY CHARGED SHARES" means all the shares in the Company specified in
recital "A" to this Charge of which the Company is the beneficial or registered
owner on the date of this Charge.

"OBLIGATIONS" shall mean, collectively, all loans, advances, debts, liabilities,
and obligations, howsoever arising, owed by the Borrower under a Financing
Document or otherwise to the Secured Party.

"RECEIVER" means an administrative receiver, a receiver and manager or any other
receiver (whether appointed pursuant to this Charge, pursuant to any statute, by
a court or otherwise) of the Secured Property or any part of it.

"SECURED OBLIGATIONS" means all present and future Obligations.

"SECURED PROPERTY" means the Initially Charged Shares and any other shares in
the Company of which the Borrower is or becomes the beneficial or registered
owner together with all dividends, stocks, shares, warrants, securities, rights,
monies or other property accruing on or derived from such shares.

"SECURITY" means the security created by this Charge.

"SECURITY PERIOD" means the period beginning on the date of this Charge and
ending on the date upon which:

(a)      the Secured Party is under no obligation (whether actual or contingent)
         to make advances or provide other financial accommodation to the
         Borrower under any of the Financing Documents; and

(b)      all Secured Obligations have been unconditionally and irrevocably paid
         and discharged in full.

1.2      INTERPRETATION

The principles of interpretation set forth in Section 18.13 to the Loan
Agreement shall apply to this Charge.

1.3      CONTINUING EVENTS OF DEFAULT

An event which constitutes an Event of Default shall be regarded as continuing
if (a) the circumstances constituting such event continue and (b) the Secured
Party has not waived such of its rights under the Financing Documents as arise
as a result of the occurrence of that event.

1.4      CERTIFICATES

A certificate of the Secured Party as to the amount of any Secured Obligation
owed to it shall be prima facie evidence of the existence and amount of such
Secured Obligation.

                                      -2-

<PAGE>

1.5      STATUTES

Any reference in this Charge to a statute or statutory provision shall, unless
the contrary is indicated, be construed as a reference to such statute or
statutory provision as the same shall have been or may be amended or re-enacted.

1.6      NOMINEES

If the Secured Party causes or requires the Charged Shares to be registered in
the name of a nominee for the Secured Party, any reference in this Charge to the
Secured Party shall, if the context so permits or requires, be construed as a
reference to the Secured Party and such nominee.

1.7      CLAUSE AND SCHEDULE HEADINGS

Clause and Schedule headings are for ease of reference only and shall not affect
the construction of this Charge.

2.       EQUITABLE CHARGE

2.1      CHARGE

The Borrower hereby charges with full title guarantee the Secured Property to
the Secured Party to hold the same on trust as security for the payment and
discharge of the Secured Obligations.

2.2      DEPOSIT OF SHARE CERTIFICATES

Immediately upon execution of this Charge and as a condition to the initial
disbursement under the Loan Agreement, the Borrower shall deposit with the
Secured Party all share certificates and other documents of title relating to
the Initially Charged Shares together with stock transfer forms in respect of
the Initially Charged Shares duly executed in blank by or on behalf of the
Borrower.

2.3      FURTHER SHARES

(a)      Upon its becoming the beneficial or registered owner of any Charged
         Shares (other than the Initially Charged Shares) the Borrower shall
         ensure that such Charged Shares (unless already so registered) are
         registered in the name of the Borrower and shall promptly notify the
         Secured Party of such circumstances and deposit with the Secured Party
         any share certificates and other documents of title representing such
         Charged Shares together with blank stock transfer forms in respect of
         such Charged Shares duly executed by or on behalf of the Borrower.

(b)      [NOTE TO DRAFT FOR ATTENTION OF BORROWER'S COUNSEL - ARE THERE ANY
         SHARES OTHER THAN THE ORDINARY/COMMON SHARES]

The Borrower shall pay when due all calls or other requests for payments due in
respect of any of the Secured Property, but if the Borrower fails to make any
such payment the Secured Party may

                                      -3-

<PAGE>

(but shall not be obliged to) make such payment on behalf of the Borrower and if
the Secured Party does so the Borrower shall promptly on demand of the Secured
Party pay to the Secured Party an amount equal to such payment.

3.       DIVIDENDS, VOTING AND INFORMATION

3.1      SECURITY NOT ENFORCEABLE

Unless and until the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Borrower shall continue to be entitled to:

(a)      receive and retain all dividends, interest and other monies arising
         from the Secured Property; and

(b)      exercise all voting rights in relation to the Charged Shares;

provided that the Borrower shall not exercise such voting rights, or otherwise
permit or agree to (i) any variation of the rights attaching to or conferred by
the Secured Property or any part of it, (ii) any increase in the issued share
capital of the Company in any manner which, in the opinion of the Secured Party,
would, or would be reasonably likely to, impair the value of, or prejudice the
ability of the Secured Party to realise, the Security or (iii) in violation of
any provision of the Financing Documents.

3.2      SECURITY ENFORCEABLE

At any time after the Security has become enforceable pursuant to Clause 8.1,
the Secured Party shall be entitled to cause the Charged Shares to be registered
in its name and may at its discretion (in the name of the Borrower or otherwise
and without any further consent or authority from the Borrower);

(a)      exercise or refrain from exercising any voting rights in respect of the
         Charged Shares and revoke, or cause to be revoked, any proxies given
         pursuant to Clause 3.1 (Security not Enforceable);

(b)      apply all dividends, interest and other monies arising from the Secured
         Property as if they were proceeds of sale under this Charge;

(c)      exercise or refrain from exercising the rights of a legal owner of the
         Secured Property, including the right, in relation to any company whose
         shares or other securities are included in the Secured Property, to
         concur or participate in:

         (i)      the reconstruction, amalgamation, sale or other disposal of
                  such company or any of its assets or undertaking (including
                  the exchange, conversion or reissue of any shares or
                  securities as a consequence thereof),

         (ii)     the realisation, modification or variation of any rights or
                  liabilities attaching to any such shares or securities, and

                                      -4-

<PAGE>

         (iii)    the exercise, renunciation or assignment of any right to
                  subscribe for any such shares or securities,

                  in each case in such manner and on such terms as the Secured
                  Party may think fit, and all rights resulting from any such
                  action shall form part of the Secured Property.

3.3      INFORMATION

If the Borrower receives a balance sheet, profit and loss account or any notice,
report, statement or circular sent or delivered by the issuer of any Charged
Share to its members, it shall promptly deliver a copy to the Secured Party.

4.       CONTINUING SECURITY

4.1      CONTINUING AND INDEPENDENT SECURITY

This Charge shall constitute and be continuing security which shall not be
released or discharged by any intermediate payment or settlement of all or any
of the Secured Obligations, shall continue in full force and effect until the
end of the Security Period and is in addition to and independent of, and shall
not prejudice or merge with, any other security (or any right of set-off) which
the Secured Party may hold at any time for the Secured Obligations or any of
them.

4.2      AVOIDANCE OF PAYMENTS

Where any release, discharge or other arrangement in respect of any Secured
Obligation or any security any Secured Party may hold for such Secured
Obligation is given or made in reliance on any payment or other disposition
which is avoided or must be repaid in an insolvency, liquidation or otherwise,
and whether or not such Secured Party has conceded or compromised any claim that
any such payment or other disposition will or should be avoided or repaid, this
Charge and the Security shall continue as if such release, discharge or other
arrangement had not been given or made.

4.3      IMMEDIATE RECOURSE

The Secured Party shall not be obliged before exercising any of the rights
conferred on it by this Charge or by law to seek to recover amounts due from the
Borrower or to exercise or enforce any other rights or security it may have or
hold in respect of the Secured Obligations.

4.4      WAIVER OF DEFENCES

Neither the obligations of the Borrower under this Charge nor the Security
Documents and the rights, powers and remedies conferred on the Secured Party by
this Charge or by law shall be discharged, impaired or otherwise affected by:

(a)      the winding-up, dissolution, administration or re-organisation of the
         Borrower or any other person or any change in the status, function,
         control or ownership of the Borrower or any such person;

                                      -5-

<PAGE>

(b)      any of the Secured Obligations or any other security held by the
         Secured Party in respect thereof being or becoming illegal, invalid,
         unenforceable or ineffective in any respect;

(c)      any time or other indulgence being granted or agreed to with the
         Borrower or any other person in respect of the Secured Obligations or
         any of them or in respect of any other security held by the Secured
         Party in respect thereof;

(d)      any amendment to, or any variation, waiver or release of, the Secured
         Obligations or any of them or any other security held by the Secured
         Party in respect thereof;

(e)      any total or partial failure to take or perfect any security proposed
         to be taken in respect of the Secured Obligations or any of them;

(f)      any total or partial failure to realise the value of, or any release,
         discharge, exchange or substitution of, any other security held by the
         Secured Party in respect of the Secured Obligations or any of them; or

(g)      any other act, event or omission which might operate to discharge,
         impair or otherwise affect the obligations of the Borrower hereunder,
         the Security or any of the rights, powers and remedies conferred on the
         Secured Party by this Charge or by law.

4.5      NO COMPETITION

Any right which the Borrower may have (a) by way of contribution or indemnity in
relation to the Secured Obligations or (b) otherwise to claim or prove as a
creditor of the Company or any other person or its estate in competition whether
a right of subrogation or otherwise with the Secured Party, shall be exercised
by the Borrower only if and to the extent that the Secured Party so requires and
in such manner and upon such terms as the Secured Party may specify and the
Borrower shall hold any moneys, rights or security held or received by it as a
result of the exercise of any such rights on trust for the Secured Party for
application in accordance with the terms of this Charge as if such moneys,
rights or security were held or received by the Secured Party under this Charge.

4.6      APPROPRIATION

The Secured Party shall not be obliged to apply any sums held or received by it
in respect of the Secured Obligations in or towards payment of the Secured
Obligations and any such sum shall be held by or paid to the Secured Party for
application pursuant to the terms of this Charge.

4.7      SUBROGATION

The Borrower shall have no right of subrogation in respect of the performance of
any of its obligations under this Agreement and the Charge until all of the
Secured Obligations have been paid in full.

                                      -6-

<PAGE>

5.       REPRESENTATIONS AND WARRANTIES

The Borrower makes the representations and warranties set out in Clauses 5.1
(Status and Due Authorisation) to 5.12 (No Security from the Company) and
acknowledges that the Secured Party has entered into this Charge in reliance on
those representations and warranties.

5.1      STATUS AND DUE AUTHORISATION

It is a company duly incorporated with limited liability under the laws of the
Cayman Islands with power to enter into this Charge and to exercise its rights
and perform its obligations under this Charge and all corporate and other action
required to authorise its execution of this Charge and its performance of its
obligations hereunder has been duly taken.

5.2      BINDING OBLIGATIONS

The obligations expressed to be assumed by it in this Charge are legal and valid
obligations binding on it in accordance with the terms of this Charge which
constitutes a first priority fixed charge over the Charged Shares subject to any
general principles of law limiting its obligations which are referred to in any
legal opinion delivered pursuant to the Loan Agreement.

5.3      ALL ACTIONS TAKEN

All acts, conditions and things required to be done, fulfilled and performed in
order (a) to enable it lawfully to enter into, exercise its rights under the
perform and comply with the obligations expressed to be assumed by it in this
Charge, (b) to ensure that the obligations expressed to be assumed by it in this
Charge are legal, valid and binding and (c) to make this Charge admissible in
evidence in its jurisdiction of incorporation have been done, fulfilled and
performed.

5.4      NO DEDUCTIONS OR WITHHOLDINGS

It will not be required to make any deduction or withholding from any payment it
may make under this Charge.

5.5      NO FILING OR STAMP TAXES

Under the laws of its jurisdiction of incorporation, it is not necessary that
this Charge be filed, recorded or enrolled with any court or other authority in
the Cayman Islands or that any ad valorem stamp, registration or similar tax be
paid on or in relation to this Charge.

5.6      NO WINDING-UP

It has not taken any corporate action nor have any other steps been taken or
legal proceedings been started or (to the best of its knowledge and belief)
threatened against it for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its assets or revenues.

                                      -7-

<PAGE>

5.7      NO ADVERSE INTERESTS

Subject only to the Security, no person other than the Borrower has any legal or
beneficial interest (or any right to claim any such interest) in the Secured
Property and the Borrower has not received notice of any such claim.

5.8      NO DISPOSALS

Save as contemplated in this Charge, it has not transferred, mortgaged, charged
or otherwise disposed of (or agreed to transfer, mortgage, charge or otherwise
dispose of), whether by way of security or otherwise, the benefit of all or any
of its right, title and interest in and to the Secured Property or any part of
it.

5.9      NO CONFLICTS

Its execution of this Charge and its exercise of its rights and performance of
its obligations hereunder do not and will not (a) conflict with the provisions
of (i) any agreement, mortgage, bond or other instrument or treaty to which it
is a party or which is binding upon it or any of its assets, (ii) its
constitutive documents or any rules and regulations made thereunder or (iii) any
applicable law, regulation or official or judicial order or (b) cause any of the
foregoing representations to be untrue.

5.10     THE CHARGED SHARES

Each Charged Share is fully paid or credited as fully paid, no calls have been
made in respect thereof and remain unpaid and no calls can be made in respect of
such Charged Share in the future and the terms of each Charged Share and of the
Memorandum and Articles of Association of the issuer of such Charged Share do
not restrict or otherwise limit the Borrower's right to transfer or charge such
Charged Share.

5.11     CHOICE OF LAW

In any proceedings taken in its jurisdiction of incorporation in relation to
this Charge, the choice of the laws of the Bahamas as the governing law of this
Charge and any judgment obtained in the Cayman Islands will be recognised and
enforced.

5.12     NO SECURITY FROM THE COMPANY

It has not requested or taken any security from the Company for any obligations
or liabilities of the Company to it.

5.13     REPETITION

The representations and warranties set out in Clauses 5.1 (Status and Due
Authorisation) to 5.12 (No Security from the Company):

(a)      shall survive the execution of each Financing Document and each
         drawdown under the Loan Agreement; and

                                      -8-

<PAGE>

(b)      are made on the date hereof and are deemed to be repeated on each Draw
         down Date during the Security Period with reference to the facts and
         circumstances then existing.

6.       UNDERTAKINGS

6.1      AUTHORISATIONS

The Borrower shall obtain, comply with the terms of and do all that is necessary
to maintain in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its jurisdiction of
incorporation to enable it lawfully to enter into and perform its obligations
under this Charge and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of this Charge.

6.2      NO ACTION

The Borrower shall not take any action which would cause any of the
representations made in Clause 5 (Representations and Warranties) to be untrue
at any time during the Security Period.

6.3      NOTIFICATION OF MISREPRESENTATION

The Borrower shall notify the Secured Party of the occurrence of any event which
results in or may reasonably be expected to result in any of the representations
made in Clause 5 (Representations and Warranties) being untrue when made or when
deemed to be repeated.

6.4      NO VARIATION OR RELEASE

The Borrower shall not, without the prior written consent of the Secured Party,
purport to vary or revoke any notice or instruction relating to this Charge
which it has given or may later give to any person.

6.5      NO ACTION TO JEOPARDISE SECURITY CONSTITUTED HEREBY

The Borrower shall not do or fail to do or cause or permit another person to do
or omit to do anything which is liable to jeopardise the effectiveness or
priority, in relation to the Security.

7.       FURTHER ASSURANCE

The Borrower shall from time to time and at its own expense give all such
assurances and do all such things as the Secured Party may require in order to
enable the Secured Party to perfect or protect the security created or intended
to be created by this Charge or to exercise any of the rights conferred on it by
this Charge or by law and to that intent the Borrower shall execute all such
instruments, deeds and agreements and give all such notices and directions as
the Secured Party may require.

                                      -9-

<PAGE>

8.       ENFORCEMENT OF SECURITY

8.1      SECURITY ENFORCEABLE

The Security shall become immediately enforceable if an Event of Default has
occurred and is continuing as defined above in Clause 1.3.

8.2      ENFORCEMENT

At any time after the Security has become enforceable, the Secured Party may in
its absolute discretion enforce all or any part of the Security and exercise any
of the rights conferred on it by this Charge or by law at such times and in such
manner as it thinks fit.

8.3      POWER OF SALE

At any time after the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Secured Party may (without notice to the Borrower)
sell or otherwise dispose of the Secured Property or any part of it and shall be
entitled to apply the proceeds of such sale or other disposal in paying the
costs of such sale or disposal and thereafter in or towards the discharge of the
Secured Obligations or otherwise as provided for in this Charge.

8.4      STATUTORY POWERS

For the purposes of all powers implied by statute the Secured Obligations shall
be deemed to have become due and payable on the date of this Charge.

8.5      REGISTRATION OF SHARES

The Secured Party shall be entitled at any time after the Security has become
enforceable pursuant to Clause 8.1 (Security Enforceable) to complete any stock
transfer forms then held by the Secured Party pursuant to this Charge in the
name of the Secured Party and thereupon the Borrower shall do whatever the
Secured Party requires in order to procure:

(a)      The prompt registration of such transfer or transfers and the prompt
         issue of a new certificate or certificates for the relevant Charged
         Shares in the name of the Secured Party who shall hold such Charged
         Shares as Security for the Obligations in furtherance of the power of
         sale provided for in Clause 8.3 above; and

(b)      Compliance by the Company with all requirements of the Land Holding
         Companies Share Transfer Tax Law (2002 Revision), as the same may be
         amended from time to time, or any legislation in substitution or in
         addition thereto and the Borrower shall provide all assistance as may
         be needed or required by the Company to enable it to meet such
         compliance whether financial or otherwise.

                                      -10-

<PAGE>

9.       RECEIVERS

9.1      APPOINTMENT

At any time after the Security has become enforceable (whether or not the
Secured Party shall have taken possession of the Secured Property), or following
the dissolution of the Borrower, and without any or further notice, the Secured
Party may, by Deed or writing signed by any officer or manager of the Secured
Party or any person authorised for this purpose by the Secured Party, appoint
any person to be Receiver, and may similarly remove any Receiver whether or not
it appoints any person in his place. If the Secured Party appoints more than one
person as Receiver, the Secured Party may give the relevant persons power to act
either jointly or severally.

9.2      SCOPE OF APPOINTMENT

Any Receiver may be appointed either Receiver of all the Secured Property or
Receiver of such part of the Secured Property as may be specified in the
appointment. In the latter case, the rights conferred on a Receiver by Clause 9
(Receivers) shall have effect as though every reference in that Clause to the
"SECURED PROPERTY" were a reference to the part of the Secured Property so
specified or any part thereof.

9.3      POWERS OF A RECEIVER

Any Receiver appointed under this Charge shall have all the powers granted to a
receiver under the applicable law and, in addition shall have the right, either
in his own name or in the name of the Borrower or otherwise and in such manner
and upon such terms and conditions as the Receiver thinks fit:

(a)      in connection with any sale or disposition of the Secured Property, to
         receive the consideration therefor in a lump sum or in instalments and
         to receive shares by way of consideration;

(b)      to grant options, licences or any other interest whatsoever in relation
         to the Secured Property;

(c)      to do all other acts and things which he may consider desirable or
         necessary for realising the Secured Property or incidental or conducive
         to any of the rights, powers or discretions conferred on a Receiver
         under, or by virtue of, this Charge; and

(d)      to exercise in relation to the Secured Property all the powers,
         authorities and things which he would be capable of exercising if he
         were the absolute beneficial owner of the same.

9.4      CONFLICT

If there is any ambiguity or conflict between the powers conferred on the
Receiver by the applicable law and the powers conferred by Clause 9.3 (Powers of
a Receiver), the powers conferred by Clause 9.3 (Powers) shall prevail.

                                      -11-

<PAGE>

9.5      SECURITY TRUSTEE OF BORROWER

Any Receiver shall be the agent of the Borrower for all purposes and the
Borrower shall be solely responsible for the contracts, engagements, acts,
omissions, defaults and losses of the Receiver and for all liabilities incurred
by the Receiver.

9.6      REMUNERATION

The Secured Party may, from time to time, determine the remuneration of any
Receiver and may direct payment of such remuneration out of moneys accruing to
the Receiver as Receiver but the Borrower alone shall be liable for the payment
of such remuneration and for all other costs, charges and expenses of the
Receiver, unless incurred as the result of the fraud, gross negligence or wilful
misconduct of the Receiver.

10.      APPLICATION OF PROCEEDS

Any moneys held or received by the Secured Party under or pursuant to this
Charge shall be applied by the Secured Party in reduction of the amounts due to
the Secured Party under the terms of the Loan Agreement.

11.      POWER OF ATTORNEY

11.1     APPOINTMENT

By way of security for the performance of its obligations hereunder, the
Borrower hereby irrevocably appoints the Secured Party, any Receiver of the
Secured Property or any part of it and its delegates and sub-delegates to be its
attorney acting severally (or jointly with any other such attorney or attorneys)
and on its behalf and in its name or otherwise to do any and every thing which
the Borrower is obliged to do under the terms of this Charge or which such
attorney considers necessary in order to enable the Secured Party or such
attorney to exercise the rights conferred on it by this Charge or by law.

11.2     RATIFICATION

The Borrower hereby ratifies and confirms and agrees to ratify and confirm
whatever any attorney appointed under this Charge shall do in its capacity as
such.

12.      RELEASE OF THE SECURITY

After the end of the Security Period, the Secured Party shall, at the request
and cost of the Borrower, execute all such documents and do all such other
things as may be required to release the Security, in each case without recourse
to or any representation or warranty by or from the Secured Party.

13.      COSTS AND EXPENSES

                                      -12-

<PAGE>

13.1     TRANSACTION COSTS

The Borrower agrees with the Secured Party that it shall on demand of the
Secured Party reimburse the Secured Party on a full indemnity basis all costs
and expenses (including legal fees), incurred by, or any remuneration payable to
the Secured Party in connection with the preparation, negotiation, execution and
perfection of this Charge and the implementation of the arrangements
contemplated herein.

13.2     STAMP TAX

The Borrower shall pay any and all stamp, registration and other taxes to which
this Charge or any judgment given in connection herewith is or at any time may
be subject and shall on demand indemnify the Secured Party against any
liabilities, costs, claims and expenses (including legal fees) resulting from
any failure to pay or delay in paying any such tax.

13.3     INDEMNITY

The Borrower shall indemnify and hold harmless the Secured Party from and
against any and all costs, claims losses, expenses (including legal fees) and
liabilities, which the Secured Party may incur as a result of the occurrence of
any Event of Default, the enforcement of the Security or the exercise or
enforcement by the Secured Party of any of the rights conferred on it by this
Charge or by law unless incurred by the Secured Party as a result of its own
fraud, wilful misconduct or gross negligence or the fraud, gross negligence or
wilful misconduct of its delegates and sub-delegates.

14.      NO WAIVER; REMEDIES CUMULATIVE

No failure or delay on the part of the Secured Party in exercising any right,
power or privilege hereunder or under any other Financing Document and no course
of dealing between the Borrower and the Secured Party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Secured Party
to take any other or further action in any circumstances without notice or
demand. All remedies, either under this Agreement or any other Financing
Document or pursuant to any applicable law or otherwise afforded to the Secured
Party shall be cumulative and not alternative.

15.      ADDITIONAL PROVISIONS

15.1     SEVERABILITY

Any provision hereof which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of any provision in any other
jurisdiction.

                                      -13-

<PAGE>

15.2     CURRENCY CONVERSION

In order to apply any sum held or received by the Secured Party in or towards
payment of the Secured Obligations, the Secured Party may purchase an amount in
another currency and the rate of exchange to be used shall be that at which, at
such time as it considers appropriate, the Secured Party is able to effect such
purchase.

15.3     JUDGMENT CURRENCY

This is an international transaction in which the specification of Dollars and
payment in the Cayman Islands is of the essence, and the obligations of the
Borrower under this Charge and under the other Financing Documents to make
payment to (or for the account of) the Secured Party in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any other currency or in another place except to
the extent that such tender or recovery results in the effective receipt by the
Secured Party in Cayman of the full amount of Dollars payable to the Secured
Party under this Charge.

(a)      If any sum due from the Borrower under this Charge (a "SUM"), or any
         order, judgment or award given or made in relation to a Sum, has to be
         converted from the currency (the "FIRST CURRENCY") in which that Sum is
         payable into another currency (the "SECOND CURRENCY") for the purpose
         of:

         (i)      making or filing a claim or proof against the Company or the
                  Borrower;

         (ii)     obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

         the Borrower shall as an independent obligation, within three (3)
         Business Days of demand, indemnify the Secured Party against any cost,
         loss or liability arising out of or as a result of the conversion
         including any discrepancy between (A) the rate of exchange used to
         convert that Sum from the First Currency into the Second Currency and
         (B) the rate or rates of exchange available to the Secured Party at the
         time of its receipt of that Sum.

(b)      The Borrower waives any right it may have in any jurisdiction to pay
         any amount under this Charge in a currency or currency unit other than
         that in which it is expressed to be payable.

15.4     RIGHTS CUMULATIVE

The rights and remedies provided by this Charge are cumulative and not exclusive
of any rights or remedies provided by law.

15.5     MORTGAGEE IN POSSESSION

Neither the Secured Party nor any Receiver shall by reason of its taking any
action permitted by this Charge or its taking possession of the Secured Property
or any part of it be liable to account as mortgagee in possession or be liable
for any loss on realisation or for any default or omission

                                      -14-

<PAGE>

for which a mortgagee in possession might be liable other than for its own
fraud, gross negligence and wilful misconduct, or the fraud, gross negligence or
wilful misconduct of its delegates.

16.      ASSIGNMENT

16.1     THE BORROWER'S RIGHTS

The rights of the Borrower under this Charge are not assignable or transferable
and the Borrower agrees that it will not purport to assign all or any such
rights.

16.2     THE SECURED PARTY'S RIGHTS

The rights of the Secured Party under this Charge are assignable in whole or in
part and the Secured Party may assign all or any such rights without the consent
of the Borrower. The Secured Party shall provide written notice to the Borrower
of any such assignment.

17.      NOTICES

(a)      All notices, requests, approvals, consents and other communications
         provided for hereunder shall be in writing (including, unless the
         context expressly otherwise provides, by facsimile transmission,
         provided that any matter transmitted by the Borrower by facsimile (i)
         shall be promptly confirmed by a telephone call to the recipient at the
         number specified on the applicable signature page hereof, and (ii)
         shall be followed promptly by a hard copy original thereof by express
         courier) and faxed or delivered, to the address or facsimile number
         specified for notices on the applicable signature page hereof or to
         such other address as shall be designated by such party in a written
         notice to the other parties hereto.

(b)      All such notices, requests, approvals, consents and communications (i)
         sent by express courier will be effective upon delivery to or refusal
         to accept delivery by the addressee, and (ii) transmitted by facsimile
         will be effective when sent and facsimile confirmation received; except
         that all notices and other communications to any Agent shall not be
         effective until actually received.

(c)      The Borrower acknowledges and agrees that any agreement of the Secured
         Party to receive certain notices by telephone and facsimile is solely
         for the convenience and at the request of the Borrower. The Secured
         Party shall be entitled to rely on the authority of any Person
         purporting to be a Person authorized by the Borrower to give such
         notice and the Secured Party shall not have any liability to the
         Borrower or other Person on account of any action taken or not taken by
         the Secured Party in reliance upon such telephonic or facsimile notice.

(d)      All notices, requests and other communications hereunder and under the
         other Financing Documents shall be in the English language unless
         otherwise agreed by the parties hereto.

                                      -15-

<PAGE>

18.      GOVERNING LAW AND JURISDICTION

THIS CHARGE IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE BAHAMAS.

19.      SUBMISSION

(a)      For the exclusive benefit of the Secured Party, the Borrower
         irrevocably agrees that the courts of the Bahamas are to have
         jurisdiction to settle any claims or disputes arising under, out of or
         in connection with this Charge (including without limitation any claim
         or dispute relating to the validity, interpretation, performance,
         termination or enforcement of this Charge) and that accordingly any
         suit, action or proceedings in that respect (together in Clauses 19 and
         20 referred to as "PROCEEDINGS") may be brought in such courts.

(b)      The Borrower irrevocably waives and agrees not to raise any objection
         which it may have now or hereafter to the laying of the venue of any
         Proceedings in the courts of the Bahamas and any claim that any such
         Proceedings have been brought in an inconvenient or inappropriate
         forum.

(c)      The Borrower irrevocably agrees not to take Proceedings in any court of
         competent jurisdiction other than the courts of the Bahamas, save with
         respect to any counterclaim asserted by the Borrower in the course of
         proceedings previously commenced by the Secured Party. Nothing
         contained in this Clause 19 shall limit the right of the Secured Party
         to take Proceedings against the Borrower in any other court of
         competent jurisdiction, nor shall the taking of Proceedings in one or
         more jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

20.      JUDGMENTS AND IMMUNITY

(a)      The Borrower recognizes and acknowledges that this Charge constitutes a
         commercial transaction and accordingly it acknowledges and agrees that
         it is not entitled to plead, and pursuant to this Clause 20 hereby
         waives to the fullest extent permitted by law any right to claim,
         sovereign immunity for any purpose whatsoever, including, but not
         limited to, any right to plead sovereign immunity in respect of any
         Proceedings pursuant to this Charge.

(b)      The Borrower consents generally, in respect of any Proceedings pursuant
         to this Charge for the purpose of enforcing any order, judgment or
         award, to the giving of any relief or the issuing of any process in
         connection with such order, judgment or award including, without
         limitation, the making, enforcement or execution against any property
         of any order, judgment or award and to the extent that the Borrower may
         be entitled in any jurisdiction to claim for itself or its property
         immunity in respect of its obligations under this Charge from any suit,
         execution, attachment (whether in aid of execution, before judgment or
         otherwise) or legal process or to the extent that in any jurisdiction
         there may be attributed to itself or its property such immunity, the
         Borrower agrees not to claim and hereby irrevocably waive such immunity
         to the fullest extent permitted by the laws of such jurisdiction.

                                      -16-

<PAGE>

(c)      The Borrower unconditionally and irrevocably agrees, with respect to
         any final order, judgment or award in any Proceedings made pursuant to
         this Charge and not subject to appeal (a "JUDGMENT"), that:

         (i)      the Judgment shall be conclusive and binding upon it;

         (ii)     it shall be bound by and recognize the Judgment in any
                  jurisdiction;

         (iii)    to the extent permitted by law, it shall not claim, invoke on
                  its behalf or for its benefit any right it may have under the
                  laws of the Bahamas, or any other state or jurisdiction, to
                  prevent, delay, hinder, nullify or in any other way obstruct
                  the enforcement or execution of the Judgment; and

         (iv)     to the extent permitted by law, it shall not, and shall
                  irrevocably waive any right to, challenge the Judgment on any
                  ground or the enforcement or execution of the Judgment in any
                  jurisdiction (other than by way of appeal in the original
                  jurisdiction).

21.      COUNTERPARTS AND EFFECTIVENESS

21.1     COUNTERPARTS

This Charge may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

21.2     EFFECTIVENESS

This Charge shall take effect and be delivered as a deed on the date on which it
is stated to be made.

22.      AMENDMENT OR WAIVER

No provision of this Agreement may be amended, supplemented, modified or waived,
except by written instrument signed by each of the parties hereto.

                                     *  *  *

                                      -17-

<PAGE>

IN WITNESS WHEREOF this Charge has been executed as a deed by the parties hereto
and has been delivered on date stated at the beginning of this Deed.

THE BORROWER                               )
Executed on behalf of                      )
CONSOLIDATED WATER CO. LTD.                )
as a deed by:                              )

Name:

Title:

Address:

Fax Number:
Attention:

SECURED PARTY                              )
EXECUTED ON BEHALF OF                      )
SCOTIABANK (CAYMAN ISLANDS) LTD.           )
as a deed by:

Name:

Title:

Address:

Fax Number:
Attention:

         By its execution of this Equitable Charge of Shares, WATERFIELDS
COMPANY LIMITED hereby acknowledges the terms and conditions hereof, and
irrevocably undertakes that should the Secured Party exercise its rights under
this Equitable Charge of Shares, Waterfields Company Limited shall not take any
action, or fail to take any required action, which would have the effect of
frustrating the Secured Party's ability to be recorded in the Register of
Members as the registered legal and beneficial owner of the Shares.

WATERFIELDS COMPANY LIMITED

Name:

Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.40
<SEQUENCE>20
<FILENAME>g80228exv10w40.txt
<DESCRIPTION>GUARANTEE FROM DESALCO (BARBADOS) LTD.
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.40

================================================================================

                                   GUARANTEE

                                       by

                            DESALCO (BARBADOS) LTD.

                                  IN FAVOUR OF

                        SCOTIABANK (CAYMAN ISLANDS) LTD.

                       Dated the 7th day of February, 2003

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                 <C>
SECTION 1. DEFINITIONS AND INTERPRETATION ......................................     2
         1.1 General Definitions ...............................................     2
         1.2 Interpretation ....................................................     3
SECTION 2. GUARANTEE ...........................................................     3
         2.1 Guarantor Guaranteed Obligations ..................................     3
         2.2 Continuing Guarantee ..............................................     3
         2.3 Payment of Guaranteed Obligations .................................     4
         2.4 No Set-off ........................................................     4
         2.5 Taxes .............................................................     4
         2.6 Application of Payments ...........................................     4
SECTION 3. SAVING PROVISIONS ...................................................     5
         3.1 Change in Guaranteed Obligations ..................................     5
         3.2 Waiver of Defenses ................................................     5
         3.3 Immediate Recourse ................................................     6
         3.4 Non-Competition ...................................................     6
         3.5 Bankruptcy or Liquidation of the Borrower .........................     6
         3.6 Appropriation of Moneys ...........................................     6
         3.7 Reinstatement .....................................................     7
         3.8 Additional Security ...............................................     7
SECTION 4. INDEMNITY ...........................................................     7
         4.1 Indemnity .........................................................     7
SECTION 5. REPRESENTATIONS AND WARRANTIES ......................................     7
         5.1 Representations and Warranties ....................................     7
         5.2 Bank's Reliance ...................................................     8
         5.3 Rights and Remedies not Limited ...................................     8
SECTION 6. COVENANTS ...........................................................     8
         6.1 Guarantor Covenants ...............................................     8
SECTION 7. MISCELLANEOUS .......................................................     9
         7.1 Notices ...........................................................     9
         7.2 English Language ..................................................    10
         7.3 No Waiver; Remedies Cumulative ....................................    10
         7.4 Governing Law and Jurisdiction ....................................    10
         7.5 Submission ........................................................    10
         7.6 Judgments and Immunity ............................................    11
         7.7 Benefit of Guarantee ..............................................    11
         7.8 Expenses ..........................................................    12
         7.9 Amendment or Waiver ...............................................    12
         7.10 Counterparts .....................................................    12
         7.11 Set-off ..........................................................    12
         7.12 Currency Indemnity ...............................................    12
</TABLE>

<PAGE>

         THIS GUARANTEE ("GUARANTEE"), dated the 7th day of February, 2003, is
made as a deed by:

(1)      DESALCO (BARBADOS) LTD., a company organized and existing under the
laws of Barbados ("GUARANTOR");

in favour of

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").

Defined terms used herein shall have the meanings specified in Section 1.

         WHEREAS:

         (A)      Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").

         (B)      It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.

         (C)      The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.

         (D)      To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.

         (I)      The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. DEFINITIONS AND INTERPRETATION.

         1.1 General Definitions.

         (a)      Unless the context otherwise requires, capitalized terms used
                  in this Guarantee without definition have the meanings
                  specified in Annex A to the Loan Agreement.

         (b)      In addition, wherever used in this Guarantee, unless the
context otherwise requires, the following terms have the meaning opposite it:

         "FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

         "GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Financing Documents, and in any
capacity, irrespective of whether such liabilities and obligations:

<PAGE>

                           (i)      are present or future;

                           (ii)     are actual, contingent or otherwise;

                           (iii)    are at any time ascertained or
                                    unascertained;

                           (iv)     are owed or incurred by or on account of the
                                    Borrower alone, or severally or jointly with
                                    any other person;

                           (v)      are owed or incurred as principal, interest,
                                    fees, charges, taxes, duties or other
                                    imports, damages (whether for breach of
                                    contract or tort or incurred on any other
                                    ground), losses, costs or expenses, or on
                                    any other account; or

                           (vi)     comprise any combination of the above.

         provided that the Guaranteed Obligations shall be limited to the lesser
of: (i) the total amount outstanding under the Financing Documents; and (ii) the
maximum amount of indebtedness and liability of the Borrower that the Guarantor
is able to guarantee and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.

         1.2 Interpretation.

         The rules of interpretation set forth in Section 18.13 of the Loan
Agreement shall apply to this Guarantee.

         SECTION 2. GUARANTEE.

         2.1 Guarantor Guaranteed Obligations.

         The Guarantor irrevocably and absolutely, as principal obligor and not
merely as surety, guarantees and promises to pay, upon demand of the Bank, the
Guaranteed Obligations not paid or performed by the Borrower when due in the
same manner in all respects as the Guaranteed Obligations are required to be
paid or performed by the Borrower.

         2.2 Continuing Guarantee.

         (a) The guarantee and the indemnity of the Guarantor contained in this
Guarantee is a continuing obligation of the Guarantor (and all liabilities to
which it applies or may apply under the terms of this Guarantee shall be
conclusively presumed to have been created in reliance on such guarantee),
notwithstanding any settlement of account or the occurrence of any other thing,
and shall remain in full force and effect until:

                  (i)      the Guaranteed Obligations have been fully paid or
                           performed strictly in accordance with the provisions
                           of the Financing Documents, regardless of any
                           intermediate payment or discharge in whole or in
                           part; and

<PAGE>

                  (ii)     all of the obligations of the Guarantor under this
                           Guarantee have been fully performed in accordance
                           with this Guarantee.

         (b)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall be additional, separate and independent obligations of the
Guarantor.

         (c)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall survive the termination of the Financing Documents.

         (d)      The Guarantor's obligations under this Guarantee can be
discharged only by performance and then only to the extent of such performance.
Those obligations are not subject to any prior notice to, demand upon or action
against the Borrower or any other Person or to any prior notice to the Guarantor
of any default by the Borrower.

         2.3 Payment of Guaranteed Obligations.

         The Guarantor shall make payment of the Guaranteed Obligations under
Section 2.1 (Guarantor Guaranteed Obligations) as provided in the relevant
Financing Documents.

         2.4 No Set-off.

         All payments which the Guarantor is required to make under this
Guarantee shall be without any set-off, counterclaim or condition.

         2.5 Taxes.

         (a) The Guarantor shall pay or cause to be paid all present and future
taxes, duties, fees and other charges of whatsoever nature (excluding income
taxes), if any, now or in the future levied or imposed by any Governmental
Authority or similar body in the jurisdiction in which the Guarantor is located
or out of which a payment is made on or in connection with the payment of any
and all amounts due under this Guarantee.

         (b)      All payments due under this Guarantee shall be made without
deduction for or on account of any such taxes, duties, fees or other charges.

         (c)      If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made such payments without deduction, the amounts
due under this Guarantee shall be increased to such amount as may be necessary
so that the Bank receives the full amount it would have received (taking into
account any such taxes, duties, fees or other charges payable on amounts payable
by the Guarantor under this subsection) had such payments been made without such
deduction.

         (d)      If subsection (c) above applies and the Bank so requires, the
Guarantor shall deliver to the Bank official tax receipts evidencing payment (or
certified copies of them) within thirty (30) days of the date of payment.

         2.6 Application of Payments.

         The Bank may apply any amounts received by it or recovered under:

         (a)      any Security Document; and

<PAGE>

         (b)      any other document or agreement which is a security for any of
the Guaranteed Obligations and any other moneys,

in such manner as it determines in its absolute discretion in accordance with
the Financing Documents.

         SECTION 3. SAVING PROVISIONS.

         3.1 Change in Guaranteed Obligations.

         The obligations of the Guarantor under this Guarantee shall extend to
any change in the Guaranteed Obligations:

         (a)      as a result of any amendment, supplement, renewal or
replacement of any Financing Document or the occurrence of any other thing; and

         (b)      regardless of whether the Guarantor is aware of, has consented
to or is given notice of any alteration, variation, amendment, supplement,
renewal or replacement of any Financing Document or the occurrence of such other
thing.

         3.2 Waiver of Defenses.

         Except for payment or performance in full of the Guaranteed
Obligations, the payment in full by the Guarantor of its obligations under this
Guarantee or otherwise as provided in this Guarantee, the Guarantor's
obligations under this Guarantee shall not be discharged, impaired or otherwise
adversely affected by any act, omission, circumstance, matter or thing which,
but for this provision, would reduce, release or prejudice any of its
obligations under this Guarantee or which might otherwise constitute a legal or
equitable discharge or defense of a surety or a guarantor, including (whether or
not known to the Guarantor or the Borrower):

         (a)      any time, waiver, composition, forbearance or concession given
to the Borrower or any other person;

         (b)      any assertion of, or failure to assert, or delay in asserting,
any right, power or remedy against the Borrower or any other person, or in
respect of any security for the Loans;

         (c)      any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Financing Document or of any other
agreement or security between the Bank and the Borrower;

         (d)      any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order;

         (e)      the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;

         (f)      any purported or actual assignment, transfer, novation or
disposal of, or granting any participation in, any of the Loans to any other
party;

         (g)      any Financing Document being in whole or in part illegal,
void, voidable, avoided, invalid, unenforceable or otherwise of limited force
and effect; or

<PAGE>

         (h)      any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
in respect of the Guaranteed Obligations or any of them.

         3.3 Immediate Recourse.

         The Guarantor waives any right it may have of first requiring the Bank
(or any trustee, agent or other person acting on its behalf) to proceed against
or enforce any other rights or security or claim payment from any person before
claiming from the Guarantor under this Guarantee.

         3.4 Non-Competition.

         (a)      If any amounts have become payable or have been paid by the
Guarantor under this Guarantee, the Guarantor shall not, in respect of such
moneys, seek to enforce repayment, obtain the benefit of any security or
exercise any other rights or legal remedies of any kind which may accrue to the
Guarantor against the Borrower, whether by way of subrogation, offset,
counterclaim or otherwise, in respect of the amount so payable or so paid (or in
respect of any other moneys for the time being due to the Guarantor from the
Borrower), if and for so long as any moneys remain outstanding to the Bank under
the Financing Documents. The Guarantor shall hold in trust for, and forthwith
pay or transfer to, the Bank any payment or distribution or benefit of security
received by it contrary to this Section 3.4(a).

         (b)      Upon the payment and satisfaction in full of all Guaranteed
Obligations and provided that no amounts (actual or contingent) remain
outstanding to the Bank under the Loan Agreement, the Guarantor, if it has made
a payment under this Guarantee, shall be entitled to exercise its rights of
subrogation to its proportion of all relevant rights of the Bank against the
Borrower pursuant to the Financing Documents. The Bank shall promptly execute,
at the expense of the Guarantor, an assignment and such other documents in such
form as the Guarantor may reasonably request to transfer such proportion of such
rights of the Bank against the Borrower to the Guarantor as are required for the
Guarantor to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not in the
name of the Bank.

         3.5 Bankruptcy or Liquidation of the Borrower.

         If the Borrower becomes bankrupt, enters into a composition or makes
any arrangement with its creditors, or is dissolved, liquidated or wound up, the
Guarantor shall not claim, rank, prove or vote as a creditor of the Borrower or
its estate in competition with the Bank in respect of any amounts owing to the
Guarantor by the Borrower on any account whatsoever, but instead shall give the
Bank the benefit of any such proof and of all amounts to be received in respect
of that proof until all Guaranteed Obligations have been fully paid.

         3.6 Appropriation of Moneys.

         Until all of the Guaranteed Obligations have been irrevocably paid in
full, the Bank (or any trustee, agent or other person acting on its behalf) may
refrain from enforcing any other moneys, security or rights held or received by
the Bank (or such trustee, agent or other person) in respect of the Guaranteed
Obligations, or apply and enforce the same in such manner and order as it sees
fit.

<PAGE>

         3.7 Reinstatement.

         (a)      Where any discharge (whether in respect of the obligations of
the Borrower, the Guarantor or any security for those obligations or otherwise)
is made in whole or in part or any arrangement is made on the faith of any
payment, security or other disposition which is avoided or must be restored on
insolvency, liquidation or otherwise without limitation, the liability of the
Guarantor under this Guarantee shall continue or shall be reinstated (as the
case may be) as if such discharge or arrangement had not occurred.

         (b)      The Bank (or any trustee, agent or other person acting on its
behalf) may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.

         3.8 Additional Security.

         This Guarantee is in addition to and is not in any way prejudiced by
any collateral or other security now or hereafter held by the Bank, nor shall
such collateral or other security held by the Bank or the liability of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Guarantee.

         SECTION 4. INDEMNITY.

         4.1 Indemnity.

         The Guarantor agrees as a primary obligor and not merely as a surety,
to indemnify and hold harmless the Bank from and against any loss, cost or
damage incurred by the Bank as a result of any obligation of the Guarantor
hereunder as guarantor being or becoming void, voidable, unenforceable or
otherwise ineffective against the Guarantor for any reason whatsoever (whether
or not known to the Bank or any other Person), the amount of such loss being
limited to the amount that the Bank would have been entitled to recover from the
Guarantor as guarantor pursuant to this Guarantee had such obligations not
become void, voidable, unenforceable or otherwise ineffective against the
Guarantor.

         SECTION 5. REPRESENTATIONS AND WARRANTIES.

         5.1 Representations and Warranties.

         The Guarantor represents and warrants to the Bank that as of the date
of this Guarantee and on each Drawdown Date:

         (a)      it is a company duly incorporated under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into and
deliver and to perform its obligations under this Guarantee;

         (b)      the execution and delivery by it of this Guarantee and the
performance by it of its obligations hereunder have been duly authorized;

         (c)      it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;

<PAGE>

         (d)      neither the execution and delivery by it of this Guarantee nor
the performance by it of its obligations under this Guarantee:

                  (i)      conflicts with or will conflict with or result in any
                           breach of any of the terms, conditions or provisions
                           of, or violate or constitute a default or require any
                           consent under, any indenture, mortgage, agreement or
                           other instrument or arrangement to which it is a
                           party or which binds or purports to be binding upon
                           it; or

                  (ii)     violates or will violate any judgment, decree or
                           order or any statute, rule or regulation or any of
                           the terms or provisions of its Charter;

         (e)      all authorizations required for the execution and delivery of
this Guarantee by it and the performance by it of its obligations hereunder have
been duly obtained or granted and are in full force and effect;

         (f)      it has not requested or taken any security from the Borrower
for any obligation (whether present or future, actual or contingent) of the
Borrower to it; and

         (g)      the representations and warranties set out in this Section 5.1
(Representations and Warranties) will survive the execution of each Financing
Document and each Disbursement under the Financing Documents.

         5.2 Bank's Reliance.

         The Guarantor acknowledges that it makes the representations in Section
5.1 (Representations and Warranties) with the intention of inducing the Bank to
enter into this Guarantee and the Financing Documents and that the Bank enters
into this Guarantee and the Financing Documents on the basis of, and in full
reliance on, each of such representations.

         5.3 Rights and Remedies not Limited.

         The Bank's rights and remedies in relation to any misrepresentation or
breach of warranty on the part of the Guarantor are not prejudiced:

         (a)      by any investigation by or on behalf of the Bank into the
affairs of the Guarantor;

         (b)      by the execution or the performance of this Guarantee; or

         (c)      by any other act or thing which may be done by or on behalf of
the Bank in connection with this Guarantee and which might, apart from this
Section, prejudice such rights or remedies.

         SECTION 6. COVENANTS.

         6.1 Guarantor Covenants.

                  The Guarantor shall:

<PAGE>

         (a)      when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank under this
Guarantee including, but not limited to, the execution of any document or
agreement;

         (b)      obtain, maintain and renew when necessary all authorizations
required under any law or document or agreement:

                  (i)      to enable it to perform its obligations under this
                           Guarantee; or

                  (ii)     for the validity or enforceability of the guarantee;

         (c)      not take any action which may impair the ability of the
Borrower to observe and perform all of its covenants, agreements and obligations
under or pursuant to the Financing Documents;

         (d)      take such action as may be necessary or as the Bank may
reasonably request in order to:

                  (i)      comply with its obligations under this Guarantee; and

                  (ii)     cause the Borrower to the extent possible to take
                           such corporate action as may be necessary to comply
                           with its respective obligations under the Financing
                           Documents;

         (e)      the Guarantor shall not take any action which would cause any
of the representations made in Section 5.1 (Representations and Warranties) to
be untrue at any time during the continuation of this Guarantee.

         SECTION 7. MISCELLANEOUS.

         7.1 Notices.

         (a)      All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Guarantor by facsimile (i) shall be promptly
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof by express courier) and faxed or delivered, to the address
or facsimile number specified for notices on the applicable signature page
hereof or to such other address as shall be designated by such party in a
written notice to the other parties hereto.

         (b)      All such notices, requests, approvals, consents and
communications (i) sent by express courier will be effective upon delivery to or
refusal to accept delivery by the addressee, and (ii) transmitted by facsimile
will be effective when sent and facsimile confirmation received; except that all
notices and other communications to any Agent shall not be effective until
actually received.

         (c)      The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall

<PAGE>

not have any liability to the Guarantor or other Person on account of any action
taken or not taken by the Bank in reliance upon such telephonic or facsimile
notice.

         (d)      All notices, requests and other communications hereunder and
under the other Financing Documents shall be in the English language.

         7.2 English Language.

         This Guarantee and all other Financing Documents shall be in the
English language. Except as otherwise agreed by the parties hereto, all
documents, certificates, reports or notices to be delivered or communications to
be given or made by any party hereto pursuant to the terms of this Guarantee or
any other Financing Document shall be in the English language.

         7.3 No Waiver; Remedies Cumulative.

         No failure or delay on the part of the Bank or the holder of any Note
in exercising any right, power or privilege hereunder or under any other
Financing Document and no course of dealing between the Guarantor and the Bank
or the holder of any Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Financing Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder or thereunder. No
notice to or demand on the Guarantor in any case shall entitle the Guarantor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank or the holder of any Note to take
any other or further action in any circumstances without notice or demand. All
remedies, either under this Guarantee or any other Financing Document or
pursuant to any applicable Law or otherwise afforded to the Bank shall be
cumulative and not alternative.

         7.4 Governing Law and Jurisdiction.

         THIS GUARANTEE IS GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAW OF
BARBADOS.

         7.5 Submission.

         (a)      For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of Barbados are to have jurisdiction to
settle any claims or disputes arising under, out of or in connection with this
Guarantee (including without limitation any claim or dispute relating to the
validity, interpretation, performance, termination or enforcement of this
Guarantee) and that accordingly any suit, action or proceedings in that respect
(together in this Section 7 referred to as "PROCEEDINGS") may be brought in such
courts.

         (b)      The Guarantor irrevocably waives and agrees not to raise any
objection which it may have now or hereafter to the laying of the venue of any
Proceedings in the courts of Barbados and any claim that any such Proceedings
have been brought in an inconvenient or inappropriate forum.

         (c)      The Guarantor irrevocably agrees not to take Proceedings in
any court of competent jurisdiction other than the courts of Barbados, save with
respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take Proceedings against

<PAGE>

the Guarantor in any other court of competent jurisdiction, nor shall the taking
of Proceedings in one or more jurisdictions preclude the taking of Proceedings
in any other jurisdiction, whether concurrently or not.

         7.6 Judgments and Immunity.

         (a)      The Guarantor recognizes and acknowledges that this Guarantee
constitutes a commercial transaction and accordingly it acknowledges and agrees
that it is not entitled to plead, and hereby waives to the fullest extent
permitted by law any right to claim, sovereign immunity for any purpose
whatsoever, including, but not limited to, any right to plead sovereign immunity
in respect of any Proceedings pursuant to this Guarantee.

         (b)      The Guarantor consents generally, in respect of any
Proceedings pursuant to this Guarantee for the purpose of enforcing any order,
judgment or award, to the giving of any relief or the issuing of any process in
connection with such order, judgment or award including, without limitation, the
making, enforcement or execution against any property of any order, judgment or
award and to the extent that the Guarantor may be entitled in any jurisdiction
to claim for itself or its property immunity in respect of its obligations under
this Guarantee from any suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or legal process or to the extent that
in any jurisdiction there may be attributed to itself or its property such
immunity, the Guarantor agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.

         (c)      The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a "JUDGMENT"), that:

                  (i)      the Judgment shall be conclusive and binding upon it;

                  (ii)     it shall be bound by and recognize the Judgment in
                           any jurisdiction;

                  (iii)    to the extent permitted by law, it shall not claim,
                           invoke on its behalf or for its benefit any right it
                           may have under the laws of Barbados or any other
                           state or jurisdiction, to prevent, delay, hinder,
                           nullify or in any other way obstruct the enforcement
                           or execution of the Judgment; and

                  (iv)     to the extent permitted by law, it shall not, and
                           shall irrevocably waive any right to, challenge the
                           Judgment on any ground or the enforcement or
                           execution of the Judgment in any jurisdiction (other
                           than by way of appeal in the original jurisdiction).

         7.7 Benefit of Guarantee.

         This Guarantee shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto. The Guarantor may not assign or otherwise transfer any of its rights
under this Guarantee or any of the other Financing Documents. The benefit of
this Guarantee may be freely and unconditionally assigned, transferred or
otherwise disposed of, in whole or in part, by the Bank to any other person,
corporate or otherwise, to whom the Bank has assigned all or part of its rights
under the Loan Agreement.

<PAGE>

         7.8 Expenses.

         The Guarantor shall be liable to pay to the Bank the costs and expenses
incurred by the Bank in relation to the enforcement or protection or attempted
enforcement or protection of its rights under this Guarantee, including legal
and other professional consultants' fees on a full indemnity basis.

         7.9 Amendment or Waiver.

         No provision of this Guarantee may be amended, supplemented, modified
or waived, except by a written instrument signed by the Bank and the Guarantor.

         7.10 Counterparts.

         This Guarantee may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

         7.11 Set-off.

         The Guarantor authorizes the Bank or any of its subsidiaries and
affiliates (which shall not be obliged to exercise this right) to apply any
credit balance to which the Guarantor is entitled on any account of the
Guarantor with the Bank or any or its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank is
authorized to purchase with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such application.

         7.12 Currency Indemnity.

         If any sum due under this Guarantee or any order or judgment given or
made in relation to this Guarantee has to be converted from the currency (the
"FIRST CURRENCY") in which the same is payable under this Guarantee or under
such order or judgment into another currency (the "SECOND CURRENCY") for the
purpose of (a) making or filing a claim or proof against the Guarantor, (b)
obtaining an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to this Guarantee, the Guarantor
shall indemnify and hold harmless the Bank from and against any loss it suffers
or incurs as a result of any discrepancy between (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency, and (ii) the rate or rates of exchange at which the Bank may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.

                                  *      *

<PAGE>

 IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
 hereto and is delivered on the date stated at the beginning of this Guarantee.

                                           DESALCO (BARBADOS) LTD.

                                           By: /s/ Mr. Jeffrey Parker
                                               ---------------------------------
                                               Name:  Mr. Jeffrey Parker
                                               Title: Chief Executive Officer

                                           Notice Address:
                                           Address:
                                           Consolidated Water Co. Ltd.
                                           P.O. Box 1114GT
                                           Trafalgar House
                                           Grand Cayman

                                           Attention: Mr. Jeffrey Parker

                                           Telephone No.: 345 945-4277
                                           Telecopier No. 345 949-2957

                                           SCOTIABANK (CAYMAN ISLANDS) LTD.

                                           By: /s/ Mr. Bruce John
                                               ---------------------------------
                                               Name: Mr. Bruce John
                                               Title: Commercial Banking Manager

                                           Notice Address:
                                           Address:
                                           Scotiabank (Cayman Islands) Ltd.
                                           Scotia Centre
                                           Cardinal Avenue
                                           P.O. Box 689
                                           Grand Cayman

                                           Attention: Commercial Banking Manager

                                           Telephone No.: 345 949-7666
                                           Telecopier No. 345 949-5130

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.41
<SEQUENCE>21
<FILENAME>g80228exv10w41.txt
<DESCRIPTION>GUARANTEE FROM DESALCO LIMITED
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.41

================================================================================

                                   GUARANTEE

                                       by

                                DESALCO LIMITED

                                  IN FAVOUR OF

                        SCOTIABANK (CAYMAN ISLANDS) LTD.

                      Dated the 7th day of February, 2003

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                 <C>
SECTION 1. DEFINITIONS AND INTERPRETATION ......................................     2
         1.1 General Definitions ...............................................     2
         1.2 Interpretation ....................................................     3
SECTION 2. GUARANTEE ...........................................................     3
         2.1 Guarantor Guaranteed Obligations ..................................     3
         2.2 Continuing Guarantee ..............................................     3
         2.3 Payment of Guaranteed Obligations .................................     4
         2.4 No Set-off ........................................................     4
         2.5 Taxes .............................................................     4
         2.6 Application of Payments ...........................................     4
SECTION 3. SAVING PROVISIONS ...................................................     5
         3.1 Change in Guaranteed Obligations ..................................     5
         3.2 Waiver of Defenses ................................................     5
         3.3 Immediate Recourse ................................................     6
         3.4 Non-Competition ...................................................     6
         3.5 Bankruptcy or Liquidation of the Borrower .........................     6
         3.6 Appropriation of Moneys ...........................................     6
         3.7 Reinstatement .....................................................     6
         3.8 Additional Security ...............................................     7
SECTION 4. INDEMNITY ...........................................................     7
         4.1 Indemnity .........................................................     7
SECTION 5. REPRESENTATIONS AND WARRANTIES ......................................     7
         5.1 Representations and Warranties ....................................     7
         5.2 Bank's Reliance ...................................................     8
         5.3 Rights and Remedies not Limited ...................................     8
SECTION 6. COVENANTS ...........................................................     8
         6.1 Guarantor Covenants ...............................................     8
SECTION 7. MISCELLANEOUS .......................................................     9
         7.1 Notices ...........................................................     9
         7.2 English Language ..................................................     9
         7.3 No Waiver; Remedies Cumulative ....................................    10
         7.4 Governing Law and Jurisdiction ....................................    10
         7.5 Submission ........................................................    10
         7.6 Judgments and Immunity ............................................    10
         7.7 Benefit of Guarantee ..............................................    11
         7.8 Expenses ..........................................................    11
         7.9 Amendment or Waiver ...............................................    12
         7.10 Counterparts .....................................................    12
         7.11 Set-off ..........................................................    12
         7.12 Currency Indemnity ...............................................    12
</TABLE>

<PAGE>

         THIS GUARANTEE ("GUARANTEE"), dated the 7th day of February, 2003, is
made as a deed by:

(1)      DESALCO LIMITED., a company organized and existing under the laws of
the Cayman Islands ("GUARANTOR");

in favour of

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").

Defined terms used herein shall have the meanings specified in Section 1.

         WHEREAS:

         (A)      Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").

         (B)      It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.

         (C)      The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.

         (D)      To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.

         (I)      The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.

         NOW, THEREFORE, the parties agree as follows:

         SECTION 1. DEFINITIONS AND INTERPRETATION.

         1.1 General Definitions.

                  (a) Unless the context otherwise requires, capitalized terms
used in this Guarantee without definition have the meanings specified in Annex A
to the Loan Agreement.

                  (b) In addition, wherever used in this Guarantee, unless the
context otherwise requires, the following terms have the meaning opposite it:

         "FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

         "GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Financing Documents, and in any
capacity, irrespective of whether such liabilities and obligations:

                           (i)      are present or future;

                           (ii)     are actual, contingent or otherwise;

<PAGE>

                           (iii)    are at any time ascertained or
                                    unascertained;

                           (iv)     are owed or incurred by or on account of the
                                    Borrower alone, or severally or jointly with
                                    any other person;

                           (v)      are owed or incurred as principal, interest,
                                    fees, charges, taxes, duties or other
                                    imports, damages (whether for breach of
                                    contract or tort or incurred on any other
                                    ground), losses, costs or expenses, or on
                                    any other account; or

                           (vi)     comprise any combination of the above.

         provided that the Guaranteed Obligations shall be limited to the lesser
of: (i) the total amount outstanding under the Financing Documents; and (ii) the
maximum amount of indebtedness and liability of the Borrower that the Guarantor
is able to guarantee and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.

         1.2 Interpretation.

         The rules of interpretation set forth in Section 18.13 of the Loan
Agreement shall apply to this Guarantee.

         SECTION 2. GUARANTEE.

         2.1 Guarantor Guaranteed Obligations.

         The Guarantor irrevocably and absolutely, as principal obligor and not
merely as surety, guarantees and promises to pay, upon demand of the Bank, the
Guaranteed Obligations not paid or performed by the Borrower when due in the
same manner in all respects as the Guaranteed Obligations are required to be
paid or performed by the Borrower.

         2.2 Continuing Guarantee.

         (a)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee is a continuing obligation of the Guarantor (and all liabilities
to which it applies or may apply under the terms of this Guarantee shall be
conclusively presumed to have been created in reliance on such guarantee),
notwithstanding any settlement of account or the occurrence of any other thing,
and shall remain in full force and effect until:

                  (i)      the Guaranteed Obligations have been fully paid or
                           performed strictly in accordance with the provisions
                           of the Financing Documents, regardless of any
                           intermediate payment or discharge in whole or in
                           part; and

                  (ii)     all of the obligations of the Guarantor under this
                           Guarantee have been fully performed in accordance
                           with this Guarantee.

         (b)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall be additional, separate and independent obligations of the
Guarantor.

<PAGE>

         (c)      The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall survive the termination of the Financing Documents.

         (d)      The Guarantor's obligations under this Guarantee can be
discharged only by performance and then only to the extent of such performance.
Those obligations are not subject to any prior notice to, demand upon or action
against the Borrower or any other Person or to any prior notice to the Guarantor
of any default by the Borrower.

         2.3 Payment of Guaranteed Obligations.

         The Guarantor shall make payment of the Guaranteed Obligations under
Section 2.1 (Guarantor Guaranteed Obligations) as provided in the relevant
Financing Documents.

         2.4 No Set-off.

         All payments which the Guarantor is required to make under this
Guarantee shall be without any set-off, counterclaim or condition.

         2.5 Taxes.

         (a)      The Guarantor shall pay or cause to be paid all present and
future taxes, duties, fees and other charges of whatsoever nature (excluding
income taxes), if any, now or in the future levied or imposed by any
Governmental Authority or similar body in the jurisdiction in which the
Guarantor is located or out of which a payment is made on or in connection with
the payment of any and all amounts due under this Guarantee.

         (b)      All payments due under this Guarantee shall be made without
deduction for or on account of any such taxes, duties, fees or other charges.

         (c)      If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made such payments without deduction, the amounts
due under this Guarantee shall be increased to such amount as may be necessary
so that the Bank receives the full amount it would have received (taking into
account any such taxes, duties, fees or other charges payable on amounts payable
by the Guarantor under this subsection) had such payments been made without such
deduction.

         (d)      If subsection (c) above applies and the Bank so requires, the
Guarantor shall deliver to the Bank official tax receipts evidencing payment (or
certified copies of them) within thirty (30) days of the date of payment.

         2.6 Application of Payments.

         The Bank may apply any amounts received by it or recovered under:

         (a)      any Security Document; and

         (b)      any other document or agreement which is a security for any of
the Guaranteed Obligations and any other moneys,

in such manner as it determines in its absolute discretion in accordance with
the Financing Documents.

<PAGE>

         SECTION 3. SAVING PROVISIONS.

         3.1 Change in Guaranteed Obligations.

         The obligations of the Guarantor under this Guarantee shall extend to
any change in the Guaranteed Obligations:

         (a)      as a result of any amendment, supplement, renewal or
replacement of any Financing Document or the occurrence of any other thing; and

         (b)      regardless of whether the Guarantor is aware of, has consented
to or is given notice of any alteration, variation, amendment, supplement,
renewal or replacement of any Financing Document or the occurrence of such other
thing.

         3.2 Waiver of Defenses.

         Except for payment or performance in full of the Guaranteed
Obligations, the payment in full by the Guarantor of its obligations under this
Guarantee or otherwise as provided in this Guarantee, the Guarantor's
obligations under this Guarantee shall not be discharged, impaired or otherwise
adversely affected by any act, omission, circumstance, matter or thing which,
but for this provision, would reduce, release or prejudice any of its
obligations under this Guarantee or which might otherwise constitute a legal or
equitable discharge or defense of a surety or a guarantor, including (whether or
not known to the Guarantor or the Borrower):

         (a)      any time, waiver, composition, forbearance or concession given
to the Borrower or any other person;

         (b)      any assertion of, or failure to assert, or delay in asserting,
any right, power or remedy against the Borrower or any other person, or in
respect of any security for the Loans;

         (c)      any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Financing Document or of any other
agreement or security between the Bank and the Borrower;

         (d)      any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order;

         (e)      the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;

         (f)      any purported or actual assignment, transfer, novation or
disposal of, or granting any participation in, any of the Loans to any other
party;

         (g)      any Financing Document being in whole or in part illegal,
void, voidable, avoided, invalid, unenforceable or otherwise of limited force
and effect; or

         (h)      any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
in respect of the Guaranteed Obligations or any of them.

<PAGE>

         3.3 Immediate Recourse.

         The Guarantor waives any right it may have of first requiring the Bank
(or any trustee, agent or other person acting on its behalf) to proceed against
or enforce any other rights or security or claim payment from any person before
claiming from the Guarantor under this Guarantee.

         3.4 Non-Competition.

         (a)      If any amounts have become payable or have been paid by the
Guarantor under this Guarantee, the Guarantor shall not, in respect of such
moneys, seek to enforce repayment, obtain the benefit of any security or
exercise any other rights or legal remedies of any kind which may accrue to the
Guarantor against the Borrower, whether by way of subrogation, offset,
counterclaim or otherwise, in respect of the amount so payable or so paid (or in
respect of any other moneys for the time being due to the Guarantor from the
Borrower), if and for so long as any moneys remain outstanding to the Bank under
the Financing Documents. The Guarantor shall hold in trust for, and forthwith
pay or transfer to, the Bank any payment or distribution or benefit of security
received by it contrary to this Section 3.4(a).

         (b)      Upon the payment and satisfaction in full of all Guaranteed
Obligations and provided that no amounts (actual or contingent) remain
outstanding to the Bank under the Loan Agreement, the Guarantor, if it has made
a payment under this Guarantee, shall be entitled to exercise its rights of
subrogation to its proportion of all relevant rights of the Bank against the
Borrower pursuant to the Financing Documents. The Bank shall promptly execute,
at the expense of the Guarantor, an assignment and such other documents in such
form as the Guarantor may reasonably request to transfer such proportion of such
rights of the Bank against the Borrower to the Guarantor as are required for the
Guarantor to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not in the
name of the Bank.

         3.5 Bankruptcy or Liquidation of the Borrower.

         If the Borrower becomes bankrupt, enters into a composition or makes
any arrangement with its creditors, or is dissolved, liquidated or wound up, the
Guarantor shall not claim, rank, prove or vote as a creditor of the Borrower or
its estate in competition with the Bank in respect of any amounts owing to the
Guarantor by the Borrower on any account whatsoever, but instead shall give the
Bank the benefit of any such proof and of all amounts to be received in respect
of that proof until all Guaranteed Obligations have been fully paid.

         3.6 Appropriation of Moneys.

         Until all of the Guaranteed Obligations have been irrevocably paid in
full, the Bank (or any trustee, agent or other person acting on its behalf) may
refrain from enforcing any other moneys, security or rights held or received by
the Bank (or such trustee, agent or other person) in respect of the Guaranteed
Obligations, or apply and enforce the same in such manner and order as it sees
fit.

         3.7 Reinstatement.

         (a)      Where any discharge (whether in respect of the obligations of
the Borrower, the Guarantor or any security for those obligations or otherwise)
is made in whole or in part or any

<PAGE>

arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be restored on insolvency, liquidation or otherwise
without limitation, the liability of the Guarantor under this Guarantee shall
continue or shall be reinstated (as the case may be) as if such discharge or
arrangement had not occurred.

         (b)      The Bank (or any trustee, agent or other person acting on its
behalf) may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.

         3.8 Additional Security.

         This Guarantee is in addition to and is not in any way prejudiced by
any collateral or other security now or hereafter held by the Bank, nor shall
such collateral or other security held by the Bank or the liability of any
person for all or any part of the Guaranteed Obligations be in any manner
prejudiced or affected by this Guarantee.

         SECTION 4. INDEMNITY.

         4.1 Indemnity.

         The Guarantor agrees as a primary obligor and not merely as a surety,
to indemnify and hold harmless the Bank from and against any loss, cost or
damage incurred by the Bank as a result of any obligation of the Guarantor
hereunder as guarantor being or becoming void, voidable, unenforceable or
otherwise ineffective against the Guarantor for any reason whatsoever (whether
or not known to the Bank or any other Person), the amount of such loss being
limited to the amount that the Bank would have been entitled to recover from the
Guarantor as guarantor pursuant to this Guarantee had such obligations not
become void, voidable, unenforceable or otherwise ineffective against the
Guarantor.

         SECTION 5. REPRESENTATIONS AND WARRANTIES.

         5.1 Representations and Warranties.

         The Guarantor represents and warrants to the Bank that as of the date
of this Guarantee and on each Drawdown Date:

         (a)      it is a company duly incorporated under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into and
deliver and to perform its obligations under this Guarantee;

         (b)      the execution and delivery by it of this Guarantee and the
performance by it of its obligations hereunder have been duly authorized;

         (c)      it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;

         (d)      neither the execution and delivery by it of this Guarantee nor
the performance by it of its obligations under this Guarantee:

                  (i)      conflicts with or will conflict with or result in any
                           breach of any of the terms, conditions or provisions
                           of, or violate or constitute a default or require any
                           consent under, any indenture, mortgage, agreement or
                           other

<PAGE>

                           instrument or arrangement to which it is a party or
                           which binds or purports to be binding upon it; or

                  (ii)     violates or will violate any judgment, decree or
                           order or any statute, rule or regulation or any of
                           the terms or provisions of its Charter;

         (e)      all authorizations required for the execution and delivery of
this Guarantee by it and the performance by it of its obligations hereunder have
been duly obtained or granted and are in full force and effect;

         (f)      it has not requested or taken any security from the Borrower
for any obligation (whether present or future, actual or contingent) of the
Borrower to it; and

         (g)      the representations and warranties set out in this Section 5.1
(Representations and Warranties) will survive the execution of each Financing
Document and each Disbursement under the Financing Documents.

         5.2 Bank's Reliance.

         The Guarantor acknowledges that it makes the representations in Section
5.1 (Representations and Warranties) with the intention of inducing the Bank to
enter into this Guarantee and the Financing Documents and that the Bank enters
into this Guarantee and the Financing Documents on the basis of, and in full
reliance on, each of such representations.

         5.3 Rights and Remedies not Limited.

         The Bank's rights and remedies in relation to any misrepresentation or
breach of warranty on the part of the Guarantor are not prejudiced:

         (a)      by any investigation by or on behalf of the Bank into the
affairs of the Guarantor;

         (b)      by the execution or the performance of this Guarantee; or

         (c)      by any other act or thing which may be done by or on behalf of
the Bank in connection with this Guarantee and which might, apart from this
Section, prejudice such rights or remedies.

         SECTION 6. COVENANTS.

         6.1 Guarantor Covenants.

                  The Guarantor shall:

         (a)      when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank under this
Guarantee including, but not limited to, the execution of any document or
agreement;

         (b)      obtain, maintain and renew when necessary all authorizations
required under any law or document or agreement:

                  (i)      to enable it to perform its obligations under this
                           Guarantee; or

<PAGE>

                  (ii)     for the validity or enforceability of the guarantee;

         (c)      not take any action which may impair the ability of the
Borrower to observe and perform all of its covenants, agreements and obligations
under or pursuant to the Financing Documents;

         (d)      take such action as may be necessary or as the Bank may
reasonably request in order to:

                  (i)      comply with its obligations under this Guarantee; and

                  (ii)     cause the Borrower to the extent possible to take
                           such corporate action as may be necessary to comply
                           with its respective obligations under the Financing
                           Documents;

         (e)      the Guarantor shall not take any action which would cause any
of the representations made in Section 5.1 (Representations and Warranties) to
be untrue at any time during the continuation of this Guarantee.

         SECTION 7. MISCELLANEOUS.

         7.1 Notices.

         (a)      All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Guarantor by facsimile (i) shall be promptly
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof by express courier) and faxed or delivered, to the address
or facsimile number specified for notices on the applicable signature page
hereof or to such other address as shall be designated by such party in a
written notice to the other parties hereto.

         (b)      All such notices, requests, approvals, consents and
communications (i) sent by express courier will be effective upon delivery to or
refusal to accept delivery by the addressee, and (ii) transmitted by facsimile
will be effective when sent and facsimile confirmation received; except that all
notices and other communications to any Agent shall not be effective until
actually received.

         (c)      The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall not have any liability to the
Guarantor or other Person on account of any action taken or not taken by the
Bank in reliance upon such telephonic or facsimile notice.

         (d)      All notices, requests and other communications hereunder and
under the other Financing Documents shall be in the English language.

         7.2 English Language.

         This Guarantee and all other Financing Documents shall be in the
English language. Except as otherwise agreed by the parties hereto, all
documents, certificates, reports or notices

<PAGE>

to be delivered or communications to be given or made by any party hereto
pursuant to the terms of this Guarantee or any other Financing Document shall be
in the English language.

         7.3 No Waiver; Remedies Cumulative.

         No failure or delay on the part of the Bank or the holder of any Note
in exercising any right, power or privilege hereunder or under any other
Financing Document and no course of dealing between the Guarantor and the Bank
or the holder of any Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Financing Document preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder or thereunder. No
notice to or demand on the Guarantor in any case shall entitle the Guarantor to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank or the holder of any Note to take
any other or further action in any circumstances without notice or demand. All
remedies, either under this Guarantee or any other Financing Document or
pursuant to any applicable Law or otherwise afforded to the Bank shall be
cumulative and not alternative.

         7.4 Governing Law and Jurisdiction.

         THIS GUARANTEE IS GOVERNED AND CONSTRUED IN ACCORDACE WITH THE LAW OF
THE CAYMAN ISLANDS.

         7.5 Submission.

         (a)      For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of Cayman Islands are to have jurisdiction to
settle any claims or disputes arising under, out of or in connection with this
Guarantee (including without limitation any claim or dispute relating to the
validity, interpretation, performance, termination or enforcement of this
Guarantee) and that accordingly any suit, action or proceedings in that respect
(together in this Section 7 referred to as "PROCEEDINGS") may be brought in such
courts.

         (b)      The Guarantor irrevocably waives and agrees not to raise any
objection which it may have now or hereafter to the laying of the venue of any
Proceedings in the courts of the Cayman Islands and any claim that any such
Proceedings have been brought in an inconvenient or inappropriate forum.

         (c)      The Guarantor irrevocably agrees not to take Proceedings in
any court of competent jurisdiction other that the courts of the Cayman Islands,
save with respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take Proceedings against the Guarantor in
any other court of competent jurisdiction, nor shall the taking of Proceedings
in one or more jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.

         7.6 Judgments and Immunity.

         (a)      The Guarantor recognizes and acknowledges that this Guarantee
constitutes a commercial transaction and accordingly it acknowledges and agrees
that it is not entitled to plead, and hereby waives to the fullest extent
permitted by law any right to claim, sovereign

<PAGE>

immunity for any purpose whatsoever, including, but not limited to, any right to
plead sovereign immunity in respect of any Proceedings pursuant to this
Guarantee.

         (b)      The Guarantor consents generally, in respect of any
Proceedings pursuant to this Guarantee for the purpose of enforcing any order,
judgment or award, to the giving of any relief or the issuing of any process in
connection with such order, judgment or award including, without limitation, the
making, enforcement or execution against any property of any order, judgment or
award and to the extent that the Guarantor may be entitled in any jurisdiction
to claim for itself or its property immunity in respect of its obligations under
this Guarantee from any suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or legal process or to the extent that
in any jurisdiction there may be attributed to itself or its property such
immunity, the Guarantor agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.

         (c)      The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a "JUDGMENT"), that:

                  (i)      the Judgment shall be conclusive and binding upon it;

                  (ii)     it shall be bound by and recognize the Judgment in
                           any jurisdiction;

                  (iii)    to the extent permitted by law, it shall not claim,
                           invoke on its behalf or for its benefit any right it
                           may have under the laws of the Cayman Islands, or any
                           other state or jurisdiction, to prevent, delay,
                           hinder, nullify or in any other way obstruct the
                           enforcement or execution of the Judgment; and

                  (iv)     to the extent permitted by law, it shall not, and
                           shall irrevocably waive any right to, challenge the
                           Judgment on any ground or the enforcement or
                           execution of the Judgment in any jurisdiction (other
                           than by way of appeal in the original jurisdiction).

         7.7 Benefit of Guarantee.

         This Guarantee shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto. The Guarantor may not assign or otherwise transfer any of its rights
under this Guarantee or any of the other Financing Documents. The benefit of
this Guarantee may be freely and unconditionally assigned, transferred or
otherwise disposed of, in whole or in part, by the Bank to any other person,
corporate or otherwise, to whom the Bank has assigned all or part of its rights
under the Loan Agreement.

         7.8 Expenses.

         The Guarantor shall be liable to pay to the Bank the costs and expenses
incurred by the Bank in relation to the enforcement or protection or attempted
enforcement or protection of its rights under this Guarantee, including legal
and other professional consultants' fees on a full indemnity basis.

<PAGE>

         7.9 Amendment or Waiver.

         No provision of this Guarantee may be amended, supplemented, modified
or waived, except by a written instrument signed by the Bank and the Guarantor.

         7.10 Counterparts.

         This Guarantee may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

         7.11 Set-off.

         The Guarantor authorizes the Bank or any of its subsidiaries and
affiliates (which shall not be obliged to exercise this right) to apply any
credit balance to which the Guarantor is entitled on any account of the
Guarantor with the Bank or any of its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank is
authorized to purchase with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such application.

         7.12 Currency Indemnity.

         If any sum due under this Guarantee or any order or judgment given or
made in relation to this Guarantee has to be converted from the currency (the
"FIRST CURRENCY") in which the same is payable under this Guarantee or under
such order or judgment into another currency (the "SECOND CURRENCY") for the
purpose of (a) making or filing a claim or proof against the Guarantor, (b)
obtaining an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to this Guarantee, the Guarantor
shall indemnify and hold harmless the Bank from and against any loss it suffers
or incurs as a result of any discrepancy between (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency, and (ii) the rate or rates of exchange at which the Bank may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.

                                 *     *

<PAGE>

 IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
 hereto and is delivered on the date stated at the beginning of this Guarantee.

                                           DESALCO LIMITED

                                           By: /s/ Mr. Jeffrey Parker
                                               ---------------------------------
                                               Name: Mr. Jeffrey Parker
                                               Title: Chief Executive Officer

                                           Notice Address:
                                           Address:
                                           P.O. Box 1114 GT
                                           Trafalgar House
                                           Grand Cayman, Cayman Islands.
                                           Attention: Mr. Jeffrey Parker

                                           Telephone No.: 345 945-4277
                                           Telecopier No. 345 949-2957

                                           SCOTIABANK (CAYMAN) LTD.

                                           By: /s/ Mr. Bruce John
                                               ---------------------------------
                                               Name:  Mr. Bruce John
                                               Title: Commercial Banking Manager

                                           Notice Address:
                                           Address:
                                           Scotiabank (Cayman Islands) Ltd.
                                           Scotia Centre
                                           Cardinal Avenue
                                           P.O. Box 689
                                           Grand Cayman

                                           Attention: Commercial Banking Manager

                                           Telephone No.: 345 949-7666
                                           Telecopier No. 345 949-5130

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>22
<FILENAME>g80228exv10w42.txt
<DESCRIPTION>EQUITABLE CHARGE OF SHARES
<TEXT>
<PAGE>

                                                                  EXHIBIT 10.42

                          THE 7TH DAY OF FEBRUARY, 2003

                           EQUITABLE CHARGE OF SHARES
      (Collateral to a Substituted Debenture bearing even date herewith and
            entered into between the Borrower and the Secured Party)

                                    BETWEEN

                                 DESALCO LIMITED

                                      AND

                        SCOTIABANK (CAYMAN ISLANDS) LTD.
                                as Secured Party

                         with respect to the shares in

                         OCEAN CONVERSION (BVI) LIMITED

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
1.       INTERPRETATION ...................................................    1

         1.1      Definitions .............................................    1
         1.2      Interpretation ..........................................    2
         1.3      Continuing Events of Default ............................    2
         1.4      Certificates ............................................    2
         1.5      Statutes ................................................    3
         1.6      Implied Covenants .......................................
         1.7      Nominees ................................................    3
         1.8      Clause and Schedule Headings ............................    3
2.       EQUITABLE CHARGE .................................................    3

         2.1      Charge ..................................................    3
         2.2      Deposit of Share Certificates ...........................    3
         2.3      Further Shares ..........................................    3
3.       DIVIDENDS, VOTING AND INFORMATION ................................    4

         3.1      Security not Enforceable ................................    4
         3.2      Security Enforceable ....................................    4
         3.3      Information .............................................    5
4.       CONTINUING SECURITY ..............................................    5

         4.1      Continuing and Independent Security .....................    5
         4.2      Avoidance of Payments ...................................    5
         4.3      Immediate Recourse ......................................    5
         4.4      Waiver of Defences ......................................    5
         4.5      No Competition...........................................    6
         4.6      Appropriation ...........................................    6
         4.7      Subrogation .............................................    6
5.       REPRESENTATIONS AND WARRANTIES ...................................    6

         5.1      Status and Due Authorisation ............................    7
         5.2      Binding Obligations .....................................    7
         5.3      All Actions Taken .......................................    7
         5.4      No Deductions or Withholdings ...........................    7
         5.5      No Filing or Stamp Taxes ................................    7
         5.6      No Winding-up ...........................................    7
         5.7      No Adverse Interests ....................................    7
         5.8      No Disposals ............................................    8
         5.9      No Conflicts ............................................    8
         5.10     The Charged Shares ......................................    8
         5.11     Choice of Law ...........................................    8
         5.12     No Security from the Borrower ...........................    8
</TABLE>

                                      (ii)

<PAGE>

<TABLE>
<S>                                                                           <C>
         5.13     Repetition ..............................................    8
6.       UNDERTAKINGS .....................................................    9

         6.1      Authorisations ..........................................    9
         6.2      No Action ...............................................    9
         6.3      Notification of Misrepresentation .......................    9
         6.4      No Variation or Release .................................    9
         6.5      No Action to Jeopardise Security Constituted Hereby .....    9
7.       FURTHER ASSURANCE ................................................    9

8.       ENFORCEMENT OF SECURITY ..........................................    9

         8.1      Security Enforceable ....................................    9
         8.2      Enforcement .............................................   10
         8.3      Power of Sale ...........................................   10
         8.4      Statutory Powers ........................................   10
         8.5      Realisation Accounts ....................................
         8.6      Registration of Shares ..................................   10
9.       RECEIVERS ........................................................   10

         9.1      Appointment .............................................   10
         9.2      Scope of Appointment ....................................   11
         9.3      Powers of a Receiver ....................................   11
         9.4      Conflict ................................................   11
         9.5      Security Trustee of Borrower ............................   11
         9.6      Remuneration ............................................   11
10.      APPLICATION OF PROCEEDS ..........................................   12

11.      POWER OF ATTORNEY ................................................   12

         11.1     Appointment .............................................   12
         11.2     Ratification ............................................   12
12.      RELEASE OF THE SECURITY ..........................................   12

13.      PAYMENTS .........................................................

14.      COSTS AND EXPENSES ...............................................   12

         14.1     Transaction Costs .......................................   12
         14.2     Stamp Tax ...............................................   12
         14.3     Indemnity ...............................................   13
15.      NO WAIVER; REMEDIES CUMULATIVE ...................................   13

16.      ADDITIONAL PROVISIONS ............................................   13

         16.1     Severability ............................................   13
         16.2     Currency Conversion .....................................   13
         16.3     Judgment Currency .......................................   13
</TABLE>

                                     (iii)

<PAGE>

<TABLE>
<S>                                                                           <C>
         16.4     Rights Cumulative .......................................   14
         16.5     Mortgagee in Possession .................................   14
17.      ASSIGNMENT .......................................................   14

         17.1     The Borrower's Rights ...................................   14
         17.2     The Secured Party's Rights ..............................   15
18.      NOTICES ..........................................................   15

19.      GOVERNING LAW AND JURISDICTION ...................................   15

20.      SUBMISSION .......................................................   15

21.      Judgments and Immunity ...........................................   16

22.      COUNTERPARTS AND EFFECTIVENESS ...................................   17

         22.1     Counterparts ............................................   17
         22.2     Effectiveness ...........................................   17
23.      AMENDMENT OR WAIVER ..............................................   17

THE SCHEDULE The Initially Charged Shares .................................
</TABLE>

                                      (iv)

<PAGE>

THIS COLLATERAL CHARGE ("CHARGE") is made on the 7th day of February, 2002
between the following parties:

(1)      DESALCO LIMITED, a company incorporated in the Cayman Islands, with its
         registered office located in George Town, Grand Cayman, Cayman Islands,
         (the "DESALCO"); and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. a banking institution organised and
         existing under the laws of the Cayman Islands, with its principal place
         of business located at Scotiabank Centre, Cardinal Avenue, Georgetown,
         Grand Cayman (the "SECURED PARTY").

RECITALS

A.       The Borrower currently holds one hundred percent (100%) of the shares
         of DesalCo who, in turn, holds one hundred percent (100%) of the class
         "A" shares and one hundred percent (100%) of the class "C" shares of
         Ocean Conversion (BVI) Limited (the "COMPANY").

B.       The Secured Party has agreed to provide certain loans to the Borrower.

C.       Such loans will be made subject to the terms and conditions of a Loan
         Agreement, dated the date hereof, among the Borrower and the Secured
         Party (the "LOAN AGREEMENT").

D.       It is a condition to the first disbursement under the Loan Agreement
         that DesalCo shall have entered into this Charge.

E.       The Boards of Directors of DesalCo are satisfied that the DesalCo is
         entering into this Charge for the purpose of its business and that by
         doing so it benefits DesalCo.

F.       DesalCo and the Secured Party intend this Charge to take effect as a
         deed.

G.       This Collateral Charge is intended to be collateral to a Substituted
         Debenture bearing even date herewith entered into between the Borrower
         and the Secured Party and shall be stamped as such.

1.       INTERPRETATION

1.1      DEFINITIONS

(a)      Capitalized terms used in this Charge without definition have the
         meanings specified in Annex A to the Loan Agreement.

(b)      In addition the following terms in this Charge have the meanings given
         to them in this Clause.

"CHARGED SHARES" means any shares from time to time forming part of the Secured
Property.

<PAGE>

"FINANCING DOCUMENTS" means collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

"INITIALLY CHARGED SHARES" means all the class "A" shares in the Company of
which the DesalCo is the beneficial or registered owner on the date of this
Charge.

"OBLIGATIONS" shall mean, collectively, all loans, advances, debts, liabilities,
and obligations, howsoever arising, owed by the Borrower under a Financing
Document or otherwise to the Secured Party.

"RECEIVER" means an administrative receiver, a receiver and manager or any other
receiver (whether appointed pursuant to this Charge, pursuant to any statute, by
a court or otherwise) of the Secured Property or any part of it.

"SECURED OBLIGATIONS" means all present and future Obligations.

"SECURED PROPERTY" means the Initially Charged Shares and any other shares in
the Company, other than the class "C" shares of the Company, of which DesalCo is
or becomes the beneficial or registered owner together with all dividends,
stocks, shares, warrants, securities, rights, monies or other property accruing
on or derived from such shares.

"SECURITY" means the security created by this Charge.

"SECURITY PERIOD" means the period beginning on the date of this Charge and
ending on the date upon which:

(a)      the Secured Party is under no obligation (whether actual or contingent)
         to make advances or provide other financial accommodation to the
         Borrower under any of the Financing Documents; and

(b)      all Secured Obligations have been unconditionally and irrevocably paid
         and discharged in full.

1.2      INTERPRETATION

The principles of interpretation set forth in Section 18.13 to the Loan
Agreement shall apply to this Charge.

1.3      CONTINUING EVENTS OF DEFAULT

An event which constitutes an Event of Default shall be regarded as continuing
if (a) the circumstances constituting such event continue and (b) the Secured
Party has not waived such of its rights under the Financing Documents as arise
as a result of the occurrence of that event.

1.4      CERTIFICATES

A certificate of the Secured Party as to the amount of any Secured Obligation
owed to it shall be prima facie evidence of the existence and amount of such
Secured Obligation.

                                      -2-

<PAGE>

1.5      STATUTES

Any reference in this Charge to a statute or statutory provision shall, unless
the contrary is indicated, be construed as a reference to such statute or
statutory provision as the same shall have been or may be amended or re-enacted.

1.6      NOMINEES

If the Secured Party causes or requires the Charged Shares to be registered in
the name of a nominee for the Secured Party, any reference in this Charge to the
Secured Party shall, if the context so permits or requires, be construed as a
reference to the Secured Party and such nominee.

1.7      CLAUSE AND SCHEDULE HEADINGS

Clause and Schedule headings are for ease of reference only and shall not affect
the construction of this Charge.

2.       EQUITABLE CHARGE

2.1      CHARGE

DesalCo hereby charges with full title guarantee the Secured Property to the
Secured Party to hold the same on trust as security for the payment and
discharge of the Secured Obligations.

2.2      DEPOSIT OF SHARE CERTIFICATES

Immediately upon execution of this Charge and as a condition to the initial
disbursement under the Loan Agreement, DesalCo shall deposit with the Secured
Party all share certificates and other documents of title relating to the
Initially Charged Shares together with stock transfer forms in respect of the
Initially Charged Shares duly executed in blank by or on behalf of DesalCo.

2.3      FURTHER SHARES

Upon its becoming the beneficial or registered owner of any Charged Shares
(other than the Initially Charged Shares) DesalCo shall ensure that such Charged
Shares (unless already so registered) are registered in the name of the DesalCo
and shall promptly notify the Secured Party of such circumstances and deposit
with the Secured Party any share certificates and other documents of title
representing such Charged Shares together with blank stock transfer forms in
respect of such Charged Shares duly executed by or on behalf of DesalCo.

The Borrower shall pay when due all calls or other requests for payments due in
respect of any of the Secured Property, but if the Borrower fails to make any
such payment the Secured Party may (but shall not be obliged to) make such
payment on behalf of the Borrower and if the Secured Party does so the Borrower
shall promptly on demand of the Secured Party pay to the Secured Party an amount
equal to such payment.

                                      -3-

<PAGE>

3.       DIVIDENDS, VOTING AND INFORMATION

3.1      SECURITY NOT ENFORCEABLE

Unless and until the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), DesalCo shall continue to be entitled to:

(a)      receive and retain all dividends, interest and other monies arising
         from the Secured Property; and

(b)      exercise all voting rights in relation to the Charged Shares;

provided that DesalCo shall not exercise such voting rights, or otherwise permit
or agree to (i) any variation of the rights attaching to or conferred by the
Secured Property or any part of it, (ii) any increase in the issued share
capital of the Company in any manner which, in the opinion of the Secured Party,
would, or would be reasonably likely to, impair the value of, or prejudice the
ability of the Secured Party to realise, the Security or (iii) in violation of
any provision of the Financing Documents.

3.2      SECURITY ENFORCEABLE

At any time after the Security has become enforceable pursuant to Clause 8.1,
the Secured Party shall be entitled to cause the Charged Shares to be registered
in its name and may at its discretion (in the name of DesalCo or otherwise and
without any further consent or authority from the DesalCo):

(a)      exercise or refrain from exercising any voting rights in respect of the
         Charged Shares and revoke, or cause to be revoked, any proxies given
         pursuant to Clause 3.1 (Security not Enforceable);

(b)      apply all dividends, interest and other monies arising from the Secured
         Property as if they were proceeds of sale under this Charge;

(c)      exercise or refrain from exercising the rights of a legal owner of the
         Secured Property, including the right, in relation to any company whose
         shares or other securities are included in the Secured Property, to
         concur or participate in:

         (i)      the reconstruction, amalgamation, sale or other disposal of
                  such company or any of its assets or undertaking (including
                  the exchange, conversion or reissue of any shares or
                  securities as a consequence thereof),

         (ii)     the realisation, modification or variation of any rights or
                  liabilities attaching to any such shares or securities, and

         (iii)    the exercise, renunciation or assignment of any right to
                  subscribe for any such shares or securities,

                                      -4-

<PAGE>

                  in each case in such manner and on such terms as the Secured
                  Party may think fit, and all rights resulting from any such
                  action shall form part of the Secured Property.

3.3      INFORMATION

If DesalCo receives a balance sheet, profit and loss account or any notice,
report, statement or circular sent or delivered by the issuer of any Charged
Share to its members, it shall promptly deliver a copy to the Secured Party.

4.       CONTINUING SECURITY

4.1      CONTINUING AND INDEPENDENT SECURITY

This Charge shall constitute and be continuing security which shall not be
released or discharged by any intermediate payment or settlement of all or any
of the Secured Obligations, shall continue in full force and effect until the
end of the Security Period and is in addition to and independent of, and shall
not prejudice or merge with, any other security (or any right of set-off) which
the Secured Party may hold at any time for the Secured Obligations or any of
them.

4.2      AVOIDANCE OF PAYMENTS

Where any release, discharge or other arrangement in respect of any Secured
Obligation or any security any Secured Party may hold for such Secured
Obligation is given or made in reliance on any payment or other disposition
which is avoided or must be repaid in an insolvency, liquidation or otherwise,
and whether or not such Secured Party has conceded or compromised any claim that
any such payment or other disposition will or should be avoided or repaid, this
Charge and the Security shall continue as if such release, discharge or other
arrangement had not been given or made.

4.3      IMMEDIATE RECOURSE

The Secured Party shall not be obliged before exercising any of the rights
conferred on it by this Charge or by law to seek to recover amounts due from the
Borrower or to exercise or enforce any other rights or security it may have or
hold in respect of the Secured Obligations.

4.4      WAIVER OF DEFENCES

The obligations of DesalCo under this Charge and the Security Documents to which
it is a party and the rights, powers and remedies conferred on the Secured Party
by this Charge or by law shall not be discharged, impaired or otherwise affected
by:

(a)      the winding-up, dissolution, administration or re-organisation of the
         Borrower or DesalCo or any other person or any change in the status,
         function, control or ownership of the Borrower or DesalCo or any such
         person;

(b)      any of the Secured Obligations or any other security held by the
         Secured Party in respect thereof being or becoming illegal, invalid,
         unenforceable or ineffective in any respect;

                                      -5-

<PAGE>

(c)      any time or other indulgence being granted or agreed to with the
         Borrower, DesalCo or any other person in respect of the Secured
         Obligations or any of them or in respect of any other security held by
         the Secured Party in respect thereof;

(d)      any amendment to, or any variation, waiver or release of, the Secured
         Obligations or any of them or any other security held by the Secured
         Party in respect thereof;

(e)      any total or partial failure to take or perfect any security proposed
         to be taken in respect of the Secured Obligations or any of them;

(f)      any total or partial failure to realise the value of, or any release,
         discharge, exchange or substitution of, any other security held by the
         Secured Party in respect of the Secured Obligations or any of them; or

(g)      any other act, event or omission which might operate to discharge,
         impair or otherwise affect the obligations of the Borrower or DesalCo
         hereunder, the Security or any of the rights, powers and remedies
         conferred on the Secured Party by this Charge or by law.

4.5      NO COMPETITION

Any right which the Borrower or DesalCo may have (a) by way of contribution or
indemnity in relation to the Secured Obligations or (b) otherwise to claim or
prove as a creditor of the Company or any other person or its estate in
competition whether a right of subrogation or otherwise with the Secured Party,
shall be exercised by the Borrower and/or DesalCo only if and to the extent that
the Secured Party so requires and in such manner and upon such terms as the
Secured Party may specify and the Borrower and DesalCo shall hold any moneys,
rights or security held or received by each of them as a result of the exercise
of any such rights on trust for the Secured Party for application in accordance
with the terms of this Charge as if such moneys, rights or security were held or
received by the Secured Party under this Charge.

4.6      APPROPRIATION

The Secured Party shall not be obliged to apply any sums held or received by it
in respect of the Secured Obligations in or towards payment of the Secured
Obligations and any such sum shall be held by or paid to the Secured Party for
application pursuant to the terms of this Charge.

4.7      SUBROGATION

DesalCo shall not have any right of subrogation in respect of the performance of
any of its respective obligations under this Agreement and the Charge until all
of the Secured Obligations have been paid in full.

5.       REPRESENTATIONS AND WARRANTIES

DesalCo makes the representations and warranties set out in Clauses 5.1 (Status
and Due Authorisation) to 5.12 (No Security from the Company) and acknowledge
that the Secured Party has entered into this Charge in reliance on those
representations and warranties.

                                      -6-

<PAGE>

5.1      STATUS AND DUE AUTHORISATION

It is a company duly incorporated with limited liability under the laws of the
Cayman Islands with power to enter into this Charge and to exercise its rights
and perform its obligations under this Charge and all corporate and other action
required to authorise its execution of this Charge and its performance of its
obligations hereunder has been duly taken.

5.2      BINDING OBLIGATIONS

The obligations expressed to be assumed by it in this Charge are legal and valid
obligations binding on it in accordance with the terms of this Charge which
constitutes a first priority fixed charge over the Charged Shares subject to any
general principles of law limiting its obligations which are referred to in any
legal opinion delivered pursuant to the Loan Agreement.

5.3      ALL ACTIONS TAKEN

All acts, conditions and things required to be done, fulfilled and performed in
order (a) to enable it lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to be assumed by it in this
Charge, (b) to ensure that the obligations expressed to be assumed by it in this
Charge are legal, valid and binding and (c) to make this Charge admissible in
evidence in its jurisdiction of incorporation have been done, fulfilled and
performed.

5.4      NO DEDUCTIONS OR WITHHOLDINGS

It will not be required to make any deduction or withholding from any payment it
may make under this Charge.

5.5      NO FILING OR STAMP TAXES

Under the laws of its jurisdiction of incorporation, it is not necessary that
this Charge be filed, recorded or enrolled with any court or other authority in
the Cayman Islands or that any advalorem stamp, registration or similar tax be
paid on or in relation to this Charge.

5.6      NO WINDING-UP

It has not taken any corporate action nor have any other steps been taken or
legal proceedings been started or (to the best of its knowledge and belief)
threatened against it for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its assets or revenues.

5.7      NO ADVERSE INTERESTS

Subject only to the Security, no person other than DesalCo has any legal or
beneficial interest (or any right to claim any such interest) in the Secured
Property and DesalCo has not received notice of any such claim.

                                      -7-

<PAGE>

5.8      NO DISPOSALS

Save as contemplated in this Charge, it has not transferred, mortgaged,
charged or otherwise disposed of (or agreed to transfer, mortgage, charge or
otherwise dispose of), whether by way of security or otherwise, the benefit of
all or any of its right, title and interest in and to the Secured Property or
any part of it.

5.9      NO CONFLICTS

Its execution of this Charge and its exercise of its rights and performance of
its obligations hereunder do not and will not (a) conflict with the provisions
of (i) any agreement, mortgage, bond or other instrument or treaty to which it
is a party or which is binding upon it or any of its assets, (ii) its
constitutive documents or any rules and regulations made thereunder or (iii) any
applicable law, regulation or official or judicial order or (b) cause any of the
foregoing representations to be untrue.

5.10     THE CHARGED SHARES

Each Charged Share is fully paid or credited as fully paid, no calls have been
made in respect thereof and remain unpaid and no calls can be made in respect of
such Charged Share in the future and the terms of each Charged Share and of the
Memorandum and Articles of Association of the issuer of such Charged Share do
not restrict or otherwise limit DesalCo's right to transfer or charge such
Charged Share.

5.11     CHOICE OF LAW

In any proceedings taken in its jurisdiction of incorporation in relation to
this Charge, the choice of Barbados law as the governing law of this Charge and
any judgment obtained in Barbados will be recognised and enforced.

5.12     NO SECURITY FROM THE COMPANY

It has not requested or taken any security from the Company for any obligations
or liabilities of the Company to it.

5.13     REPETITION

The representations and warranties set out in Clauses 5.1 (Status and Due
Authorisation) to 5.12 (No Security from the Company):

(a)      shall survive the execution of each Financing Document and each
         drawdown under the Loan Agreement; and

(b)      are made on the date hereof and are deemed to be repeated on each Draw
         down Date during the Security Period with reference to the facts and
         circumstances then existing.

                                      -8-

<PAGE>

6.       UNDERTAKINGS

6.1      AUTHORISATIONS

DesalCo shall obtain, comply with the terms of and do all that is necessary to
maintain in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its jurisdiction of
incorporation to enable it lawfully to enter into and perform its obligations
under this Charge and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of this Charge.

6.2      NO ACTION

DesalCo shall not take any action which would cause any of the representations
made in Clause 5 (Representations and Warranties) to be untrue at any time
during the Security Period.

6.3      NOTIFICATION OF MISREPRESENTATION

DesalCo shall notify the Secured Party of the occurrence of any event which
results in or may reasonably be expected to result in any of the representations
made in Clause 5 (Representations and Warranties) being untrue when made or when
deemed to be repeated.

6.4      NO VARIATION OR RELEASE

DesalCo shall not, without the prior written consent of the Secured Party,
purport to vary or revoke any notice or instruction relating to this Charge
which it has given or may later give to any person.

6.5      NO ACTION TO JEOPARDISE SECURITY CONSTITUTED HEREBY

DesalCo shall not do or fail to do or cause or permit another person to do or
omit to do anything which is liable to jeopardise the effectiveness or priority,
in relation to the Security.

7.       FURTHER ASSURANCE

DesalCo shall from time to time and at its own expense give all such assurances
and do all such things as the Secured Party may require in order to enable the
Secured Party to perfect or protect the security created or intended to be
created by this Charge or to exercise any of the rights conferred on it by this
Charge or by law and to that intent DesalCo shall execute all such instruments,
deeds and agreements and give all such notices and directions as the Secured
Party may require.

8.       ENFORCEMENT OF SECURITY

8.1      SECURITY ENFORCEABLE

The Security shall become immediately enforceable if an Event of Default has
occurred and is continuing as defined above in Clause 1.3.

                                      -9-

<PAGE>

8.2      ENFORCEMENT

At any time after the Security has become enforceable, the Secured Party may in
its absolute discretion enforce all or any part of the Security and exercise any
of the rights conferred on it by this Charge or by law at such times and in such
manner as it thinks fit.

8.3      POWER OF SALE

At any time after the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Secured Party may (without notice to the Borrower or
DesalCo) sell or otherwise dispose of the Secured Property or any part of it and
shall be entitled to apply the proceeds of such sale or other disposal in paying
the costs of such sale or disposal and thereafter in or towards the discharge of
the Secured Obligations or otherwise as provided for in this Charge.

8.4      STATUTORY POWERS

For the purposes of all powers implied by statute the Secured Obligations shall
be deemed to have become due and payable on the date of this Charge.

8.5      REGISTRATION OF SHARES

The Secured Party shall be entitled at any time after the Security has become
enforceable pursuant to Clause 8.1 (Security Enforceable) to complete any stock
transfer forms then held by the Secured Party pursuant to this Charge in the
name of the Secured Party and thereupon the Borrower and DesalCo shall do
whatever the Secured Party requires in order to procure:

(a)      The prompt registration of such transfer or transfers and the prompt
         issue of a new certificate or certificates for the relevant Charged
         Shares in the name of the Secured Party who shall hold such Charged
         Shares as Security for the Obligations in furtherance of the power of
         sale provided for in Clause 8.3 above; and

(b)      Compliance by the Company with all requirements of the Land Holding
         Companies Share Transfer Tax Law (2002 Revision), as the same may be
         amended from time to time, or any legislation in substitution or in
         addition thereto and the Borrower and DesalCo shall provide all
         assistance as may be needed or required by the Company to enable it to
         meet such compliance whether financial or otherwise.

9.       RECEIVERS

9.1      APPOINTMENT

At any time after the Security has become enforceable (whether or not the
Secured Party shall have taken possession of the Secured Property), or following
the dissolution of DesalCo, and without any or further notice, the Secured Party
may, by Deed or writing signed by any officer or manager of the Secured Party or
any person authorised for this purpose by the Secured Party, appoint any person
to be Receiver, and may similarly remove any Receiver whether or not it appoints
any person in his place. If the Secured Party appoints more than one person as

                                      -10-

<PAGE>

Receiver, the Secured Party may give the relevant persons power to
act either jointly or severally.

9.2      SCOPE OF APPOINTMENT

Any Receiver may be appointed either Receiver of all the Secured Property or
Receiver of such part of the Secured Property as may be specified in the
appointment. In the latter case, the rights conferred on a Receiver by Clause 9
(Receivers) shall have effect as though every reference in that Clause to the
"SECURED PROPERTY" were a reference to the part of the Secured Property so
specified or any part thereof.

9.3      POWERS OF A RECEIVER

Any Receiver appointed under this Charge shall have all the powers granted to a
receiver under the applicable law and, in addition shall have the right, either
in his own name or in the name of DesalCo or otherwise and in such manner and
upon such terms and conditions as the Receiver thinks fit;

(a)      in connection with any sale or disposition of the Secured Property, to
         receive the consideration therefor in a lump sum or in instalments and
         to receive shares by way of consideration;

(b)      to grant options, licences or any other interest whatsoever in relation
         to the Secured Property;

(c)      to do all other acts and things which he may consider desirable or
         necessary for realising the Secured Property or incidental or conducive
         to any of the rights, powers or discretions conferred on a Receiver
         under, or by virtue of, this Charge; and

(d)      to exercise in relation to the Secured Property all the powers,
         authorities and things which he would be capable of exercising if he
         were the absolute beneficial owner of the same.

9.4      CONFLICT

If there is any ambiguity or conflict between the powers conferred on the
Receiver by the applicable law and the powers conferred by Clause 9.3 (Powers of
a Receiver), the powers conferred by Clause 9.3 (Powers) shall prevail.

9.5      SECURITY TRUSTEE OF BORROWER

Any Receiver shall be the agent of DesalCo for all purposes and DesalCo shall be
solely responsible for the contracts, engagements, acts, omissions, defaults and
losses of the Receiver and for all liabilities incurred by the Receiver.

9.6      REMUNERATION

The Secured Party may, from time to time, determine the remuneration of any
Receiver and may direct payment of such remuneration out of moneys accruing to
the Receiver as Receiver but

                                      -11-

<PAGE>

DesalCo shall be the only parties liable for the payment of such remuneration
and for all other costs, charges and expenses of the Receiver, unless incurred
as the result of the fraud, gross negligence or wilful misconduct of the
Receiver.

10.      APPLICATION OF PROCEEDS

Any moneys held or received by the Secured Party under or pursuant to this
Charge shall be applied by the Secured Party in reduction of the amounts due to
the Secured Party under the terms of the Loan Agreement.

11.      POWER OF ATTORNEY

11.1     APPOINTMENT

By way of security for the performance of its obligations hereunder, DesalCo
hereby irrevocably appoint the Secured Party, any Receiver of the Secured
Property or any part of it and its delegates and sub-delegates to be their
respective attorney acting severally (or jointly with any other such attorney or
attorneys) and on its behalf and in its name or otherwise to do any and every
thing which DesalCo is obliged to do under the terms of this Charge or which
such attorney considers necessary in order to enable the Secured Party or such
attorney to exercise the rights conferred on it by this Charge or by law.

11.2     RATIFICATION

DesalCo hereby ratify and confirm and agree to ratify and confirm whatever any
attorney appointed under this Charge shall do in its capacity as such.

12.      RELEASE OF THE SECURITY

After the end of the Security Period, the Secured Party shall, at the request
and cost of the DesalCo, execute all such documents and do all such other things
as may be required to release the Security, in each case without recourse to or
any representation or warranty by or from the Secured Party.

13.      COSTS AND EXPENSES

13.1     TRANSACTION COSTS

DesalCo agrees with the Secured Party that they shall on demand of the Secured
Party reimburse the Secured Party on a full indemnity basis all costs and
expenses (including legal fees), incurred by, or any remuneration payable to the
Secured Party in connection with the preparation, negotiation, execution and
perfection of this Charge and the implementation of the arrangements
contemplated herein.

13.2     STAMP TAX

DesalCo shall pay any and all stamp, registration and other taxes to which this
Charge or any judgment given in connection herewith is or at any time may be
subject and shall on demand

                                      -12-

<PAGE>

indemnify the Secured Party against any liabilities, costs, claims and expenses
(including legal fees) resulting from any failure to pay or delay in paying any
such tax.

13.3     INDEMNITY

DesalCo shall indemnify and hold harmless the Secured Party from and against any
and all costs, claims losses, expenses (including legal fees) and liabilities,
which the Secured Party may incur as a result of the occurrence of any Event of
Default, the enforcement of the Security or the exercise or enforcement by the
Secured Party of any of the rights conferred on it by this Charge or by law
unless incurred by the Secured Party as a result of its own fraud, wilful
misconduct or gross negligence or the fraud, gross negligence or wilful
misconduct of its delegates and subdelegates.

14.      NO WAIVER; REMEDIES CUMULATIVE

No failure or delay on the part of the Secured Party in exercising any right,
power or privilege hereunder or under any other Financing Document and no course
of dealing between DesalCo and the Secured Party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on DesalCo in any case shall
entitle DesalCo to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Secured Party to take
any other or further action in any circumstances without notice or demand. All
remedies, either under this Agreement or any other Financing Document or
pursuant to any applicable law or otherwise afforded to the Secured Party shall
be cumulative and not alternative.

15.      ADDITIONAL PROVISIONS

15.1     SEVERABILITY

Any provision hereof which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of any provision in any other
jurisdiction.

15.2     CURRENCY CONVERSION

In order to apply any sum held or received by the Secured Party in or towards
payment of the Secured Obligations, the Secured Party may purchase an amount in
another currency and the rate of exchange to be used shall be that at which, at
such time as it considers appropriate, the Secured Party is able to effect such
purchase.

15.3     JUDGMENT CURRENCY

This is an international transaction in which the specification of Dollars and
payment in the Cayman Islands is of the essence, and the obligations of DesalCo
under this Charge and under the other Financing Documents to make payment to (or
for the account of) the Secured Party in

                                      -13-

<PAGE>

Dollars shall not be discharged or satisfied by any tender or recovery pursuant
to any judgment expressed in or converted into any other currency or in another
place except to the extent that such tender or recovery results in the effective
receipt by the Secured Party in Cayman of the full amount of Dollars payable to
the Secured Party under this Charge.

(a)      If any sum due from DesalCo under this Charge (a "SUM"), or any order,
         judgment or award given or made in relation to a Sum, has to be
         converted from the currency (the "FIRST CURRENCY") in which that Sum
         is payable into another currency (the "SECOND CURRENCY") for the
         purpose of:

         (i)      making or filing a claim or proof against the Company or
                  DesalCo;

         (ii)     obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

         DesalCo shall as an independent obligation, within three (3) Business
         Days of demand, indemnify the Secured Party against any cost, loss or
         liability arising out of or as a result of the conversion including any
         discrepancy between (A) the rate of exchange used to convert that Sum
         from the First Currency into the Second Currency and (B) the rate or
         rates of exchange available to the Secured Party at the time of its
         receipt of that Sum.

(b)      DesalCo waives any right each may have in any jurisdiction to pay any
         amount under this Charge in a currency or currency unit other than that
         in which it is expressed to be payable.

15.4     RIGHTS CUMULATIVE

The rights and remedies provided by this Charge are cumulative and not exclusive
of any rights or remedies provided by law.

15.5     MORTGAGEE IN POSSESSION

Neither the Secured Party nor any Receiver shall by reason of its taking any
action permitted by this Charge or its taking possession of the Secured Property
or any part of it be liable to account as mortgagee in possession or be liable
for any loss on realisation or for any default or omission for which a mortgagee
in possession might be liable other than for its own fraud, gross negligence and
wilful misconduct, or the fraud, gross negligence or wilful misconduct of its
delegates.

16.      ASSIGNMENT

16.1     DESLACO'S RIGHTS

The rights of DesalCo under this Charge are not assignable or transferable and
DesalCo agrees that it will not purport to assign all or any such rights.

                                      -14-

<PAGE>

16.2     THE SECURED PARTY'S RIGHTS

The rights of the Secured Party under this Charge are assignable in whole or in
part and the Secured Party may assign all or any such rights without the consent
of DesalCo. The Secured Party shall provide written notice to DesalCo of any
such assignment.

17.      NOTICES

(a)      All notices, requests, approvals, consents and other communications
         provided for hereunder shall be in writing (including, unless the
         context expressly otherwise provides, by facsimile transmission,
         provided that any matter transmitted by DesalCo by facsimile (i) shall
         be promptly confirmed by a telephone call to the recipient at the
         number specified on the applicable signature page hereof, and (ii)
         shall be followed promptly by a hard copy original thereof by express
         courier) and faxed or delivered, to the address or facsimile number
         specified for notices on the applicable signature page hereof or to
         such other address as shall be designated by such party in a written
         notice to the other parties hereto.

(b)      All such notices, requests, approvals, consents and communications (i)
         sent by express courier will be effective upon delivery to or refusal
         to accept delivery by the addressee, and (ii) transmitted by facsimile
         will be effective when sent and facsimile confirmation received; except
         that all notices and other communications to any Agent shall not be
         effective until actually received.

(c)      DesalCo acknowledge and agree that any agreement of the Secured Party
         to receive certain notices by telephone and facsimile is solely for the
         convenience and at the request of DesalCo. The Secured Party shall be
         entitled to rely on the authority of any Person purporting to be a
         Person authorized by DesalCo to give such notice and the Secured Party
         shall not have any liability to the DesalCo or other Person on account
         of any action taken or not taken by the Secured Party in reliance upon
         such telephonic or facsimile notice.

(d)      All notices, requests and other communications hereunder and under the
         other Financing Documents shall be in the English language unless
         otherwise agreed by the parties hereto.

18.      GOVERNING LAW AND JURISDICTION

THIS CHARGE IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
BARBADOS.

19.      SUBMISSION

(a)      For the exclusive benefit of the Secured Party and DesalCo irrevocably
         agree that the courts of Barbados are to have jurisdiction to settle
         any claims or disputes arising under, out of or in connection with this
         Charge (including without limitation any claim or dispute relating to
         the validity, interpretation, performance, termination or enforcement
         of this Charge) and that accordingly any suit, action or proceedings in
         that respect (together in Clauses 19 and 20 referred to as
         "PROCEEDINGS") may be brought in such courts.

                                      -15-

<PAGE>

(b)      DesalCo irrevocably waive and agree not to raise any objection which
         each of them may have now or hereafter to the laying of the venue of
         any Proceedings in the courts of Barbados and any claim that any such
         Proceedings have been brought in an inconvenient or inappropriate
         forum.

(c)      DesalCo irrevocably agree not to take Proceedings in any court of
         competent jurisdiction other than the courts of Barbados, save with
         respect to any counterclaim asserted by DesalCo in the course of
         proceedings previously commenced by the Secured Party. Nothing
         contained in this Clause 19 shall limit the right of the Secured Party
         to take Proceedings against DesalCo in any other court of competent
         jurisdiction, nor shall the taking of Proceedings in one or more
         jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

20.      JUDGMENTS AND IMMUNITY

(a)      DesalCo recognizes and acknowledges that this Charge constitutes a
         commercial transaction and accordingly it acknowledges and agrees that
         it is not entitled to plead, and pursuant to this Clause 20 hereby
         waives to the fullest extent permitted by law any right to claim,
         sovereign immunity for any purpose whatsoever, including, but not
         limited to, any right to plead sovereign immunity in respect of any
         Proceedings pursuant to this Charge.

(b)      DesalCo consents generally, in respect of any Proceedings pursuant to
         this Charge for the purpose of enforcing any order, judgment or award,
         to the giving of any relief or the issuing of any process in connection
         with such order, judgment or award including, without limitation, the
         making, enforcement or execution against any property of any order,
         judgment or award and to the extent that DesalCo may be entitled in any
         jurisdiction to claim for itself or its property immunity in respect of
         its obligations under this Charge from any suit, execution, attachment
         (whether in aid of execution, before judgment or otherwise) or legal
         process or to the extent that in any jurisdiction there may be
         attributed to itself or its property such immunity, DesalCo agrees not
         to claim and hereby irrevocably waive such immunity to the fullest
         extent permitted by the laws of such jurisdiction.

(c)      DesalCo unconditionally and irrevocably agrees, with respect to any
         final order, judgment or award in any Proceedings made pursuant to this
         Charge and not subject to appeal (a "JUDGMENT"), that:

         (i)      the Judgment shall be conclusive and binding upon it;

         (ii)     it shall be bound by and recognize the Judgment in any
                  jurisdiction;

         (iii)    to the extent permitted by law, it shall not claim, invoke on
                  its behalf or for its benefit any right it may have under the
                  laws of Barbados, or any other state or jurisdiction, to
                  prevent, delay, hinder, nullify or in any other way obstruct
                  the enforcement or execution of the Judgment; and

                                      -16-

<PAGE>

         (iv)     to the extent permitted by law, it shall not, and shall
                  irrevocably waive any right to, challenge the Judgment on any
                  ground or the enforcement or execution of the Judgment in any
                  jurisdiction (other than by way of appeal in the original
                  jurisdiction).

21.      COUNTERPARTS AND EFFECTIVENESS

21.1     COUNTERPARTS

This Charge may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

21.2     EFFECTIVENESS

This Charge shall take effect and be delivered as a deed on the date on which it
is stated to be made.

22.      AMENDMENT OR WAIVER

No provision of this Agreement may be amended, supplemented, modified or waived,
except by written instrument signed by each of the parties hereto.

                                     * * *

                                      -17-

<PAGE>

IN WITNESS WHEREOF this Charge has been executed as a deed by the parties hereto
      and has been delivered on date stated at the beginning of this Deed.

DESALCO                                            )
Executed on behalf of                              )
DESALCO LIMITED                                    ) /s/ Jeffrey M. Parker
as a deed by:                                      )
         Name: Mr. Jeffrey Parker
         Title: Chief Executive Officer

Notice Address:
Address:
P.O.Box 1114 GT
Trafalgar House
Grand Cayman, Cayman Islands.
Attention: Mr. Jeffrey Parker

Telephone No.: 345 945-4277
Telecopier No. 345 949-2957

SECURED PARTY                                      )
EXECUTED ON BEHALF OF                              ) /s/ Bruce John
SCOTIABANK (CAYMAN ISLANDS) LTD.                   )
as a deed by:
         Name: Mr. Bruce John
         Title: Commercial Banking Manager

Notice Address:
Address:
Scotiabank (Cayman Islands) Ltd.
Scotia Centre
Cardinal Avenue
P.O. Box 689
Grand Cayman

Attention: Commercial Banking Manager

Telephone No.: 345 949-7666
Telecopier No. 345 949-5130

         By its execution of this Equitable Charge of Shares, DESALCO LIMITED
hereby acknowledges the terms and conditions hereof, and irrevocably undertakes
that should the Secured Party exercise its rights under this Equitable Charge of
Shares, DesalCo Limited shall

                                      -18-

<PAGE>

make all reasonable efforts to ensure that Consolidated Water (BVI) Limited
takes no action, or failure to take any required action, which would have the
effect of frustrating the Secured Party's ability to be recorded in the Register
of Members as the registered legal and beneficial owner of the Shares.

DESALCO LIMITED

/s/ Jeffrey M. Parker
- ------------------------------
Name: Mr. Jeffrey Parker
Title: Chief Executive Officer

                                      -19-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>23
<FILENAME>g80228exv10w43.txt
<DESCRIPTION>EQUITABLE CHARGE OF SHARES
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.43

================================================================================

                          THE 7TH DAY OF FEBRUARY, 2003

                           EQUITABLE CHARGE OF SHARES
      (Collateral to a Substituted Debenture bearing even date herewith and
            entered into between the Borrower and the Secured Party)

                                     BETWEEN

                           CONSOLIDATED WATER CO. LTD.
                                   as Borrower

                                       AND

                        SCOTIABANK (CAYMAN ISLANDS) LTD.
                                as Secured Party

                          with respect to the shares in

                         OCEAN CONVERSION (CAYMAN) LTD.

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
1.       INTERPRETATION .................................................      1

         1.1      Definitions ...........................................      1
         1.2      Interpretation ........................................      2
         1.3      Continuing Events of Default ..........................      2
         1.4      Certificates ..........................................      2
         1.5      Statutes ..............................................      3
         1.6      Implied Covenants .....................................
         1.7      Nominees ..............................................      3
         1.8      Clause and Schedule Headings ..........................      3
2.       EQUITABLE CHARGE ...............................................      3

         2.1      Charge ................................................      3
         2.2      Deposit of Share Certificates .........................      3
         2.3      Further Shares.........................................      3
3.       DIVIDENDS, VOTING AND INFORMATION ..............................      4

         3.1      Security not Enforceable ..............................      4
         3.2      Security Enforceable ..................................      4
         3.3      Information ...........................................      5
4.       CONTINUING SECURITY ............................................      5

         4.1      Continuing and Independent Security ...................      5
         4.2      Avoidance of Payments .................................      5
         4.3      Immediate Recourse ....................................      5
         4.4      Waiver of Defences ....................................      5
         4.5      No Competition ........................................      6
         4.6      Appropriation .........................................      6
         4.7      Subrogation ...........................................      6
5.       REPRESENTATIONS AND WARRANTIES .................................      6

         5.1      Status and Due Authorisation ..........................      7
         5.2      Binding Obligations ...................................      7
         5.3      All Actions Taken .....................................      7
         5.4      No Deductions or Withholdings .........................      7
         5.5      No Filing or Stamp Taxes ..............................      7
         5.6      No Winding-up .........................................      7
         5.7      No Adverse Interests ..................................      7
         5.8      No Disposals ..........................................      8
         5.9      No Conflicts ..........................................      8
         5.10     The Charged Shares ....................................      8
         5.11     Choice of Law .........................................      8
         5.12     No Security from the Borrower .........................      8
         5.13     Repetition ............................................      8
6.       UNDERTAKINGS ...................................................      9
</TABLE>

                                      (ii)

<PAGE>

<TABLE>
<S>                                                                           <C>
         6.1      Authorisations.........................................      9
         6.2      No Action..............................................      9
         6.3      Notification of Misrepresentation......................      9
         6.4      No Variation or Release................................      9
         6.5      No Action to Jeopardise Security Constituted Hereby....      9
7.       FURTHER ASSURANCE ..............................................      9

8.       ENFORCEMENT OF SECURITY ........................................     10

         8.1      Security Enforceable...................................     10
         8.2      Enforcement............................................     10
         8.3      Power of Sale..........................................     10
         8.4      Statutory Powers.......................................     10
         8.5      Realisation Accounts ..................................
         8.6      Registration of Shares.................................     10
9.       RECEIVERS ......................................................     11

         9.1      Appointment............................................     11
         9.2      Scope of Appointment...................................     11
         9.3      Powers of a Receiver...................................     11
         9.4      Conflict...............................................     11
         9.5      Security Trustee of Borrower...........................     12
         9.6      Remuneration...........................................     12
10.      APPLICATION OF PROCEEDS ........................................     12

11.      POWER OF ATTORNEY...............................................     12

         11.1     Appointment............................................     12
         11.2     Ratification...........................................     12
12.      RELEASE OF THE SECURITY ........................................     12

13.      PAYMENTS .......................................................

14.      COSTS AND EXPENSES .............................................     12

         14.1     Transaction Costs......................................     13
         14.2     Stamp Tax..............................................     13
         14.3     Indemnity..............................................     13
15.      NO WAIVER; REMEDIES CUMULATIVE .................................     13

16.      ADDITIONAL PROVISIONS ..........................................     13

         16.1     Severability...........................................     13
         16.2     Currency Conversion....................................     14
         16.3     Judgment Currency......................................     14
         16.4     Rights Cumulative......................................     14
         16.5     Mortgagee in Possession................................     14
17.      ASSIGNMENT .....................................................     15
</TABLE>

                                     (iii)

<PAGE>

<TABLE>
<S>                                                                           <C>
         17.1     The Borrower's Rights .................................     15
         17.2     The Secured Party's Rights ............................     15
18.      NOTICES ........................................................     15

19.      GOVERNING LAW AND JURISDICTION .................................     16

20.      SUBMISSION .....................................................     16

21.      Judgments and Immunity .........................................     16

22.      COUNTERPARTS AND EFFECTIVENESS .................................     17

         22.1     Counterparts ..........................................     17
         22.2     Effectiveness .........................................     17
23.      AMENDMENT OR WAIVER ............................................     17

THE SCHEDULE The Initially Charged Shares................................
</TABLE>

                                      (iv)

<PAGE>

THIS COLLATERALCHARGE ("CHARGE") is made on the 7th day of February, 2003
between the following parties:

(1)      CONSOLIDATED WATER CO. LTD., a company incorporated in the Cayman
         Islands, with its registered office located at P.O. Box 1114 GT,
         Trafalgar Place, George Town, Grand Cayman, Cayman Islands, (the
         "BORROWER");and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. a banking institution organised and
         existing under the laws of the Cayman Islands, with its principal place
         of business located at Scotiabank Centre, Cardinal Avenue, Georgetown,
         Grand Cayman (the "SECURED PARTY").

RECITALS

A.       The Borrower currently holds one hundred percent (100%) of the shares
         of Ocean Conversion (Cayman) Limited (the "COMPANY").

B.       The Secured Party has agreed to provide certain loans to the Borrower.

C.       Such loans will be made subject to the terms and conditions of a Loan
         Agreement, dated the date hereof, among the Borrower and the Secured
         Party (the "LOAN AGREEMENT").

D.       It is a condition to the first disbursement under the Loan Agreement
         that the Borrower shall have entered into the Charge.

E.       The Board of Directors of the Borrower is satisfied that the Borrower
         is entering into this Charge for the purposes of its business and that
         its doing so benefits the Borrower.

F.       The Borrower and the Secured Party intend this Charge to take effect as
         a deed.

G.       This Collateral Charge is intended to be collateral to a Substituted
         Debenture bearing even date herewith entered into between the Borrower
         and the Secured Party and shall be stamped as such.

1.       INTERPRETATION

1.1      DEFINITIONS

(a)      Capitalized terms used in this Charge without definition have the
         meanings specified in Annex A to the Loan Agreement.

(b)      In addition the following terms in this Charge have the meanings given
         to them in this Clause.

"CHARGED SHARES" means any shares from time to time forming part of the Secured
Property.

"FINANCING DOCUMENTS" means collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

<PAGE>

"INITIALLY CHARGED SHARES" means all the shares in the Company specified in
recital "A" to this Charge of which the Company is the beneficial or registered
owner on the date of this Charge, as described and identified in that Schedule.

"OBLIGATIONS" shall mean, collectively, all loans, advances, debts, liabilities,
and obligations, howsoever arising, owed by the Borrower under a Financing
Document or otherwise to the Secured Party.

"RECEIVER" means an administrative receiver, a receiver and manager or any other
receiver (whether appointed pursuant to this Charge, pursuant to any statute, by
a court or otherwise) of the Secured Property or any part of it.

"SECURED OBLIGATIONS" means all present and future Obligations.

"SECURED PROPERTY" means the Initially Charged Shares and any other shares in
the Company of which the Borrower is or becomes the beneficial or registered
owner together with all dividends, stocks, shares, warrants, securities, rights,
monies or other property accruing on or derived from such shares.

"SECURITY" means the security created by this Charge.

"SECURITY PERIOD" means the period beginning on the date of this Charge and
ending on the date upon which:

(a)      the Secured Party is under no obligation (whether actual or contingent)
         to make advances or provide other financial accommodation to the
         Borrower under any of the Financing Documents; and

(b)      all Secured Obligations have been unconditionally and irrevocably paid
         and discharged in full.

1.2      INTERPRETATION

The principles of interpretation set forth in Section 18.13 to the Loan
Agreement shall apply to this Charge.

1.3      CONTINUING EVENTS OF DEFAULT

An event which constitutes an Event of Default shall be regarded as continuing
if (a) the circumstances constituting such event continue and (b) the Secured
Party has not waived such of its rights under the Financing Documents as arise
as a result of the occurrence of that event.

1.4      CERTIFICATES

A certificate of the Secured Party as to the amount of any Secured Obligation
owed to it shall be prima facie evidence of the existence and amount of such
Secured Obligation.

                                      -2-

<PAGE>

1.5      STATUTES

Any reference in this Charge to a statute or statutory provision shall, unless
the contrary is indicated, be construed as a reference to such statute or
statutory provision as the same shall have been or may be amended or re-enacted.

1.6      NOMINEES

If the Secured Party causes or requires the Charged Shares to be registered in
the name of a nominee for the Secured Party, any reference in this Charge to the
Secured Party shall, if the context so permits or requires, be construed as a
reference to the Secured Party and such nominee.

1.7      CLAUSE AND SCHEDULE HEADINGS

Clause and Schedule headings are for case of reference only and shall not affect
the construction of this Charge.

2.       EQUITABLE CHARGE

2.1      CHARGE

The Borrower hereby charges with full title guarantee the Secured Property to
the Secured Party to hold the same on trust as security for the payment and
discharge of the Secured Obligations.

2.2      DEPOSIT OF SHARE CERTIFICATES

Immediately upon execution of this Charge and as a condition to the initial
disbursement under the Loan Agreement, the Borrower shall deposit with the
Secured Party all share certificates and other documents of title relating to
the Initially Charged Shares together with stock transfer forms in respect of
the Initially Charged Shares duly executed in blank by or on behalf of the
Borrower.

2.3      FURTHER SHARES

Upon its becoming the beneficial or registered owner of any Charged Shares
(other than the Initially Charged Shares) the Borrower shall ensure that such
Charged Shares (unless already so registered) are registered in the name of the
Borrower and shall promptly notify the Secured Party of such circumstances and
deposit with the Secured Party any share certificates and other documents of
title representing such Charged Shares together with blank stock transfer forms
in respect of such Charged Shares duly executed by or on behalf of the Borrower.

The Borrower shall pay when due all calls or other requests for payments due in
respect of any of the Secured Property, but if the Borrower fails to make any
such payment the Secured Party may (but shall not be obliged to) make such
payment on behalf of the Borrower and if the Secured Party does so the Borrower
shall promptly on demand of the Secured Party pay to the Secured Party an amount
equal to such payment.

                                      -3-

<PAGE>

3.       DIVIDENDS, VOTING AND INFORMATION

3.1      SECURITY NOT ENFORCEABLE

Unless and until the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Borrower shall continue to be entitled to:

(a)      receive and retain all dividends, interest and other monies arising
         from the Secured Property; and

(b)      exercise all voting rights in relation to the Charged Shares;

provided that the Borrower shall not exercise such voting rights, or
otherwise permit or agree to (i) any variation of the rights attaching to or
conferred by the Secured Property or any part of it, (ii) any increase in the
issued share capital of the Company in any manner which, in the opinion of the
Secured Party, would, or would be reasonably likely to, impair the value of, or
prejudice the ability of the Secured Party to realise, the Security or (iii) in
violation of any provision of the Financing Documents.

3.2      SECURITY ENFORCEABLE

At any time after the Security has become enforceable pursuant to Clause 8.1,
the Secured Party shall be entitled to cause the Charged Shares to be registered
in its name and may at its discretion (in the name of the Borrower or otherwise
and without any further consent or authority from the Borrower):

(a)      exercise or refrain from exercising any voting rights in respect of the
         Charged Shares and revoke, or cause to be revoked, any proxies given
         pursuant to Clause 3.1 (Security not Enforceable);

(b)      apply all dividends, interest and other monies arising from the Secured
         Property as if they were proceeds of sale under this Charge;

(c)      exercise or refrain from exercising the rights of a legal owner of the
         Secured Property, including the right, in relation to any company whose
         shares or other securities are included in the Secured Property, to
         concur or participate in:

         (i)      the reconstruction, amalgamation, sale or other disposal of
                  such company or any of its assets or undertaking (including
                  the exchange, conversion or reissue of any shares or
                  securities as a consequence thereof),

         (ii)     the realisation, modification or variation of any rights or
                  liabilities attaching to any such shares or securities, and

         (iii)    the exercise, renunciation or assignment of any right to
                  subscribe for any such shares or securities,

                                      -4-

<PAGE>

                  in each case in such manner and on such terms as the Secured
                  Party may think fit, and all rights resulting from any such
                  action shall form part of the Secured Property.

3.3      INFORMATION

If the Borrower receives a balance sheet, profit and loss account or any notice,
report, statement or circular sent or delivered by the issuer of any Charged
Share to its members, it shall promptly deliver a copy to the Secured Party.

4.       CONTINUING SECURITY

4.1      CONTINUING AND INDEPENDENT SECURITY

This Charge shall constitute and be continuing security which shall not be
released or discharged by any intermediate payment or settlement of all or any
of the Secured Obligations, shall continue in full force and effect until the
end of the Security Period and is in addition to and independent of, and shall
not prejudice or merge with, any other security (or any right of set-off) which
the Secured Party may hold at any time for the Secured Obligations or any of
them.

4.2      AVOIDANCE OF PAYMENTS

Where any release, discharge or other arrangement in respect of any Secured
Obligation or any security any Secured Party may hold for such Secured
Obligation is given or made in reliance on any payment or other disposition
which is avoided or must be repaid in an insolvency, liquidation or otherwise,
and whether or not such Secured Party has conceded or compromised any claim that
any such payment or other disposition will or should be avoided or repaid, this
Charge and the Security shall continue as if such release, discharge or other
arrangement had not been given or made.

4.3      IMMEDIATE RECOURSE

The Secured Party shall not be obliged before exercising any of the rights
conferred on it by this Charge or by law to seek to recover amounts due from the
Borrower or to exercise or enforce any other rights or security it may have or
hold in respect of the Secured Obligations.

4.4      WAIVER OF DEFENCES

Neither the obligations of the Borrower under this Charge nor the Security
Documents and the rights, powers and remedies conferred on the Secured Party by
this Charge or by law shall be discharged, impaired or otherwise affected by:

(a)      the winding-up, dissolution, administration or re-organisation of the
         Borrower or any other person or any change in the status, function,
         control or ownership of the Borrower or any such person;

(b)      any of the Secured Obligations or any other security held by the
         Secured Party in respect thereof being or becoming illegal, invalid,
         unenforceable or ineffective in any respect;

                                      -5-

<PAGE>

(c)      any time or other indulgence being granted or agreed to with the
         Borrower or any other person in respect of the Secured Obligations or
         any of them or in respect of any other security held by the Secured
         Party in respect thereof;

(d)      any amendment to, or any variation, waiver or release of, the Secured
         Obligations or any of them or any other security held by the Secured
         Party in respect thereof;

(e)      any total or partial failure to take or perfect any security proposed
         to be taken in respect of the Secured Obligations or any of them;

(f)      any total or partial failure to realise the value of, or any release,
         discharge, exchange or substitution of, any other security held by the
         Secured Party in respect of the Secured Obligations or any of them; or

(g)      any other act, event or omission which might operate to discharge,
         impair or otherwise affect the obligations of the Borrower hereunder,
         the Security or any of the rights, powers and remedies conferred on the
         Secured Party by this Charge or by law.

4.5      NO COMPETITION

Any right which the Borrower may have (a) by way of contribution or indemnity in
relation to the Secured Obligations or (b) otherwise to claim or prove as a
creditor of the Company or any other person or its estate in competition whether
a right of subrogation or otherwise with the Secured Party, shall be exercised
by the Borrower only if and to the extent that the Secured Party so requires and
in such manner and upon such terms as the Secured Party may specify and the
Borrower shall hold any moneys, rights or security held or received by it as a
result of the exercise of any such rights on trust for the Secured Party for
application in accordance with the terms of this Charge as if such moneys,
rights or security were held or received by the Secured Party under this Charge.

4.6      APPROPRIATION

The Secured Party shall not be obliged to apply any sums held or received by it
in respect of the Secured Obligations in or towards payment of the Secured
Obligations and any such sum shall be held by or paid to the Secured Party for
application pursuant to the terms of this Charge.

4.7      SUBROGATION

The Borrower shall have no right of subrogation in respect of the performance of
any of its obligations under this Agreement and the Charge until all of the
Secured Obligations have been paid in full.

5.       REPRESENTATIONS AND WARRANTIES

The Borrower makes the representations and warranties set out in Clauses 5.1
(Status and Due Authorisation) to 5.12 (No Security from the Company) and
acknowledges that the Secured Party has entered into this Charge in reliance on
those representations and warranties.

                                      -6-

<PAGE>

5.1      STATUS AND DUE AUTHORISATION

It is a company duly incorporated with limited liability under the laws of the
Cayman Islands with power to enter into this Charge and to exercise its rights
and perform its obligations under this Charge and all corporate and other action
required to authorise its execution of this Charge and its performance of its
obligations hereunder has been duly taken.

5.2      BINDING OBLIGATIONS

The obligations expressed to be assumed by it in this Charge are legal and valid
obligations binding on it in accordance with the terms of this Charge which
constitutes a first priority fixed charge over the Charged Shares subject to any
general principles of law limiting its obligations which are referred to in any
legal opinion delivered pursuant to the Loan Agreement.

5.3      ALL ACTIONS TAKEN

All acts, conditions and things required to be done, fulfilled and performed in
order (a) to enable it lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to be assumed by it in this
Charge, (b) to ensure that the obligations expressed to be assumed by it in this
Charge are legal, valid and binding and (c) to make this Charge admissible in
evidence in its jurisdiction of incorporation have been done, fulfilled and
performed.

5.4      NO DEDUCTIONS OR WITHHOLDINGS

It will not be required to make any deduction or withholding from any payment it
may make under this Charge.

5.5      NO FILING OR STAMP TAXES

Under the laws of its jurisdiction of incorporation, it is not necessary that
this Charge be filed, recorded or enrolled with any court or other authority in
the Cayman Islands or that any ad valorem stamp, registration or similar tax be
paid on or in relation to this Charge.

5.6      NO WINDING-UP

It has not taken any corporate action nor have any other steps been taken or
legal proceedings been started or (to the best of its knowledge and belief)
threatened against it for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its assets or revenues.

5.7      NO ADVERSE INTERESTS

Subject only to the Security, no person other than the Borrower has any legal or
beneficial interest (or any right to claim any such interest) in the Secured
Property and the Borrower has not received notice of any such claim.

                                      -7-

<PAGE>

5.8      NO DISPOSALS

Save as contemplated in this Charge, it has not transferred, mortgaged, charged
or otherwise disposed of (or agreed to transfer, mortgage, charge or otherwise
dispose of), whether by way of security or otherwise, the benefit of all or any
of its right, title and interest in and to the Secured Property or any part of
it.

5.9      NO CONFLICTS

Its execution of this Charge and its exercise of its rights and performance of
its obligations hereunder do not and will not (a) conflict with the provisions
of (i) any agreement, mortgage, bond or other instrument or treaty to which it
is a party or which is binding upon it or any of its assets, (ii) its
constitutive documents or any rules and regulations made thereunder or (iii) any
applicable law, regulation or official or judicial order or (b) cause any of the
foregoing representations to be untrue.

5.10     THE CHARGED SHARES

Each Charged Share is fully paid or credited as fully paid, no calls have been
made in respect thereof and remain unpaid and no calls can be made in respect of
such Charged Share in the future and the terms of each Charged Share and of the
Memorandum and Articles of Association of the issuer of such Charged Share do
not restrict or otherwise limit the Borrower's right to transfer or charge such
Charged Share.

5.11     CHOICE OF LAW

In any proceedings taken in its jurisdiction of incorporation in relation to
this Charge, the choice of Cayman law as the governing law of this Charge and
any judgment obtained in the Cayman Islands will be recognised and enforced.

5.12     NO SECURITY FROM THE COMPANY

It has not requested or taken any security from the Company for any obligations
or liabilities of the Company to it.

5.13     REPETITION

The representations and warranties set out in Clauses 5.1 (Status and Due
Authorisation) to 5.12 (No Security from the Company);

(a)      shall survive the execution of each Financing Document and each
         drawdown under the Loan Agreement; and

(b)      are made on the date hereof and are deemed to be repeated on each Draw
         down Date during the Security Period with reference to the facts and
         circumstances then existing.

                                      -8-

<PAGE>

6.       UNDERTAKINGS

6.1      AUTHORISATIONS

The Borrower shall obtain, comply with the terms of and do all that is necessary
to maintain in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its jurisdiction of
incorporation to enable it lawfully to enter into and perform its obligations
under this Charge and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of this Charge.

6.2      NO ACTION

The Borrower shall not take any action which would cause any of the
representations made in Clause 5 (Representations and Warranties) to be untrue
at any time during the Security Period.

6.3      NOTIFICATION OF MISREPRESENTATION

The Borrower shall notify the Secured Party of the occurrence of any event which
results in or may reasonably be expected to result in any of the representations
made in Clause 5 (Representations and Warranties) being untrue when made or
when deemed to be repeated.

6.4      NO VARIATION OR RELEASE

The Borrower shall not, without the prior written consent of the Secured Party,
purport to vary or revoke any notice or instruction relating to this Charge
which it has given or may later give to any person.

6.5      NO ACTION TO JEOPARDISE SECURITY CONSTITUTED HEREBY

The Borrower shall not do or fail to do or cause or permit another person to do
or omit to do anything which is liable to jeopardise the effectiveness or
priority, in relation to the Security.

6.6      PAYMENT OF TAXES

In the event that the Secured Party exercises its rights under Clause 8.1 and
8.6 in order to effect the transfer and registration of the Charged Shares in
the name of the Secured Party and such actions lead to the imposition of any
Tax, be it pursuant to the Land Holding Companies Share Transfer Tax Law of the
Cayman Islands or otherwise, the Borrower shall be liable for the payment of
such Tax and should the Borrower fail to pay such Taxes the Secured Party shall
have the option, but not the obligation, to pay such Taxes and add whatever
amount is paid by the Secured Party in reduction of such Taxes to the total
amount outstanding under the Loan Agreement.

7.       FURTHER ASSURANCE

The Borrower shall from time to time and at its own expense give all such
assurances and do all such things as the Secured Party may require in order to
enable the Secured Party to perfect or protect the security created or intended
to be created by this Charge or to exercise any of the

                                      -9-

<PAGE>

rights conferred on it by this Charge or by law and to that intent the Borrower
shall execute all such instruments, deeds and agreements and give all such
notices and directions as the Secured Party may require.

8.       ENFORCEMENT OF SECURITY

8.1      SECURITY ENFORCEABLE

The Security shall become immediately enforceable if an Event of Default has
occurred and is continuing as defined above in Clause 1.3.

8.2      ENFORCEMENT

At any time after the Security has become enforceable, the Secured Party may in
its absolute discretion enforce all or any part of the Security and exercise any
of the rights conferred on it by this Charge or by law at such times and in such
manner as it thinks fit.

8.3      POWER OF SALE

At any time after the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Secured Party may (without notice to the Borrower)
sell or otherwise dispose of the Secured Property or any part of it and shall be
entitled to apply the proceeds of such sale or other disposal in paying the
costs of such sale or disposal and thereafter in or towards the discharge of the
Secured Obligations or otherwise as provided for in this Charge.

8.4      STATUTORY POWERS

For the purposes of all powers implied by statute the Secured Obligations shall
be deemed to have become due and payable on the date of this Charge.

8.5      REGISTRATION OF SHARES

The Secured Party shall be entitled at any time after the Security has become
enforceable pursuant to Clause 8.1 (Security Enforceable) to complete any stock
transfer forms then held by the Secured Party pursuant to this Charge in the
name of the Secured Party and thereupon the Borrower shall do whatever the
Secured Party requires in order to procure;

(a)      The prompt registration of such transfer or transfers and the prompt
         issue of a new certificate or certificates for the relevant Charged
         Shares in the name of the Secured Party who shall hold such Charged
         Shares as Security for the Obligations in furtherance of the power of
         sale provided for in Clause 8.3 above; and

(b)      Compliance by the Company with all requirements of the Land Holding
         Companies Share Transfer Tax Law (2002 Revision), as the same may be
         amended from time to time, or any legislation in substitution or in
         addition thereto and the Borrower shall provide all assistance as may
         be needed or required by the Company to enable it to meet such
         compliance whether financial or otherwise.

                                      -10-

<PAGE>

9.       RECEIVERS

9.1      APPOINTMENT

At any time after the Security has become enforceable (whether or not the
Secured Party shall have taken possession of the Secured Property), or following
the dissolution of the Borrower, and without any or further notice, the Secured
Party may, by Deed or writing signed by any officer or manager of the Secured
Party or any person authorised for this purpose by the Secured Party, appoint
any person to be Receiver, and may similarly remove any Receiver whether or not
it appoints any person in his place. If the Secured Party appoints more than one
person as Receiver, the Secured Party may give the relevant persons power to act
either jointly or severally.

9.2      SCOPE OF APPOINTMENT

Any Receiver may be appointed either Receiver of all the Secured Property or
Receiver of such part of the Secured Property as may be specified in the
appointment. In the latter case, the rights conferred on a Receiver by Clause 9
(Receivers) shall have effect as though every reference in that Clause to the
"SECURED PROPERTY" were a reference to the part of the Secured Property so
specified or any part thereof.

9.3      POWERS OF A RECEIVER

Any Receiver appointed under this Charge shall have all the powers granted to a
receiver under the applicable law and, in addition shall have the right, either
in his own name or in the name of the Borrower or otherwise and in such manner
and upon such terms and conditions as the Receiver thinks fit:

(a)      in connection with any sale or disposition of the Secured Property, to
         receive the consideration therefor in a lump sum or in instalments and
         to receive shares by way of consideration;

(b)      to grant options, licences or any other interest whatsoever in relation
         to the Secured Property;

(c)      to do all other acts and things which he may consider desirable or
         necessary for realising the Secured Property or incidental or conducive
         to any of the rights, powers or discretions conferred on a Receiver
         under, or by virtue of, this Charge; and

(d)      to exercise in relation to the Secured Property all the powers,
         authorities and things which he would be capable of exercising if he
         were the absolute beneficial owner of the same.

9.4      CONFLICT

If there is any ambiguity or conflict between the powers conferred on the
Receiver by the applicable law and the powers conferred by Clause 9.3 (Powers
of a Receiver), the powers conferred by Clause 9.3 (Powers) shall prevail.

                                      -11-

<PAGE>

9.5      SECURITY TRUSTEE OF BORROWER

Any Receiver shall be the agent of the Borrower for all purposes and the
Borrower shall be solely responsible for the contracts, engagements, acts,
omissions, defaults and losses of the Receiver and for all liabilities incurred
by the Receiver.

9.6      REMUNERATION

The Secured Party may, from time to time, determine the remuneration of any
Receiver and may direct payment of such remuneration out of moneys accruing to
the Receiver as Receiver but the Borrower alone shall be liable for the payment
of such remuneration and for all other costs, charges and expenses of the
Receiver, unless incurred as the result of the fraud, gross negligence or wilful
misconduct of the Receiver.

10.      APPLICATION OF PROCEEDS

Any moneys held or received by the Secured Party under or pursuant to this
Charge shall be applied by the Secured Party in reduction of the amounts due to
the Secured Party under the terms of the Loan Agreement.

11.      POWER OF ATTORNEY

11.1     APPOINTMENT

By way of security for the performance of its obligations hereunder, the
Borrower hereby irrevocably appoints the Secured Party, any Receiver of the
Secured Property or any part of it and its delegates and sub-delegates to be its
attorney acting severally (or jointly with any other such attorney or attorneys)
and on its behalf and in its name or otherwise to do any and every thing which
the Borrower is obliged to do under the terms of this Charge or which such
attorney considers necessary in order to enable the Secured Party or such
attorney to exercise the rights conferred on it by this Charge or by law.

11.2     RATIFICATION

The Borrower hereby ratifies and confirms and agrees to ratify and confirm
whatever any attorney appointed under this Charge shall do in its capacity as
such.

12.      RELEASE OF THE SECURITY

After the end of the Security Period, the Secured Party shall, at the request
and cost of the Borrower, execute all such documents and do all such other
things as may be required to release the Security, in each case without recourse
to or any representation or warranty by or from the Security Trustee.

13.      COSTS AND EXPENSES

                                      -12-

<PAGE>

13.1     TRANSACTION COSTS

The Borrower agrees with the Secured Party that it shall on demand of the
Secured Party reimburse the Secured Party on a full indemnity basis all costs
and expenses (including legal fees), incurred by, or any remuneration payable to
the Secured Party in connection with the preparation, negotiation, execution and
perfection of this Charge and the implementation of the arrangements
contemplated herein.

13.2     STAMP TAX

The Borrower shall pay any and all stamp, registration and other taxes to which
this Charge or any judgment given in connection herewith is or at any time may
be subject and shall on demand indemnify the Secured Party against any
liabilities, costs, claims and expenses (including legal fees) resulting from
any failure to pay or delay in paying any such tax.

13.3     INDEMNITY

The Borrower shall indemnify and hold harmless the Secured Party from and
against any and all costs, claims losses, expenses (including legal fees) and
liabilities, which the Secured Party may incur as a result of the occurrence of
any Event of Default, the enforcement of the Security or the exercise or
enforcement by the Secured Party of any of the rights conferred on it by this
Charge or by law unless incurred by the Secured Party as a result of its own
fraud, wilful misconduct or gross negligence or the fraud, gross negligence or
wilful misconduct of its delegates and subdelegates.

14.      NO WAIVER; REMEDIES CUMULATIVE

No failure or delay on the part of the Secured Party in exercising any right,
power or privilege hereunder or under any other Financing Document and no course
of dealing between the Borrower and the Secured Party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Secured Party
to take any other or further action in any circumstances without notice or
demand. All remedies, either under this Agreement or any other Financing
Document or pursuant to any applicable law or otherwise afforded to the Secured
Party shall be cumulative and not alternative.

15.      ADDITIONAL PROVISIONS

15.1     SEVERABILITY

Any provision hereof which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of any provision in any other
jurisdiction.

                                      -13-

<PAGE>

15.2     CURRENCY CONVERSION

In order to apply any sum held or received by the Secured Party in or towards
payment of the Secured Obligations, the Secured Party may purchase an amount in
another currency and the rate of exchange to be used shall be that at which, at
such time as it considers appropriate, the Secured Party is able to effect such
purchase.

15.3     JUDGMENT CURRENCY

This is an international transaction in which the specification of Dollars and
payment in the Cayman Islands is of the essence, and the obligations of the
Borrower under this Charge and under the other Financing Documents to make
payment to (or for the account of) the Secured Party in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any other currency or in another place except to
the extent that such tender or recovery results in the effective receipt by the
Secured Party in Cayman of the full amount of Dollars payable to the Secured
Party under this Charge.

(a)      If any sum due from the Borrower under this Charge (a "SUM"), or any
         order, judgment or award given or made in relation to a Sum, has to be
         converted from the currency (the "FIRST CURRENCY") in which that Sum
         is payable into another currency (the "SECOND CURRENCY") for the
         purpose of:

         (i)      making or filing a claim or proof against the Company or the
                  Borrower;

         (ii)     obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

         the Borrower shall as an independent obligation, within three (3)
         Business Days of demand, indemnify the Secured Party against any cost,
         loss or liability arising out of or as a result of the conversion
         including any discrepancy between (A) the rate of exchange used to
         convert that Sum from the First Currency into the Second Currency and
         (B) the rate or rates of exchange available to the Secured Party at the
         time of its receipt of that Sum.

(b)      The Borrower waives any right it may have in any jurisdiction to pay
         any amount under this Charge in a currency or currency unit other than
         that in which it is expressed to be payable.

15.4     RIGHTS CUMULATIVE

The rights and remedies provided by this Charge are cumulative and not exclusive
of any rights or remedies provided by law.

15.5     MORTGAGEE IN POSSESSION

Neither the Secured Party nor any Receiver shall by reason of its taking any
action permitted by this Charge or its taking possession of the Secured Property
or any part of it be liable to account as mortgagee in possession or be liable
for any loss on realisation or for any default or omission

                                      -14-

<PAGE>

for which a mortgagee in possession might be liable other than for its own
fraud, gross negligence and wilful misconduct, or the fraud, gross negligence or
wilful misconduct of its delegates.

16.      ASSIGNMENT

16.1     THE BORROWER'S RIGHTS

The rights of the Borrower under this Charge are not assignable or transferable
and the Borrower agrees that it will not purport to assign all or any such
rights.

16.2     THE SECURED PARTY'S RIGHTS

The rights of the Secured Party under this Charge are assignable in whole or in
part and the Secured Party may assign all or any such rights without the consent
of the Borrower. The Secured Party shall provide written notice to the Borrower
of any such assignment.

17.      NOTICES

(a)      All notices, requests, approvals, consents and other communications
         provided for hereunder shall be in writing (including, unless the
         context expressly otherwise provides, by facsimile transmission,
         provided that any matter transmitted by the Borrower by facsimile (i)
         shall be promptly confirmed by a telephone call to the recipient at the
         number specified on the applicable signature page hereof, and (ii)
         shall be followed promptly by a hard copy original thereof by express
         courier) and faxed or delivered, to the address or facsimile number
         specified for notices on the applicable signature page hereof or to
         such other address as shall be designated by such party in a written
         notice to the other parties hereto.

(b)      All such notices, requests, approvals, consents and communications (i)
         sent by express courier will be effective upon delivery to or refusal
         to accept delivery by the addressee, and (ii) transmitted by facsimile
         will be effective when sent and facsimile confirmation received; except
         that all notices and other communications to any Agent shall not be
         effective until actually received.

(c)      The Borrower acknowledges and agrees that any agreement of the Secured
         Party to receive certain notices by telephone and facsimile is solely
         for the convenience and at the request of the Borrower. The Secured
         Party shall be entitled to rely on the authority of any Person
         purporting to be a Person authorized by the Borrower to give such
         notice and the Secured Party shall not have any liability to the
         Borrower or other Person on account of any action taken or not taken by
         the Secured Party in reliance upon such telephonic or facsimile notice.

(d)      All notices, requests and other communications hereunder and under the
         other Financing Documents shall be in the English language unless
         otherwise agreed by the parties hereto.

                                      -15-

<PAGE>

18.      GOVERNING LAW AND JURISDICTION

THIS CHARGE IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE CAYMAN ISLANDS.

19.      SUBMISSION

(a)      For the exclusive benefit of the Secured Party, the Borrower
         irrevocably agrees that the courts of Cayman are to have jurisdiction
         to settle any claims or disputes arising under, out of or in connection
         with this Charge (including without limitation any claim or dispute
         relating to the validity, interpretation, performance, termination or
         enforcement of this Charge) and that accordingly any suit, action or
         proceedings in that respect (together in Clauses 19 and 20 referred to
         as "PROCEEDINGS") may be brought in such courts.

(b)      The Borrower irrevocably waives and agrees not to raise any objection
         which it may have now or hereafter to the laying of the venue of any
         Proceedings in the courts of Cayman and any claim that any such
         Proceedings have been brought in an inconvenient or inappropriate
         forum.

(c)      The Borrower irrevocably agrees not to take Proceedings in any court of
         competent jurisdiction other than the courts of Cayman, save with
         respect to any counterclaim asserted by the Borrower in the course of
         proceedings previously commenced by the Secured Party. Nothing
         contained in this Clause 19 shall limit the right of the Secured Party
         to take Proceedings against the Borrower in any other court of
         competent jurisdiction, nor shall the taking of Proceedings in one or
         more jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

20.      JUDGMENTS AND IMMUNITY

(a)      The Borrower recognizes and acknowledges that this Charge constitutes a
         commercial transaction and accordingly it acknowledges and agrees that
         it is not entitled to plead, and pursuant to this Clause 20 hereby
         waives to the fullest extent permitted by law any right to claim,
         sovereign immunity for any purpose whatsoever, including, but not
         limited to, any right to plead sovereign immunity in respect of any
         Proceedings pursuant to this Charge.

(b)      The Borrower consents generally, in respect of any Proceedings pursuant
         to this Charge for the purpose of enforcing any order, judgment or
         award, to the giving of any relief or the issuing of any process in
         connection with such order, judgment or award including, without
         limitation, the making, enforcement or execution against any property
         of any order, judgment or award and to the extent that the Borrower may
         be entitled in any jurisdiction to claim for itself or its property
         immunity in respect of its obligations under this Charge from any suit,
         execution, attachment (whether in aid of execution, before judgment or
         otherwise) or legal process or to the extent that in any jurisdiction
         there may be attributed to itself or its property such immunity, the
         Borrower agrees not to claim and hereby irrevocably waive such immunity
         to the fullest extent permitted by the laws of such jurisdiction.

                                      -16-

<PAGE>

(c)      The Borrower unconditionally and irrevocably agrees, with respect to
         any final order, judgment or award in any Proceedings made pursuant to
         this Charge and not subject to appeal (a "JUDGMENT"), that:

         (i)      the Judgment shall be conclusive and binding upon it;

         (ii)     it shall be bound by and recognize the Judgment in any
                  jurisdiction;

         (iii)    to the extent permitted by law, it shall not claim, invoke on
                  its behalf or for its benefit any right it may have under the
                  laws of Cayman, or any other state or jurisdiction, to
                  prevent, delay, hinder, nullify or in any other way obstruct
                  the enforcement or execution of the Judgment; and

         (iv)     to the extent permitted by law, it shall not, and shall
                  irrevocably waive any right to, challenge the Judgment on any
                  ground or the enforcement or execution of the Judgment in any
                  jurisdiction (other than by way of appeal in the original
                  jurisdiction).

21.      COUNTERPARTS AND EFFECTIVENESS

21.1     COUNTERPARTS

This Charge may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

21.2     EFFECTIVENESS

This Charge shall take effect and be delivered as a deed on the date on which it
is stated to be made.

22.      AMENDMENT OR WAIVER

No provision of this Agreement may be amended, supplemented, modified or waived,
except by written instrument signed by each of the parties hereto.

                                     * * *

                                      -17-

<PAGE>

IN WITNESS WHEREOF this Charge has been executed as a deed by the parties hereto
and has been delivered on date stated at the beginning of this Deed.

THE BORROWER                                       )
Executed on behalf of                              )  /s/ Jeffrey M. Parker
CONSOLIDATED WATER CO. LTD.                        )
as a deed by:                                      )

         Name: /s/ Mr. Jeffrey Parker
         Title: Chief Executive Officer

Notice Address:
Address:
P.O. Box 1114 GT
Trafalgar House
Grand Cayman, Cayman Islands.
Attention: Mr. Jeffrey Parker

Telephone No.: 345 945-4277
Telecopier No. 345 949-2957

SECURED PARTY                                      )
EXECUTED ON BEHALF OF                              ) /s/ Bruce John
SCOTIABANK (CAYMAN ISLANDS) LTD.                   )
as a deed by:

         Name: /s/ Mr. Bruce John
         Title: Commercial Banking Manager

Notice Address:
Address:
Scotiabank (Cayman Islands) Ltd.
Scotia Centre
Cardinal Avenue
P.O. Box 689
Grand Cayman

Attention: Commercial Banking Manager

Telephone No.: 345 949-7666
Telecopier No. 345 949-5130

<PAGE>

         By its execution of this Equitable Charge of Shares, OCEAN CONVERSION
CAYMAN LTD. hereby acknowledges and agrees with the terms and conditions hereof,
and irrevocably undertakes that should the Secured Party exercise its rights
under this Equitable Charge of Shares, Ocean Conversion Cayman Ltd. shall not
take any action, or fail to take any required action, which would have the
effect of frustrating the Secured Party's ability to be recorded in the Register
of Members as the registered legal and beneficial owner of the Shares.

OCEAN CONVERSION CAYMAN LTD.

Name: /s/ Mr. Jeffrey Parker

Title: Chief Executive Officer

                                      -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>24
<FILENAME>g80228exv10w44.txt
<DESCRIPTION>EQUITABLE CHARGE OF SHARES
<TEXT>
<PAGE>

                                                                  EXHIBIT 10.44

                          THE 7TH DAY OF FEBRUARY, 2003

                           EQUITABLE CHARGE OF SHARES
      (Collateral to a Substituted Debenture bearing even date herewith and
            entered into between the Borrower and the Secured Party)

                                     BETWEEN

                                 DESALCO LIMITED

                                       AND

                        SCOTIABANK (CAYMAN ISLANDS) LTD.
                                as Secured Party

                         with respect to the shares in

                             DESALCO (BABADOS) LTD.

<PAGE>

THIS COLLATERAL CHARGE ("CHARGE") is made on the 7th day of February, 2002
between the following parties:

(1)      DESALCO LIMITED, a company incorporated in the Cayman Islands, with its
         registered office located in George Town, Grand Cayman, Cayman Islands,
         (the "DESALCO"); and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. a banking institution organised and
         existing under the laws of the Cayman Islands, with its principal place
         of business located at Scotiabank Centre, Cardinal Avenue, Georgetown,
         Grand Cayman (the "SECURED PARTY").

RECITALS

A.       The Borrower currently holds one hundred percent (100%) of the shares
         of DesalCo who, in turn, holds one hundred percent (100%) of the shares
         of DesalCo (Barbados) Ltd. (the "COMPANY").

B.       The Secured Party has agreed to provide certain loans to the Borrower.

C.       Such loans will be made subject to the terms and conditions of a Loan
         Agreement, dated the date hereof, among the Borrower and the Secured
         Party (the "LOAN AGREEMENT").

D.       It is a condition to the first disbursement under the Loan Agreement
         that DesalCo shall have entered into this Charge.

E.       The Boards of Directors of DesalCo are satisfied that the DesalCo is
         entering into this Charge for the purpose of its business and that by
         doing so it benefits DesalCo.

F.       DesalCo and the Secured Party intend this Charge to take effect as a
         deed.

G.       This Collateral Charge is intended to be collateral to a Substituted
         Debenture bearing even date herewith entered into between the Borrower
         and the Secured Party and shall be stamped as such.

1.       INTERPRETATION

1.1      DEFINITIONS

(a)      Capitalized terms used in this Charge without definition have the
         meanings specified in Annex A to the Loan Agreement.

(b)      In addition the following terms in this Charge have the meanings given
         to them in this Clause.

"CHARGED SHARES" means any shares from time to time forming part of the Secured
Property.

"FINANCING DOCUMENTS" means collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

                                      -2-

<PAGE>

"INITIALLY CHARGED SHARES" means all the shares in the Company specified in
recital "A" to this Charge of which the Company is the beneficial or registered
owner on the date of this Charge.

"OBLIGATIONS" shall mean, collectively, all loans, advances, debts, liabilities,
and obligations, howsoever arising, owed by the Borrower under a Financing
Document or otherwise to the Secured Party.

"RECEIVER" means an administrative receiver, a receiver and manager or any other
receiver (whether appointed pursuant to this Charge, pursuant to any statute, by
a court or otherwise) of the Secured Property or any part of it.

"SECURED OBLIGATIONS" means all present and future Obligations.

"SECURED PROPERTY" means the Initially Charged Shares and any other shares in
the Company of which DesalCo is or becomes the beneficial or registered owner
together with all dividends, stocks, shares, warrants, securities, rights,
monies or other property accruing on or derived from such shares.

"SECURITY" means the security created by this Charge.

"SECURITY PERIOD" means the period beginning on the date of this Charge and
ending on the date upon which:

(a)      the Secured Party is under no obligation (whether actual or contingent)
         to make advances or provide other financial accommodation to the
         Borrower under any of the Financing Documents; and

(b)      all Secured Obligations have been unconditionally and irrevocably paid
         and discharged in full.

1.2      INTERPRETATION

The principles of interpretation set forth in Section 18.13 to the Loan
Agreement shall apply to this Charge.

1.3      CONTINUING EVENTS OF DEFAULT

An event which constitutes an Event of Default shall be regarded as continuing
if (a) the circumstances constituting such event continue and (b) the Secured
Party has not waived such of its rights under the Financing Documents as arise
as a result of the occurrence of that event.

1.4      CERTIFICATES

A certificate of the Secured Party as to the amount of any Secured Obligation
owed to it shall be prima facie evidence of the existence and amount of such
Secured Obligation.

                                      -3-

<PAGE>

1.5      STATUTES

Any reference in this Charge to a statute or statutory provision shall, unless
the contrary is indicated, be construed as a reference to such statute or
statutory provision as the same shall have been or may be amended or re-enacted.

1.6      NOMINEES

If the Secured Party causes or requires the Charged Shares to be registered in
the name of a nominee for the Secured Party, any reference in this Charge to the
Secured Party shall, if the context so permits or requires, be construed as a
reference to the Secured Party and such nominee.

1.7      CLAUSE AND SCHEDULE HEADINGS

Clause and Schedule headings are for ease of reference only and shall not affect
the construction of this Charge.

2.       EQUITABLE CHARGE

2.1      CHARGE

DesalCo hereby charges with full title guarantee the Secured Property to the
Secured Party to hold the same on trust as security for the payment and
discharge of the Secured Obligations.

2.2      DEPOSIT OF SHARE CERTIFICATES

Immediately upon execution of this Charge and as a condition to the initial
disbursement under the Loan Agreement, DesalCo shall deposit with the Secured
Party all share certificates and other documents of title relating to the
Initially Charged Shares together with stock transfer forms in respect of the
Initially Charged Shares duly executed in blank by or on behalf of DesalCo.

2.3      FURTHER SHARES

Upon its becoming the beneficial or registered owner of any Charged Shares
(other than the Initially Charged Shares) DesalCo shall ensure that such Charged
Shares (unless already so registered) are registered in the name of the DesalCo
and shall promptly notify the Secured Party of such circumstances and deposit
with the Secured Party any share certificates and other documents of title
representing such Charged Shares together with blank stock transfer forms in
respect of such Charged Shares duly executed by or on behalf of DesalCo.

The Borrower shall pay when due all calls or other requests for payments due in
respect of any of the Secured Property, but if the Borrower fails to make any
such payment the Secured Party may (but shall not be obliged to) make such
payment on behalf of the Borrower and if the Secured Party does so the Borrower
shall promptly on demand of the Secured Party pay to the Secured Party an amount
equal to such payment.

                                      -4-

<PAGE>

3.       DIVIDENDS, VOTING AND INFORMATION

3.1      SECURITY NOT ENFORCEABLE

Unless and until the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), DesalCo shall continue to be entitled to:

(a)      receive and retain all dividends, interest and other monies arising
         from the Secured Property; and

(b)      exercise all voting rights in relation to the Charged Shares;

provided that DesalCo shall not exercise such voting rights, or otherwise permit
or agree to (i) any variation of the rights attaching to or conferred by the
Secured Property or any part of it, (ii) any increase in the issued share
capital of the Company in any manner which, in the opinion of the Secured Party,
would, or would be reasonably likely to, impair the value of, or prejudice the
ability of the Secured Party to realise, the Security or (iii) in violation of
any provision of the Financing Documents.

3.2      SECURITY ENFORCEABLE

At any time after the Security has become enforceable pursuant to Clause 8.1,
the Secured Party shall be entitled to cause the Charged Shares to be registered
in its name and may at its discretion (in the name of DesalCo or otherwise and
without any further consent or authority from the DesalCo):

(a)      exercise or refrain from exercising any voting rights in respect of the
         Charged Shares and revoke, or cause to be revoked, any proxies given
         pursuant to Clause 3.1 (Security not Enforceable);

(b)      apply all dividends, interest and other monies arising from the Secured
         Property as if they were proceeds of sale under this Charge;

(c)      exercise or refrain from exercising the rights of a legal owner of the
         Secured Property, including the right, in relation to any company whose
         shares or other securities are included in the Secured Property, to
         concur or participate in:

         (i)      the reconstruction, amalgamation, sale or other disposal of
                  such company or any of its assets or undertaking (including
                  the exchange, conversion or reissue of any shares or
                  securities as a consequence thereof),

         (ii)     the realisation, modification or variation of any rights or
                  liabilities attaching to any such shares or securities, and

         (iii)    the exercise, renunciation or assignment of any right to
                  subscribe for any such shares or securities,

                                      -5-

<PAGE>

                  in each case in such manner and on such terms as the Secured
                  Party may think fit, and all rights resulting from any such
                  action shall form part of the Secured Property.

3.3      INFORMATION

If DesalCo receives a balance sheet, profit and loss account or any notice,
report, statement or circular sent or delivered by the issuer of any Charged
Share to its members, it shall promptly deliver a copy to the Secured Party.

4.       CONTINUING SECURITY

4.1      CONTINUING AND INDEPENDENT SECURITY

This Charge shall constitute and be continuing security which shall not be
released or discharged by any intermediate payment or settlement of all or any
of the Secured Obligations, shall continue in full force and effect until the
end of the Security Period and is in addition to and independent of, and shall
not prejudice or merge with, any other security (or any right of set-off) which
the Secured Party may hold at any time for the Secured Obligations or any of
them.

4.2      AVOIDANCE OF PAYMENTS

Where any release, discharge or other arrangement in respect of any Secured
Obligation or any security any Secured Party may hold for such Secured
Obligation is given or made in reliance on any payment or other disposition
which is avoided or must be repaid in an insolvency, liquidation or otherwise,
and whether or not such Secured Party has conceded or compromised any claim that
any such payment or other disposition will or should be avoided or repaid, this
Charge and the Security shall continue as if such release, discharge or other
arrangement had not been given or made.

4.3      IMMEDIATE RECOURSE

The Secured Party shall not be obliged before exercising any of the rights
conferred on it by this Charge or by law to seek to recover amounts due from the
Borrower or to exercise or enforce any other rights or security it may have or
hold in respect of the Secured Obligations.

4.4      WAIVER OF DEFENCES

The obligations of DesalCo under this Charge and the Security Documents to which
it is a party and the rights, powers and remedies conferred on the Secured Party
by this Charge or by law shall not be discharged, impaired or otherwise affected
by:

(a)      the winding-up, dissolution, administration or re-organisation of the
         Borrower or DesalCo or any other person or any change in the status,
         function, control or ownership of the Borrower or DesalCo or any such
         person;

(b)      any of the Secured Obligations or any other security held by the
         Secured Party in respect thereof being or becoming illegal, invalid,
         unenforceable or ineffective in any respect;

                                      -6-

<PAGE>

(c)      any time or other indulgence being granted or agreed to with the
         Borrower, DesalCo or any other person in respect of the Secured
         Obligations or any of them or in respect of any other security held by
         the Secured Party in respect thereof;

(d)      any amendment to, or any variation, waiver or release of, the Secured
         Obligations or any of them or any other security held by the Secured
         Party in respect thereof;

(e)      any total or partial failure to take or perfect any security proposed
         to be taken in respect of the Secured Obligations or any of them;

(f)      any total or partial failure to realise the value of, or any release,
         discharge, exchange or substitution of, any other security held by the
         Secured Party in respect of the Secured Obligations or any of them; or

(g)      any other act, event or omission which might operate to discharge,
         impair or otherwise affect the obligations of the Borrower or DesalCo
         hereunder, the Security or any of the rights, powers and remedies
         conferred on the Secured Party by this Charge or by law.

4.5      NO COMPETITION

Any right which the Borrower or DesalCo may have (a) by way of contribution or
indemnity in relation to the Secured Obligations or (b) otherwise to claim or
prove as a creditor of the Company or any other person or its estate in
competition whether a right of subrogation or otherwise with the Secured Party,
shall be exercised by the Borrower and/or DesalCo only if and to the extent that
the Secured Party so requires and in such manner and upon such terms as the
Secured Party may specify and the Borrower and DesalCo shall hold any moneys,
rights or security held or received by each of them as a result of the exercise
of any such rights on trust for the Secured Party for application in accordance
with the terms of this Charge as if such moneys, rights or security were held or
received by the Secured Party under this Charge.

4.6      APPROPRIATION

The Secured Party shall not be obliged to apply any sums held or received by it
in respect of the Secured Obligations in or towards payment of the Secured
Obligations and any such sum shall be held by or paid to the Secured Party for
application pursuant to the terms of this Charge.

4.7      SUBROGATION

DesalCo shall not have any right of subrogation in respect of the performance of
any of its respective obligations under this Agreement and the Charge until all
of the Secured Obligations have been paid in full.

5.       REPRESENTATIONS AND WARRANTIES

DesalCo makes the representations and warranties set out in Clauses 5.1 (Status
and Due Authorisation) to 5.12 (No Security from the Company) and acknowledge
that the Secured Party has entered into this Charge in reliance on those
representations and warranties.

                                      -7-

<PAGE>

5.1      STATUS AND DUE AUTHORISATION

It is a company duly incorporated with limited liability under the laws of the
Cayman Islands with power to enter into this Charge and to exercise its rights
and perform its obligations under this Charge and all corporate and other action
required to authorise its execution of this Charge and its performance of its
obligations hereunder has been duly taken.

5.2      BINDING OBLIGATIONS

The obligations expressed to be assumed by it in this Charge are legal and valid
obligations binding on it in accordance with the terms of this Charge which
constitutes a first priority fixed charge over the Charged Shares subject to any
general principles of law limiting its obligations which are referred to in any
legal opinion delivered pursuant to the Loan Agreement.

5.3      ALL ACTIONS TAKEN

All acts, conditions and things required to be done, fulfilled and performed in
order (a) to enable it lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to be assumed by it in this
Charge, (b) to ensure that the obligations expressed to be assumed by it in this
Charge are legal, valid and binding and (c) to make this Charge admissible in
evidence in its jurisdiction of incorporation have been done, fulfilled and
performed.

5.4      NO DEDUCTIONS OR WITHHOLDINGS

It will not be required to make any deduction or withholding from any payment it
may make under this Charge.

5.5      NO FILING OR STAMP TAXES

Under the laws of its jurisdiction of incorporation, it is not necessary that
this Charge be filed, recorded or enrolled with any court or other authority in
the Cayman Islands or that any ad valorem stamp, registration or similar tax be
paid on or in relation to this Charge.

5.6      NO WINDING-UP

It has not taken any corporate action nor have any other steps been taken or
legal proceedings been started or (to the best of its knowledge and belief)
threatened against it for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its assets or revenues.

5.7      NO ADVERSE INTERESTS

Subject only to the Security, no person other than DesalCo has any legal or
beneficial interest (or any right to claim any such interest) in the Secured
Property and DesalCo has not received notice of any such claim.

                                      -8-

<PAGE>

5.8      NO DISPOSALS

Save as contemplated in this Charge, it has not transferred, mortgaged, charged
or otherwise disposed of (or agreed to transfer, mortgage, charge or otherwise
dispose of), whether by way of security or otherwise, the benefit of all or any
of its right, title and interest in and to the Secured Property or any part of
it.

5.9      NO CONFLICTS

Its execution of this Charge and its exercise of its rights and performance of
its obligations here-under do not and will not (a) conflict with the provisions
of (i) any agreement, mortgage, bond or other instrument or treaty to which it
is a party or which is binding upon it or any of its assets, (ii) its
constitutive documents or any rules and regulations made thereunder or (iii) any
applicable law, regulation or official or judicial order or (b) cause any of the
foregoing representations to be untrue.

5.10     THE CHARGED SHARES

Each Charged Share is fully paid or credited as fully paid, no calls have been
made in respect thereof and remain unpaid and no calls can be made in respect of
such Charged Share in the future and the terms of each Charged Share and of the
Memorandum and Articles of Association of the issuer of such Charged Share do
not restrict or otherwise limit DesalCo's right to transfer or charge such
Charged Share.

5.11     CHOICE OF LAW

In any proceedings taken in its jurisdiction of incorporation in relation to
this Charge, the choice of Barbados law as the governing law of this Charge and
any judgment obtained in Barbados will be recognised and enforced.

5.12     NO SECURITY FROM THE COMPANY

It has not requested or taken any security from the Company for any obligations
or liabilities of the Company to it.

5.13     REPETITION

The representations and warranties set out in Clauses 5.1 (Status and Due
Authorisation) to 5.12 (No Security from the Company):

(a)      shall survive the execution of each Financing Document and each
         drawdown under the Loan Agreement; and

(b)      are made on the date hereof and are deemed to be repeated on each Draw
         down Date during the Security Period with reference to the facts and
         circumstances then existing.

                                      -9-

<PAGE>

6.       UNDERTAKINGS

6.1      AUTHORISATIONS

DesalCo shall obtain, comply with the terms of and do all that is necessary to
maintain in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its jurisdiction of
incorporation to enable it lawfully to enter into and perform its obligations
under this Charge and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of this Charge.

6.2      NO ACTION

DesalCo shall not take any action which would cause any of the representations
made in Clause 5 (Representations and Warranties) to be untrue at any time
during the Security Period.

6.3      NOTIFICATION OF MISREPRESENTATION

DesalCo shall notify the Secured Party of the occurrence of any event which
results in or may reasonably be expected to result in any of the representations
made in Clause 5 (Representations and Warranties) being untrue when made or
when deemed to be repeated.

6.4      NO VARIATION OR RELEASE

DesalCo shall not, without the prior written consent of the Secured Party,
purport to vary or revoke any notice or instruction relating to this Charge
which it has given or may later give to any person.

6.5      NO ACTION TO JEOPARDISE SECURITY CONSTITUTED HEREBY

DesalCo shall not do or fail to do or cause or permit another person to do or
omit to do anything which is liable to jeopardise the effectiveness or priority,
in relation to the Security.

7.       FURTHER ASSURANCE

DesalCo shall from time to time and at its own expense give all such assurances
and do all such things as the Secured Party may require in order to enable the
Secured Party to perfect or protect the security created or intended to be
created by this Charge or to exercise any of the rights conferred on it by this
Charge or by law and to that intent DesalCo shall execute all such instruments,
deeds and agreements and give all such notices and directions as the Secured
Party may require.

8.       ENFORCEMENT OF SECURITY

8.1      SECURITY ENFORCEABLE

The Security shall become immediately enforceable if an Event of Default has
occurred and is continuing as defined above in Clause 1.3.

                                      -10-

<PAGE>

8.2      ENFORCEMENT

At any time after the Security has become enforceable, the Secured Party may in
its absolute discretion enforce all or any part of the Security and exercise any
of the rights conferred on it by this Charge or by law at such times and in such
manner as it thinks fit.

8.3      POWER OF SALE

At any time after the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Secured Party may (without notice to the Borrower or
DesalCo) sell or otherwise dispose of the Secured Property or any part of it and
shall be entitled to apply the proceeds of such sale or other disposal in paying
the costs of such sale or disposal and thereafter in or towards the discharge of
the Secured Obligations or otherwise as provided for in this Charge.

8.4      STATUTORY POWERS

For the purposes of all powers implied by statute the Secured Obligations shall
be deemed to have become due and payable on the date of this Charge.

8.5      REGISTRATION OF SHARES

The Secured Party shall be entitled at any time after the Security has become
enforceable pursuant to Clause 8.1 (Security Enforceable) to complete any stock
transfer forms then held by the Secured Party pursuant to this Charge in the
name of the Secured Party and thereupon the Borrower and DesalCo shall do
whatever the Secured Party requires in order to procure:

(a)      The prompt registration of such transfer or transfers and the prompt
         issue of a new certificate or certificates for the relevant Charged
         Shares in the name of the Secured Party who shall hold such Charged
         Shares as Security for the Obligations in furtherance of the power of
         sale provided for in Clause 8.3 above; and

(b)      Compliance by the Company with all requirements of the Land Holding
         Companies Share Transfer Tax Law (2002 Revision), as the same may be
         amended from time to time, or any legislation in substitution or in
         addition thereto and the Borrower and DesalCo shall provide all
         assistance as may be needed or required by the Company to enable it to
         meet such compliance whether financial or otherwise.

9.       RECEIVERS

9.1      APPOINTMENT

At any time after the Security has become enforceable (whether or not the
Secured Party shall have taken possession of the Secured Property), or following
the dissolution of DesalCo, and without any or further notice, the Secured Party
may, by Deed or writing signed by any officer or manager of the Secured Party or
any person authorised for this purpose by the Secured Party, appoint any person
to be Receiver, and may similarly remove any Receiver whether or not it appoints
any person in his place. If the Secured Party appoints more than one person as

                                      -11-

<PAGE>

Receiver, the Secured Party may give the relevant persons power to act either
jointly or severally.

9.2      SCOPE OF APPOINTMENT

Any Receiver may be appointed either Receiver of all the Secured Property or
Receiver of such part of the Secured Property as may be specified in the
appointment. In the latter case, the rights conferred on a Receiver by Clause 9
(Receivers) shall have effect as though every reference in that Clause to the
"SECURED PROPERTY" were a reference to the part of the Secured Property so
specified or any part thereof.

9.3      POWERS OF A RECEIVER

Any Receiver appointed under this Charge shall have all the powers granted to a
receiver under the applicable law and, in addition shall have the right, either
in his own name or in the name of DesalCo or otherwise and in such manner and
upon such terms and conditions as the Receiver thinks fit:

(a)      in connection with any sale or disposition of the Secured Property, to
         receive the consideration therefor in a lump sum or in instalments and
         to receive shares by way of consideration;

(b)      to grant options, licences or any other interest whatsoever in relation
         to the Secured Property;

(c)      to do all other acts and things which he may consider desirable or
         necessary for realising the Secured Property or incidental or conducive
         to any of the rights, powers or discretions conferred on a Receiver
         under, or by virtue of, this Charge; and

(d)      to exercise in relation to the Secured Property all the powers,
         authorities and things which he would be capable of exercising if he
         were the absolute beneficial owner of the same.

9.4      CONFLICT

If there is any ambiguity or conflict between the powers conferred on the
Receiver by the applicable law and the powers conferred by Clause 9.3 (Powers of
a Receiver), the powers conferred by Clause 9.3 (Powers) shall prevail.

9.5      SECURITY TRUSTEE OF BORROWER

Any Receiver shall be the agent of DesalCo for all purposes and DesalCo shall be
solely responsible for the contracts, engagements, acts, omissions, defaults and
losses of the Receiver and for all liabilities incurred by the Receiver.

9.6      REMUNERATION

The Secured Party may, from time to time, determine the remuneration of any
Receiver and may direct payment of such remuneration out of moneys accruing to
the Receiver as Receiver but

                                      -12-

<PAGE>

DesalCo shall be the only parties liable for the payment of such remuneration
and for all other costs, charges and expenses of the Receiver, unless incurred
as the result of the fraud, gross negligence or wilful misconduct of the
Receiver.

10.      APPLICATION OF PROCEEDS

Any moneys held or received by the Secured Party under or pursuant to this
Charge shall be applied by the Secured Party in reduction of the amounts due to
the Secured Party under the terms of the Loan Agreement.

11.      POWER OF ATTORNEY

11.1     APPOINTMENT

By way of security for the performance of its obligations hereunder, DesalCo
hereby irrevocably appoint the Secured Party, any Receiver of the Secured
Property or any part of it and its delegates and sub-delegates to be their
respective attorney acting severally (or jointly with any other such attorney or
attorneys) and on its behalf and in its name or otherwise to do any and every
thing which DesalCo is obliged to do under the terms of this Charge or which
such attorney considers necessary in order to enable the Secured Party or such
attorney to exercise the rights conferred on it by this Charge or by law.

11.2     RATIFICATION

DesalCo hereby ratify and confirm and agree to ratify and confirm whatever any
attorney appointed under this Charge shall do in its capacity as such.

12.      RELEASE OF THE SECURITY

After the end of the Security Period, the Secured Party shall, at the request
and cost of the DesalCo, execute all such documents and do all such other things
as may be required to release the Security, in each case without recourse to or
any representation or warranty by or from the Secured Party.

13.      COSTS AND EXPENSES

13.1     TRANSACTION COSTS

DesalCo agrees with the Secured Party that they shall on demand of the Secured
Party reimburse the Secured Party on a full indemnity basis all costs and
expenses (including legal fees), incurred by, or any remuneration payable to the
Secured Party in connection with the preparation, negotiation, execution and
perfection of this Charge and the implementation of the arrangements
contemplated herein.

13.2     STAMP TAX

DesalCo shall pay any and all stamp, registration and other taxes to which this
Charge or any judgment given in connection herewith is or at any time may be
subject and shall on demand

                                      -13-

<PAGE>

indemnify the Secured Party against any liabilities, costs, claims and expenses
(including legal fees) resulting from any failure to pay or delay in paying any
such tax.

13.3     INDEMNITY

DesalCo shall indemnify and hold harmless the Secured Party from and against any
and all costs, claims losses, expenses (including legal fees) and liabilities,
which the Secured Party may incur as a result of the occurrence of any Event of
Default, the enforcement of the Security or the exercise or enforcement by the
Secured Party of any of the rights conferred on it by this Charge or by law
unless incurred by the Secured Party as a result of its own fraud, wilful
misconduct or gross negligence or the fraud, gross negligence or wilful
misconduct of its delegates and sub-delegates.

14.      NO WAIVER; REMEDIES CUMULATIVE

No failure or delay on the part of the Secured Party in exercising any right,
power or privilege hereunder or under any other Financing Document and no course
of dealing between DesalCo and the Secured Party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on DesalCo in any case shall
entitle DesalCo to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Secured Party to take
any other or further action in any circumstances without notice or demand. All
remedies, either under this Agreement or any other Financing Document or
pursuant to any applicable law or otherwise afforded to the Secured Party shall
be cumulative and not alternative.

15.      ADDITIONAL PROVISIONS

15.1     SEVERABILITY

Any provision hereof which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of any provision in any other
jurisdiction.

15.2     CURRENCY CONVERSION

In order to apply any sum held or received by the Secured Party in or towards
payment of the Secured Obligations, the Secured Party may purchase an amount in
another currency and the rate of exchange to be used shall be that at which, at
such time as it considers appropriate, the Secured Party is able to effect such
purchase.

15.3     JUDGMENT CURRENCY

This is an international transaction in which the specification of Dollars and
payment in the Cayman Islands is of the essence, and the obligations of DesalCo
under this Charge and under the other Financing Documents to make payment to (or
for the account of) the Secured Party in

                                      -14-

<PAGE>

Dollars shall not be discharged or satisfied by any tender or recovery pursuant
to any judgment expressed in or converted into any other currency or in another
place except to the extent that such tender or recovery results in the effective
receipt by the Secured Party in Cayman of the full amount of Dollars payable to
the Secured Party under this Charge.

(a)      If any sum due from DesalCo under this Charge (a "SUM"), or any order,
         judgment or award given or made in relation to a Sum, has to be
         converted from the currency (the "FIRST CURRENCY") in which that Sum
         is payable into another currency (the "SECOND CURRENCY") for the
         purpose of:

         (i)      making or filing a claim or proof against the Company or
                  DesalCo;

         (ii)     obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

         DesalCo shall as an independent obligation, within three (3) Business
         Days of demand, indemnify the Secured Party against any cost, loss or
         liability arising out of or as a result of the conversion including any
         discrepancy between (A) the rate of exchange used to convert that Sum
         from the First Currency into the Second Currency and (B) the rate or
         rates of exchange available to the Secured Party at the time of its
         receipt of that Sum.

(b)      DesalCo waives any right each may have in any jurisdiction to pay any
         amount under this Charge in a currency or currency unit other than that
         in which it is expressed to be payable.

15.4     RIGHTS CUMULATIVE

The rights and remedies provided by this Charge are cumulative and not exclusive
of any rights or remedies provided by law.

15.5     MORTGAGEE IN POSSESSION

Neither the Secured Party nor any Receiver shall by reason of its taking any
action permitted by this Charge or its taking possession of the Secured Property
or any part of it be liable to account as mortgagee in possession or be liable
for any loss on realisation or for any default or omission for which a mortgagee
in possession might be liable other than for its own fraud, gross negligence and
wilful misconduct, or the fraud, gross negligence or wilful misconduct of its
delegates.

16.      ASSIGNMENT

16.1     DESLACO'S RIGHTS

The rights of DesalCo under this Charge are not assignable or transferable and
DesalCo agrees that it will not purport to assign all or any such rights.

                                      -15-

<PAGE>

16.2     THE SECURED PARTY'S RIGHTS

The rights of the Secured Party under this Charge are assignable in whole or in
part and the Secured Party may assign all or any such rights without the consent
of DesalCo. The Secured Party shall provide written notice to DesalCo of any
such assignment.

17.      NOTICES

(a)      All notices, requests, approvals, consents and other communications
         provided for hereunder shall be in writing (including, unless the
         context expressly otherwise provides, by facsimile transmission,
         provided that any matter transmitted by DesalCo by facsimile (i) shall
         be promptly confirmed by a telephone call to the recipient at the
         number specified on the applicable signature page hereof, and (ii)
         shall be followed promptly by a hard copy original thereof by express
         courier) and faxed or delivered, to the address or facsimile number
         specified for notices on the applicable signature page hereof or to
         such other address as shall be designated by such party in a written
         notice to the other parties hereto.

(b)      All such notices, requests, approvals, consents and communications (i)
         sent by express courier will be effective upon delivery to or refusal
         to accept delivery by the addressee, and (ii) transmitted by facsimile
         will be effective when sent and facsimile confirmation received; except
         that all notices and other communications to any Agent shall not be
         effective until actually received.

(c)      DesalCo acknowledge and agree that any agreement of the Secured Party
         to receive certain notices by telephone and facsimile is solely for the
         convenience and at the request of DesalCo. The Secured Party shall be
         entitled to rely on the authority of any Person purporting to be a
         Person authorized by DesalCo to give such notice and the Secured Party
         shall not have any liability to the DesalCo or other Person on account
         of any action taken or not taken by the Secured Party in reliance upon
         such telephonic or facsimile notice.

(d)      All notices, requests and other communications hereunder and under the
         other Financing Documents shall be in the English language unless
         otherwise agreed by the parties hereto.

18.      GOVERNING LAW AND JURISDICTION

THIS CHARGE IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
BARBADOS.

19.      SUBMISSION

(a)      For the exclusive benefit of the Secured Party and DesalCo irrevocably
         agree that the courts of Barbados are to have jurisdiction to settle
         any claims or disputes arising under, out of or in connection with this
         Charge (including without limitation any claim or dispute relating to
         the validity, interpretation, performance, termination or enforcement
         of this Charge) and that accordingly any suit, action or proceedings in
         that respect (together in Clauses 19 and 20 referred to as
         "PROCEEDINGS") may be brought in such courts.

                                      -16-

<PAGE>

(b)      DesalCo irrevocably waive and agree not to raise any objection which
         each of them may have now or hereafter to the laying of the venue of
         any Proceedings in the courts of Barbados and any claim that any such
         Proceedings have been brought in an inconvenient or inappropriate
         forum.

(c)      DesalCo irrevocably agree not to take Proceedings in any court of
         competent jurisdiction other than the courts of Barbados, save with
         respect to any counterclaim asserted by DesalCo in the course of
         proceedings previously commenced by the Secured Party. Nothing
         contained in this Clause 19 shall limit the right of the Secured Party
         to take Proceedings against DesalCo in any other court of competent
         jurisdiction, nor shall the taking of Proceedings in one or more
         jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

20.      JUDGMENTS AND IMMUNITY

(a)      DesalCo recognizes and acknowledges that this Charge constitutes a
         commercial transaction and accordingly it acknowledges and agrees that
         it is not entitled to plead, and pursuant to this Clause 20 hereby
         waives to the fullest extent permitted by law any right to claim,
         sovereign immunity for any purpose whatsoever, including, but not
         limited to, any right to plead sovereign immunity in respect of any
         Proceedings pursuant to this Charge.

(b)      DesalCo consents generally, in respect of any Proceedings pursuant to
         this Charge for the purpose of enforcing any order, judgment or award,
         to the giving of any relief or the issuing of any process in connection
         with such order, judgment or award including, without limitation, the
         making, enforcement or execution against any property of any order,
         judgment or award and to the extent that DesalCo may be entitled in any
         jurisdiction to claim for itself or its property immunity in respect of
         its obligations under this Charge from any suit, execution, attachment
         (whether in aid of execution, before judgment or otherwise) or legal
         process or to the extent that in any jurisdiction there may be
         attributed to itself or its property such immunity, DesalCo agrees not
         to claim and hereby irrevocably waive such immunity to the fullest
         extent permitted by the laws of such jurisdiction.

(c)      DesalCo unconditionally and irrevocably agrees, with respect to any
         final order, judgment or award in any Proceedings made pursuant to this
         Charge and not subject to appeal (a "JUDGMENT" ), that:

         (i)      the Judgment shall be conclusive and binding upon it;

         (ii)     it shall be bound by and recognize the Judgment in any
                  jurisdiction;

         (iii)    to the extent permitted by law, it shall not claim, invoke on
                  its behalf or for its benefit any right it may have under the
                  laws of Barbados, or any other state or jurisdiction, to
                  prevent, delay, hinder, nullify or in any other way obstruct
                  the enforcement or execution of the Judgment; and

                                      -17-

<PAGE>

         (iv)     to the extent permitted by law, it shall not, and shall
                  irrevocably waive any right to, challenge the Judgment on any
                  ground or the enforcement or execution of the Judgment in any
                  jurisdiction (other than by way of appeal in the original
                  jurisdiction).

21.      COUNTERPARTS AND EFFECTIVENESS

21.1     COUNTERPARTS

This Charge may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

21.2     EFFECTIVENESS

This Charge shall take effect and be delivered as a deed on the date on which it
is stated to be made.

22.      AMENDMENT OR WAIVER

No provision of this Agreement may be amended, supplemented, modified or waived,
except by written instrument signed by each of the parties hereto.

                                     * * *

                                      -18-

<PAGE>

IN WITNESS WHEREOF this Charge has been executed as a deed by the parties hereto
      and has been delivered on date stated at the beginning of this Deed.

DESALCO                                    )
Executed on behalf of                      )
DESALCO LIMITED                            ) /s/ Jeffrey M. Parker
as a deed by:                              )
         Name: Mr. Jeffrey Parker
         Title: Chief Executive Officer

Notice Address:
Address:
P.O.Box 1114 GT
Trafalgar House
Grand Cayman, Cayman Islands.
Attention: Mr. Jeffrey Parker

Telephone No.: 345 945-4277
Telecopier No. 345 949-2957

SECURED PARTY                              )
EXECUTED ON BEHALF OF                      ) /s/ Bruce John
SCOTIABANK (CAYMAN ISLANDS) LTD.           )
as a deed by:
         Name: Mr. Bruce John
         Title: Commercial Banking Manager

Notice Address:
Address:
Scotiabank (Cayman Islands) Ltd.
Scotia Centre
Cardinal Avenue
P.O. Box 689
Grand Cayman

Attention: Commercial Banking Manager

Telephone No.: 345 949-7666
Telecopier No. 345 949-5130

         By its execution of this Equitable Charge of Shares, DESALCO (BARBADOS)
LTD. hereby acknowledges the terms and conditions hereof, and irrevocably
undertakes that should the Secured Party exercise its rights under this
Equitable Charge of Shares, DesalCo (Barbados) Ltd. shall make all reasonable
efforts to ensure that no action, or failure to take any required action,

                                      -19-

<PAGE>

which would have the effect of frustrating the Secured Party's ability to be
recorded in the Register of Members as the registered legal and beneficial owner
of the Shares shall be.

DESALCO (BARBADOS) LTD.

/s/ Jeffery Parker

Name: Mr. Jeffrey Parker

Title: Chief Executive Officer

                                      -20-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>25
<FILENAME>g80228exv10w45.txt
<DESCRIPTION>EQUITABLE CHARGE OF SHARES
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.45

                          THE 7TH DAY OF FEBRUARY, 2003

                           EQUITABLE CHARGE OF SHARES
  (Collateral to a Substituted Debenture bearing even date herewith and entered
                into between the Borrower and the Secured Party)

                                     BETWEEN

                           CONSOLIDATED WATER CO.LTD.
                                   as Borrower

                                       AND

                        SCOTIABANK (CAYMAN ISLANDS) LTD.
                                as Secured Party

                          with respect to the shares in

                                 DESALCO LIMITED

<PAGE>

THIS COLLATERAL CHARGE ("CHARGE") is made on the 7th day of February, 2003
between the following parties:

(1)      CONSOLIDATED WATER CO. LTD., a company incorporated in the Cayman
         Islands, with its registered office located at P.O. Box 1114 GT,
         Trafalgar Place, George Town, Grand Cayman, Cayman Islands, (the
         "BORROWER"); and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD.a banking institution organised and
         existing under the laws of the Cayman Islands, with its principal place
         of business located at Scotiabank Centre, Cardinal Avenue, Georgetown,
         Grand Cayman (the "SECURED PARTY" ).

RECITALS

A.       The Borrower currently holds one hundred percent (100%) of the shares
         of DesalCo Limited (the "COMPANY" ).

B.       The Secured Party has agreed to provide certain loans to the Borrower.

C.       Such loans will be made subject to the terms and conditions of a Loan
         Agreement, dated the date hereof, among the Borrower and the Secured
         Party (the "LOAN AGREEMENT" ).

D.       It is a condition to the first disbursement under the Loan Agreement
         that the Borrower shall have entered into the Charge.

E.       The Board of Directors of the Borrower is satisfied that the Borrower
         is entering into this Charge for the purposes of its business and that
         its doing so benefits the Borrower.

F.       The Borrower and the Secured Party intend this Charge to take effect as
         a deed.

G.       This Collateral Charge is intended to be collateral to a Substituted
         Debenture bearing even date herewith entered into between the Borrower
         and the Secured Party and shall be stamped as such.

1.       INTERPRETATION

1.1      DEFINITIONS

(a)      Capitalized terms used in this Charge without definition have the
         meanings specified in Annex A to the Loan Agreement.

(b)      In addition the following terms in this Charge have the meanings given
         to them in this Clause.

"CHARGED SHARES" means any shares from time to time forming part of the Secured
Property.

"FINANCING DOCUMENTS" means collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

<PAGE>

"INITIALLY CHARGED SHARES" means all the shares in the Company specified in
recital "A" to this Charge of which the Company is the beneficial or registered
owner on the date of this Charge.

"OBLIGATIONS" shall mean, collectively, all loans, advances, debts, liabilities,
and obligations, howsoever arising, owed by the Borrower under a Financing
Document or otherwise to the Secured Party.

"RECEIVER" means an administrative receiver, a receiver and manager or any other
receiver (whether appointed pursuant to this Charge, pursuant to any statute, by
a court or otherwise) of the Secured Property or any part of it.

"SECURED OBLIGATIONS" means all present and future Obligations.

"SECURED PROPERTY" means the Initially Charged Shares and any other shares in
the Company of which the Borrower is or becomes the beneficial or registered
owner together with all dividends, stocks, shares, warrants, securities, rights,
monies or other property accruing on or derived from such shares.

"SECURITY" means the security created by this Charge.

"SECURITY PERIOD" means the period beginning on the date of this Charge and
ending on the date upon which:

(a)      the Secured Party is under no obligation (whether actual or contingent)
         to make advances or provide other financial accommodation to the
         Borrower under any of the Financing Documents; and

(b)      all Secured Obligations have been unconditionally and irrevocably paid
         and discharged in full.

1.2      INTERPRETATION

The principles of interpretation set forth in Section 18.13 to the Loan
Agreement shall apply to this Charge.

1.3      CONTINUING EVENTS OF DEFAULT

An event which constitutes an Event of Default shall be regarded as continuing
if (a) the circumstances constituting such event continue and (b) the Secured
Party has not waived such of its rights under the Financing Documents as arise
as a result of the occurrence of that event.

1.4      CERTIFICATES

A certificate of the Secured Party as to the amount of any Secured Obligation
owed to it shall be prima facie evidence of the existence and amount of such
Secured Obligation.

                                      -2-

<PAGE>

1.5      STATUTES

Any reference in this Charge to a statute or statutory provision shall, unless
the contrary is indicated, be construed as a reference to such statute or
statutory provision as the same shall have been or may be amended or re-enacted.

1.6      NOMINEES

If the Secured Party causes or requires the Charged Shares to be registered in
the name of a nominee for the Secured Party, any reference in this Charge to the
Secured Party shall, if the context so permits or requires, be construed as a
reference to the Secured Party and such nominee.

1.7      CLAUSE AND SCHEDULE HEADINGS

Clause and Schedule headings are for ease of reference only and shall not affect
the construction of this Charge.

2.       EQUITABLE CHARGE

2.1      CHARGE

The Borrower hereby charges with full title guarantee the Secured Property to
the Secured Party to hold the same on trust as security for the payment and
discharge of the Secured Obligations.

2.2      DEPOSIT OF SHARE CERTIFICATES

Immediately upon execution of this Charge and as a condition to the initial
disbursement under the Loan Agreement, the Borrower shall deposit with the
Secured Party all share certificates and other documents of title relating to
the Initially Charged Shares together with stock transfer forms in respect of
the Initially Charged Shares duly executed in blank by or on behalf of the
Borrower.

2.3      FURTHER SHARES

Upon its becoming the beneficial or registered owner of any Charged Shares
(other than the Initially Charged Shares) the Borrower shall ensure that such
Charged Shares (unless already so registered) are registered in the name of the
Borrower and shall promptly notify the Secured Party of such circumstances and
deposit with the Secured Party any share certificates and other documents of
title representing such Charged Shares together with blank stock transfer forms
in respect of such Charged Shares duly executed by or on behalf of the Borrower.

The Borrower shall pay when due all calls or other requests for payments due in
respect of any of the Secured Property, but if the Borrower fails to make any
such payment the Secured Party may (but shall not be obliged to) make such
payment on behalf of the Borrower and if the Secured Party does so the Borrower
shall promptly on demand of the Secured Party pay to the Secured Party an amount
equal to such payment.

                                      -3-

<PAGE>

3.       DIVIDENDS, VOTING AND INFORMATION

3.1      SECURITY NOT ENFORCEABLE

Unless and until the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Borrower shall continue to be entitled to:

(a)      receive and retain all dividends, interest and other monies arising
         from the Secured Property; and

(b)      exercise all voting rights in relation to the Charged Shares;

provided that the Borrower shall not exercise such voting rights, or otherwise
permit or agree to (i) any variation of the rights attaching to or conferred by
the Secured Property or any part of it, (ii) any increase in the issued share
capital of the Company in any manner which, in the opinion of the Secured Party,
would, or would be reasonably likely to, impair the value of, or prejudice the
ability of the Secured Party to realise, the Security or (iii) in violation of
any provision of the Financing Documents.

3.2      SECURITY ENFORCEABLE

At any time after the Security has become enforceable pursuant to Clause 8.1,
the Secured Party shall be entitled to cause the Charged Shares to be registered
in its name and may at its discretion (in the name of the Borrower or otherwise
and without any further consent or authority from the Borrower):

(a)      exercise or refrain from exercising any voting rights in respect of the
         Charged Shares and revoke, or cause to be revoked, any proxies given
         pursuant to Clause 3.1 (Security not Enforceable);

(b)      apply all dividends, interest and other monies arising from the Secured
         Property as if they were proceeds of sale under this Charge;

(c)      exercise or refrain from exercising the rights of a legal owner of the
         Secured Property, including the right, in relation to any company whose
         shares or other securities are included in the Secured Property, to
         concur or participate in:

         (i)      the reconstruction, amalgamation, sale or other disposal of
                  such company or any of its assets or undertaking (including
                  the exchange, conversion or reissue of any shares or
                  securities as a consequence thereof),

         (ii)     the realisation, modification or variation of any rights or
                  liabilities attaching to any such shares or securities, and

         (iii)    the exercise, renunciation or assignment of any right to
                  subscribe for any such shares or securities,

                                       -4-

<PAGE>

                  in each case in such manner and on such terms as the Secured
                  Party may think fit, and all rights resulting from any such
                  action shall form part of the Secured Property.

3.3      INFORMATION

If the Borrower receives a balance sheet, profit and loss account or any notice,
report, statement or circular sent or delivered by the issuer of any Charged
Share to its members, it shall promptly deliver a copy to the Secured Party.

4.       CONTINUING SECURITY

4.1      CONTINUING AND INDEPENDENT SECURITY

This Charge shall constitute and be continuing security which shall not be
released or discharged by any intermediate payment or settlement of all or any
of the Secured Obligations, shall continue in full force and effect until the
end of the Security Period and is in addition to and independent of, and shall
not prejudice or merge with, any other security (or any right of set-off) which
the Secured Party may hold at any time for the Secured Obligations or any of
them.

4.2      AVOIDANCE OF PAYMENTS

Where any release, discharge or other arrangement in respect of any Secured
Obligation or any security any Secured Party may hold for such Secured
Obligation is given or made in reliance on any payment or other disposition
which is avoided or must be repaid in an insolvency, liquidation or otherwise,
and whether or not such Secured Party has conceded or compromised any claim that
any such payment or other disposition will or should be avoided or repaid, this
Charge and the Security shall continue as if such release, discharge or other
arrangement had not been given or made.

4.3      IMMEDIATE RECOURSE

The Secured Party shall not be obliged before exercising any of the rights
conferred on it by this Charge or by law to seek to recover amounts due from the
Borrower or to exercise or enforce any other rights or security it may have or
hold in respect of the Secured Obligations.

4.4      WAIVER OF DEFENCES

Neither the obligations of the Borrower under this Charge nor the Security
Documents and the rights, powers and remedies conferred on the Secured Party by
this Charge or by law shall be discharged, impaired or otherwise affected by:

(a)      the winding-up, dissolution, administration or re-organisation of the
         Borrower or any other person or any change in the status, function,
         control or ownership of the Borrower or any such person;

(b)      any of the Secured Obligations or any other security held by the
         Secured Party in respect thereof being or becoming illegal, invalid,
         unenforceable or ineffective in any respect;

                                      -5-

<PAGE>

(c)      any time or other indulgence being granted or agreed to with the
         Borrower or any other person in respect of the Secured Obligations or
         any of them or in respect of any other security held by the Secured
         Party in respect thereof;

(d)      any amendment to, or any variation, waiver or release of, the Secured
         Obligations or any of them or any other security held by the Secured
         Party in respect thereof;

(e)      any total or partial failure to take or perfect any security proposed
         to be taken in respect of the Secured Obligations or any of them;

(f)      any total or partial failure to realise the value of, or any release,
         discharge, exchange or substitution of, any other security held by the
         Secured Party in respect of the Secured Obligations or any of them; or

(g)      any other act, event or omission which might operate to discharge,
         impair or otherwise affect the obligations of the Borrower hereunder,
         the Security or any of the rights, powers and remedies conferred on the
         Secured Party by this Charge or by law.

4.5      NO COMPETITION

Any right which the Borrower may have (a) by way of contribution or indemnity in
relation to the Secured Obligations or (b) otherwise to claim or prove as a
creditor of the Company or any other person or its estate in competition whether
a right of subrogation or otherwise with the Secured Party, shall be exercised
by the Borrower only if and to the extent that the Secured Party so requires and
in such manner and upon such terms as the Secured Party may specify and the
Borrower shall hold any moneys, rights or security held or received by it as a
result of the exercise of any such rights on trust for the Secured Party for
application in accordance with the terms of this Charge as if such moneys,
rights or security were held or received by the Secured Party under this Charge.

4.6      APPROPRIATION

The Secured Party shall not be obliged to apply any sums held or received by it
in respect of the Secured Obligations in or towards payment of the Secured
Obligations and any such sum shall be held by or paid to the Secured Party for
application pursuant to the terms of this Charge.

4.7      SUBROGATION

The Borrower shall have no right of subrogation in respect of the performance of
any of its obligations under this Agreement and the Charge until all of the
Secured Obligations have been paid in full.

5.       REPRESENTATIONS AND WARRANTIES

The Borrower makes the representations and warranties set out in Clauses 5.1
(Status and Due Authorisation) to 5.12 (No Security from the Company) and
acknowledges that the Secured Party has entered into this Charge in reliance on
those representations and warranties.

                                      -6-

<PAGE>

5.1      STATUS AND DUE AUTHORISATION

It is a company duly incorporated with limited liability under the laws of the
Cayman Islands with power to enter into this Charge and to exercise its rights
and perform its obligations under this Charge and all corporate and other action
required to authorise its execution of this Charge and its performance of its
obligations hereunder has been duly taken.

5.2      BINDING OBLIGATIONS

The obligations expressed to be assumed by it in this Charge are legal and valid
obligations binding on it in accordance with the terms of this Charge which
constitutes a first priority fixed charge over the Charged Shares subject to any
general principles of law limiting its obligations which are referred to in any
legal opinion delivered pursuant to the Loan Agreement.

5.3      ALL ACTIONS TAKEN

All acts, conditions and things required to be done, fulfilled and performed in
order (a) to enable it lawfully to enter into, exercise its rights under and
perform and comply with the obligations expressed to be assumed by it in this
Charge, (b) to ensure that the obligations expressed to be assumed by it in this
Charge are legal, valid and binding and (c) to make this Charge admissible in
evidence in its jurisdiction of incorporation have been done, fulfilled and
performed.

5.4      NO DEDUCTIONS OR WITHHOLDINGS

It will not be required to make any deduction or withholding from any payment it
may make under this Charge.

5.5      NO FILING OR STAMP TAXES

Under the laws of its jurisdiction of incorporation, it is not necessary that
this Charge be filed, recorded or enrolled with any court or other authority in
the Cayman Islands or that any ad valorem stamp, registration or similar tax be
paid on or in relation to this Charge.

5.6      NO WINDING-UP

It has not taken any corporate action nor have any other steps been taken or
legal proceedings been started or (to the best of its knowledge and belief)
threatened against it for its winding-up, dissolution, administration or
re-organisation or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of any or all of
its assets or revenues.

5.7      NO ADVERSE INTERESTS

Subject only to the Security, no person other than the Borrower has any legal or
beneficial interest (or any right to claim any such interest) in the Secured
Property and the Borrower has not received notice of any such claim.

                                      -7-

<PAGE>

5.8      NO DISPOSALS

Save as contemplated in this Charge, it has not transferred, mortgaged, charged
or otherwise disposed of (or agreed to transfer, mortgage, charge or otherwise
dispose of), whether by way of security or otherwise, the benefit of all or any
of its right, title and interest in and to the Secured Property or any part of
it.

5.9      NO CONFLICTS

Its execution of this Charge and its exercise of its rights and performance of
its obligations hereunder do not and will not (a) conflict with the provisions
of (i) any agreement, mortgage, bond or other instrument or treaty to which it
is a party or which is binding upon it or any of its assets, (ii) its
constitutive documents or any rules and regulations made thereunder or (iii) any
applicable law, regulation or official or judicial order or (b) cause any of the
foregoing representations to be untrue.

5.10     THE CHARGED SHARES

Each Charged Share is fully paid or credited as fully paid, no calls have been
made in respect thereof and remain unpaid and no calls can be made in respect of
such Charged Share in the future and the terms of each Charged Share and of the
Memorandum and Articles of Association of the issuer of such Charged Share do
not restrict or otherwise limit the Borrower's right to transfer or charge such
Charged Share.

5.11     CHOICE OF LAW

In any proceedings taken in its jurisdiction of incorporation in relation to
this Charge, the choice of Cayman law as the governing law of this Charge and
any judgment obtained in the Cayman Islands will be recognised and enforced.

5.12     NO SECURITY FROM THE COMPANY

It has not requested or taken any security from the Company for any obligations
or liabilities of the Company to it.

5.13     REPETITION

The representations and warranties set out in Clauses 5.1 (Status and Due
Authorisation) to 5.12 (No Security from the Company):

(a)      shall survive the execution of each Financing Document and each
         drawdown under the Loan Agreement; and

(b)      are made on the date hereof and are deemed to be repeated on each Draw
         down Date during the Security Period with reference to the facts and
         circumstances then existing.

                                      -8-

<PAGE>

6.       UNDERTAKINGS

6.1      AUTHORISATIONS

The Borrower shall obtain, comply with the terms of and do all that is necessary
to maintain in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of its jurisdiction of
incorporation to enable it lawfully to enter into and perform its obligations
under this Charge and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of this Charge.

6.2      NO ACTION

The Borrower shall not take any action which would cause any of the
representations made in Clause 5 (Representations and Warranties) to be untrue
at any time during the Security Period.

6.3      NOTIFICATION OF MISREPRESENTATION

The Borrower shall notify the Secured Party of the occurrence of any event which
results in or may reasonably be expected to result in any of the representations
made in Clause 5 (Representations and Warranties) being untrue when made or when
deemed to be repeated.

6.4      NO VARIATION OR RELEASE

The Borrower shall not, without the prior written consent of the Secured Party,
purport to vary or revoke any notice or instruction relating to this Charge
which it has given or may later give to any person.

6.5      NO ACTION TO JEOPARDISE SECURITY CONSTITUTED HEREBY

The Borrower shall not do or fail to do or cause or permit another person to do
or omit to do anything which is liable to jeopardise the effectiveness or
priority, in relation to the Security.

6.6      PAYMENT OF TAXES

In the event that the Secured Party exercises its rights under Clause 8.1 and
8.6 in order to effect the transfer and registration of the Charged Shares in
the name of the Secured Party and such actions lead to the imposition of any
Tax, be it pursuant to the Land Holding Companies Share Transfer Tax Law of the
Cayman Islands or otherwise, the Borrower shall be liable for the payment of
such Tax and should the Borrower fail to pay such Taxes the Secured Party shall
have the option, but not the obligation, to pay such Taxes and add whatever
amount is paid by the Secured Party in reduction of such Taxes to the total
amount outstanding under the Loan Agreement.

7.       FURTHER ASSURANCE

The Borrower shall from time to time and at its own expense give all such
assurances and do all such things as the Secured Party may require in order to
enable the Secured Party to perfect or protect the security created or intended
to be created by this Charge or to exercise any of the

                                      -9-

<PAGE>

rights conferred on it by this Charge or by law and to that intent the Borrower
shall execute all such instruments, deeds and agreements and give all such
notices and directions as the Secured Party may require.

8.       ENFORCEMENT OF SECURITY

8.1      SECURITY ENFORCEABLE

The Security shall become immediately enforceable if an Event of Default has
occurred and is continuing as defined above in Clause 1.3.

8.2      ENFORCEMENT

At any time after the Security has become enforceable, the Secured Party may in
its absolute discretion enforce all or any part of the Security and exercise any
of the rights conferred on it by this Charge or by law at such times and in such
manner as it thinks fit.

8.3      POWER OF SALE

At any time after the Security has become enforceable pursuant to Clause 8.1
(Security Enforceable), the Secured Party may (without notice to the Borrower)
sell or otherwise dispose of the Secured Property or any part of it and shall be
entitled to apply the proceeds of such sale or other disposal in paying the
costs of such sale or disposal and thereafter in or towards the discharge of the
Secured Obligations or otherwise as provided for in this Charge.

8.4      STATUTORY POWERS

For the purposes of all powers implied by statute the Secured Obligations shall
be deemed to have become due and payable on the date of this Charge.

8.5      REGISTRATION OF SHARES

The Secured Party shall be entitled at any time after the Security has become
enforceable pursuant to Clause 8.1 (Security Enforceable) to complete any stock
transfer forms then held by the Secured Party pursuant to this Charge in the
name of the Secured Party and thereupon the Borrower shall do whatever the
Secured Party requires in order to procure:

(a)      The prompt registration of such transfer or transfers and the prompt
         issue of a new certificate or certificates for the relevant Charged
         Shares in the name of the Secured Party who shall hold such Charged
         Shares as Security for the Obligations in furtherance of the power of
         sale provided for in Clause 8.3 above; and

(b)      Compliance by the Company with all requirements of the Land Holding
         Companies Share Transfer Tax Law (2002 Revision), as the same may be
         amended from time to time, or any legislation in substitution or in
         addition thereto and the Borrower shall provide all assistance as may
         be needed or required by the Company to enable it to meet such
         compliance whether financial or otherwise.

                                      -10-

<PAGE>

9.       RECEIVERS

9.1      APPOINTMENT

At any time after the Security has become enforceable (whether or not the
Secured Party shall have taken possession of the Secured Property), or following
the dissolution of the Borrower, and without any or further notice, the Secured
Party may, by Deed or writing signed by any officer or manager of the Secured
Party or any person authorised for this purpose by the Secured Party, appoint
any person to be Receiver, and may similarly remove any Receiver whether or not
it appoints any person in his place. If the Secured Party appoints more than one
person as Receiver, the Secured Party may give the relevant persons power to act
either jointly or severally.

9.2      SCOPE OF APPOINTMENT

Any Receiver may be appointed either Receiver of all the Secured Property or
Receiver of such part of the Secured Property as may be specified in the
appointment. In the latter case, the rights conferred on a Receiver by Clause 9
(Receivers) shall have effect as though every reference in that Clause to the
"SECURED PROPERTY" were a reference to the part of the Secured Property so
specified or any part thereof.

9.3      POWERS OF A RECEIVER

Any Receiver appointed under this Charge shall have all the powers granted to a
receiver under the applicable law and, in addition shall have the right, either
in his own name or in the name of the Borrower or otherwise and in such manner
and upon such terms and conditions as the Receiver thinks fit:

(a)      in connection with any sale or disposition of the Secured Property, to
         receive the consideration therefor in a lump sum or in instalments and
         to receive shares by way of consideration;

(b)      to grant options, licences or any other interest whatsoever in relation
         to the Secured Property;

(c)      to do all other acts and things which he may consider desirable or
         necessary for realising the Secured Property or incidental or conducive
         to any of the rights, powers or discretions conferred on a Receiver
         under, or by virtue of, this Charge; and

(d)      to exercise in relation to the Secured Property all the powers,
         authorities and things which he would be capable of exercising if he
         were the absolute beneficial owner of the same.

9.4      CONFLICT

If there is any ambiguity or conflict between the powers conferred on the
Receiver by the applicable law and the powers conferred by Clause 9.3 (Powers of
a Receiver), the powers conferred by Clause 9.3 (Powers) shall prevail.

                                      -11-

<PAGE>

9.5      SECURITY TRUSTEE OF BORROWER

Any Receiver shall be the agent of the Borrower for all purposes and the
Borrower shall be solely responsible for the contracts, engagements, acts,
omissions, defaults and losses of the Receiver and for all liabilities incurred
by the Receiver.

9.6      REMUNERATION

The Secured Party may, from time to time, determine the remuneration of any
Receiver and may direct payment of such remuneration out of moneys accruing to
the Receiver as Receiver but the Borrower alone shall be liable for the payment
of such remuneration and for all other costs, charges and expenses of the
Receiver, unless incurred as the result of the fraud, gross negligence or wilful
misconduct of the Receiver.

10.      APPLICATION OF PROCEEDS

Any moneys held or received by the Secured Party under or pursuant to this
Charge shall be applied by the Secured Party in reduction of the amounts due to
the Secured Party under the terms of the Loan Agreement.

11.      POWER OF ATTORNEY

11.1     APPOINTMENT

By way of security for the performance of its obligations hereunder, the
Borrower hereby irrevocably appoints the Secured Party, any Receiver of the
Secured Property or any part of it and its delegates and sub-delegates to be its
attorney acting severally (or jointly with any other such attorney or attorneys)
and on its behalf and in its name or otherwise to do any and every thing which
the Borrower is obliged to do under the terms of this Charge or which such
attorney considers necessary in order to enable the Secured Party or such
attorney to exercise the rights conferred on it by this Charge or by law.

11.2     RATIFICATION

The Borrower hereby ratifies and confirms and agrees to ratify and confirm
whatever any attorney appointed under this Charge shall do in its capacity as
such.

12.      RELEASE OF THE SECURITY

After the end of the Security Period, the Secured Party shall, at the request
and cost of the Borrower, execute all such documents and do all such other
things as may be required to release the Security, in each case without recourse
to or any representation or warranty by or from the Secured Party.

13.      COSTS AND EXPENSES

                                      -12-

<PAGE>

13.1     TRANSACTION COSTS

The Borrower agrees with the Secured Party that it shall on demand of the
Secured Party reimburse the Secured Party on a full indemnity basis all costs
and expenses (including legal fees), incurred by, or any remuneration payable to
the Secured Party in connection with the preparation, negotiation, execution and
perfection of this Charge and the implementation of the arrangements
contemplated herein.

13.2     STAMP TAX

The Borrower shall pay any and all stamp, registration and other taxes to which
this Charge or any judgment given in connection herewith is or at any time may
be subject and shall on demand indemnify the Secured Party against any
liabilities, costs, claims and expenses (including legal fees) resulting from
any failure to pay or delay in paying any such tax.

13.3     INDEMNITY

The Borrower shall indemnify and hold harmless the Secured Party from and
against any and all costs, claims losses, expenses (including legal fees) and
liabilities, which the Secured Party may incur as a result of the occurrence of
any Event of Default, the enforcement of the Security or the exercise or
enforcement by the Secured Party of any of the rights conferred on it by this
Charge or by law unless incurred by the Secured Party as a result of its own
fraud, wilful misconduct or gross negligence or the fraud, gross negligence or
wilful misconduct of its delegates and subdelegates.

14.      NO WAIVER; REMEDIES CUMULATIVE

No failure or delay on the part of the Secured Party in exercising any right,
power or privilege hereunder or under any other Financing Document and no course
of dealing between the Borrower and the Secured Party shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Secured Party
to take any other or further action in any circumstances without notice or
demand. All remedies, either under this Agreement or any other Financing
Document or pursuant to any applicable law or otherwise afforded to the Secured
Party shall be cumulative and not alternative.

15.      ADDITIONAL PROVISIONS

15.1     SEVERABILITY

Any provision hereof which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of any provision in any other
jurisdiction.

                                      -13-

<PAGE>

15.2     CURRENCY CONVERSION

In order to apply any sum held or received by the Secured Party in or towards
payment of the Secured Obligations, the Secured Party may purchase an amount in
another currency and the rate of exchange to be used shall be that at which, at
such time as it considers appropriate, the Secured Party is able to effect such
purchase.

15.3     JUDGMENT CURRENCY

This is an international transaction in which the specification of Dollars and
payment in the Cayman Islands is of the essence, and the obligations of the
Borrower under this Charge and under the other Financing Documents to make
payment to (or for the account of) the Secured Party in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any other currency or in another place except to
the extent that such tender or recovery results in the effective receipt by the
Secured Party in Cayman of the full amount of Dollars payable to the Secured
Party under this Charge.

(a)      If any sum due from the Borrower under this Charge (a "SUM"), or any
         order, judgment or award given or made in relation to a Sum, has to be
         converted from the currency (the "FIRST CURRENCY") in which that Sum is
         payable into another currency (the "SECOND CURRENCY") for the purpose
         of:

         (i)      making or filing a claim or proof against the Company or the
                  Borrower;

         (ii)     obtaining or enforcing an order, judgment or award in relation
                  to any litigation or arbitration proceedings,

         the Borrower shall as an independent obligation, within three (3)
         Business Days of demand, indemnify the Secured Party against any cost,
         loss or liability arising out of or as a result of the conversion
         including any discrepancy between (A) the rate of exchange used to
         convert that Sum from the First Currency into the Second Currency and
         (B) the rate or rates of exchange available to the Secured Party at the
         time of its receipt of that Sum.

(b)      The Borrower waives any right it may have in any jurisdiction to pay
         any amount under this Charge in a currency or currency unit other than
         that in which it is expressed to be payable.

15.4     RIGHTS CUMULATIVE

The rights and remedies provided by this Charge are cumulative and not exclusive
of any rights or remedies provided by law.

15.5     MORTGAGEE IN POSSESSION

Neither the Secured Party nor any Receiver shall by reason of its taking any
action permitted by this Charge or its taking possession of the Secured Property
or any part of it be liable to account as mortgagee in possession or be liable
for any loss on realisation or for any default or omission

                                      -14-

<PAGE>

for which a mortgagee in possession might be liable other than for its own
fraud, gross negligence and wilful misconduct, or the fraud, gross negligence or
wilful misconduct of its delegates.

16.      ASSIGNMENT

16.1     THE BORROWER'S RIGHTS

The rights of the Borrower under this Charge are not assignable or transferable
and the Borrower agrees that it will not purport to assign all or any such
rights.

16.2     THE SECURED PARTY'S RIGHTS

The rights of the Secured Party under this Charge are assignable in whole or in
part and the Secured Party may assign all or any such rights without the consent
of the Borrower. The Secured Party shall provide written notice to the Borrower
of any such assignment.

17.      NOTICES

(a)      All notices, requests, approvals, consents and other communications
         provided for hereunder shall be in writing (including, unless the
         context expressly otherwise provides, by facsimile transmission,
         provided that any matter transmitted by the Borrower by facsimile (i)
         shall be promptly confirmed by a telephone call to the recipient at the
         number specified on the applicable signature page hereof, and (ii)
         shall be followed promptly by a hard copy original thereof by express
         courier) and faxed or delivered, to the address or facsimile number
         specified for notices on the applicable signature page hereof or to
         such other address as shall be designated by such party in a written
         notice to the other parties hereto.

(b)      All such notices, requests, approvals, consents and communications (i)
         sent by express courier will be effective upon delivery to or refusal
         to accept delivery by the addressee, and (ii) transmitted by facsimile
         will be effective when sent and facsimile confirmation received; except
         that all notices and other communications to any Agent shall not be
         effective until actually received.

(c)      The Borrower acknowledges and agrees that any agreement of the Secured
         Party to receive certain notices by telephone and facsimile is solely
         for the convenience and at the request of the Borrower. The Secured
         Party shall be entitled to rely on the authority of any Person
         purporting to be a Person authorized by the Borrower to give such
         notice and the Secured Party shall not have any liability to the
         Borrower or other Person on account of any action taken or not taken by
         the Secured Party in reliance upon such telephonic or facsimile notice.

(d)      All notices, requests and other communications hereunder and under the
         other Financing Documents shall be in the English language unless
         otherwise agreed by the parties hereto.

                                      -15-

<PAGE>

18.      GOVERNING LAW AND JURISDICTION

THIS CHARGE IS GOVERNED BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF
THE CAYMAN ISLANDS.

19.      SUBMISSION

(a)      For the exclusive benefit of the Secured Party, the Borrower
         irrevocably agrees that the courts of Cayman are to have jurisdiction
         to settle any claims or disputes arising under, out of or in connection
         with this Charge (including without limitation any claim or dispute
         relating to the validity, interpretation, performance, termination or
         enforcement of this Charge) and that accordingly any suit, action or
         proceedings in that respect (together in Clauses 19 and 20 referred to
         as "PROCEEDINGS" ) may be brought in such courts.

(b)      The Borrower irrevocably waives and agrees not to raise any objection
         which it may have now or hereafter to the laying of the venue of any
         Proceedings in the courts of Cayman and any claim that any such
         Proceedings have been brought in an inconvenient or inappropriate
         forum.

(c)      The Borrower irrevocably agrees not to take Proceedings in any court of
         competent jurisdiction other than the courts of Cayman, save with
         respect to any counterclaim asserted by the Borrower in the course of
         proceedings previously commenced by the Secured Party. Nothing
         contained in this Clause 19 shall limit the right of the Secured Party
         to take Proceedings against the Borrower in any other court of
         competent jurisdiction, nor shall the taking of Proceedings in one or
         more jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

20.      JUDGMENTS AND IMMUNITY

(a)      The Borrower recognizes and acknowledges that this Charge constitutes a
         commercial transaction and accordingly it acknowledges and agrees that
         it is not entitled to plead, and pursuant to this Clause 20 hereby
         waives to the fullest extent permitted by law any right to claim,
         sovereign immunity for any purpose whatsoever, including, but not
         limited to, any right to plead sovereign immunity in respect of any
         Proceedings pursuant to this Charge.

(b)      The Borrower consents generally, in respect of any Proceedings pursuant
         to this Charge for the purpose of enforcing any order, judgment or
         award, to the giving of any relief or the issuing of any process in
         connection with such order, judgment or award including, without
         limitation, the making, enforcement or execution against any property
         of any order, judgment or award and to the extent that the Borrower may
         be entitled in any jurisdiction to claim for itself or its property
         immunity in respect of its obligations under this Charge from any suit,
         execution, attachment (whether in aid of execution, before judgment or
         otherwise) or legal process or to the extent that in any jurisdiction
         there may be attributed to itself or its property such immunity, the
         Borrower agrees not to claim and hereby irrevocably waive such immunity
         to the fullest extent permitted by the laws of such jurisdiction.

                                      -16-

<PAGE>

(c)      The Borrower unconditionally and irrevocably agrees, with respect to
         any final order, judgment or award in any Proceedings made pursuant to
         this Charge and not subject to appeal (a "JUDGMENT"), that:

         (i)      the Judgment shall be conclusive and binding upon it;

         (ii)     it shall be bound by and recognize the Judgment in any
                  jurisdiction;

         (iii)    to the extent permitted by law, it shall not claim, invoke on
                  its behalf or for its benefit any right it may have under the
                  laws of Cayman, or any other state or jurisdiction, to
                  prevent, delay, hinder, nullify or in any other way obstruct
                  the enforcement or execution of the Judgment; and

         (iv)     to the extent permitted by law, it shall not, and shall
                  irrevocably waive any right to, challenge the Judgment on any
                  ground or the enforcement or execution of the Judgment in any
                  jurisdiction (other than by way of appeal in the original
                  jurisdiction).

21.      COUNTERPARTS AND EFFECTIVENESS

21.1     COUNTERPARTS

This Charge may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.

21.2     EFFECTIVENESS

This Charge shall take effect and be delivered as a deed on the date on which it
is stated to be made.

22.      AMENDMENT OR WAIVER

No provision of this Agreement may be amended, supplemented, modified or waived,
except by written instrument signed by each of the parties hereto.

                                     * * *

                                      -17-

<PAGE>

IN WITNESS WHEREOF this Charge has been executed as a deed by the parties hereto
and has been delivered on date stated at the beginning of this Deed.

THE BORROWER                               )
Executed on behalf of                      )
CONSOLIDATED WATER CO. LTD.                ) /s/ Jeffrey M. Parker
as a deed by:                              )
         Name: Mr. Jeffrey Parker
         Title: Chief Executive Officer

Notice Address:
Address:
P.O.Box 1114 GT
Trafalgar House
Grand Cayman, Cayman Islands.
Attention: Mr. Jeffrey Parker

Telephone No.: 345 945-4277
Telecopier No. 345 949-2957

SECURED PARTY                              )
EXECUTED ON BEHALF OF                      ) /s/ Bruce John
SCOTIABANK (CAYMAN ISLANDS) LTD.           )
as a deed by:
         Name:  Mr. Bruce John
         Title: Commercial Banking Manager

Notice Address:
Address:
Scotiabank (Cayman Islands) Ltd.
Scotia Centre
Cardinal Avenue
P.O. Box 689
Grand Cayman

Attention: Commercial Banking Manager

Telephone No.: 345 949-7666
Telecopier No. 345 949-5130

<PAGE>

         By its execution of this Equitable Charge of Shares, DESALCO LIMITED
hereby acknowledges the terms and conditions hereof, and irrevocably undertakes
that should the Secured Party exercise its rights under this Equitable Charge of
Shares, DesalCo Limited shall not take any action, or fail to take any required
action, which would have the effect of frustrating the Secured Party's ability
to be recorded in the Register of Members as the registered legal and beneficial
owner of the Shares.

DESALCO LIMITED

/s/ Jeffery Parker

Name: Mr. Jeffrey Parker

Title: Chief Executive Officer

                                      -2-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>26
<FILENAME>g80228exv10w46.txt
<DESCRIPTION>REIMBURSEMENT AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.46

                             REIMBURSEMENT AGREEMENT
                                       FOR
                               LETTER OF GUARANTEE

                                                          Date: February 5, 2003

TO:          Scotiabank (Cayman Islands) Ltd.(Hereinafter called The "Bank")
(address):   P.O. Box 689GT, Grand Cayman, Cayman Islands

FROM:        Consolidated Water Co. Ltd                      (the "Applicant")
(address)    P.O. Box 1114GT, Grand Cayman, Cayman Islands

SUBJECT:     Letter of Guarantee in the amount of One Million United States
             Dollars (US$1,000,000)

             Expiring August 4,2003 (the "Guarantee") issued to The Cayman
             Islands Government (the "Beneficiary").

         IN CONSIDERATION OF the issue by the Bank of the Guarantee in the form
of substantially in the form of the Letter of Guarantee attached hereto in
favour of the Beneficiary, the Applicant agrees as follows:

1.       The Applicant will pay to the Bank on demand at its above address for
         value on the date of such demand the amount of each demand or other
         request for payment (each, a "Demand") made by the Beneficiary or its
         successors or assigns under the Guarantee (whether made before, on, or
         if in accordance with the law applicable to the Guarantee, after the
         expiry date stated in the Guarantee), except that:

         (a)      if such Demand is made under the Guarantee and payment by the
                  Bank is made in a currency other than United States dollars
                  the Applicant will pay the equivalent in United States
                  dollars, at the Bank's then selling rate of exchange for such
                  currency in the place in which such Demand is payable or, at
                  the option of the Bank, will pay to the Bank in such other
                  currency in a place, form and manner acceptable to the Bank;
                  and

         (b)      if a time Demand is made under the Guarantee, the Bank may
                  notify the Applicant of the amount and maturity date of such
                  Demand and the Applicant will make such payment without demand
                  sufficiently in advance of its maturity to enable the Bank to
                  arrange for cover in same day funds to reach the place where
                  such Demand is payable no later than the date of the maturity
                  of such Demand.

2.       The Applicant will pay to the Bank on demand:

         (a)      in respect of Demands paid by the Bank or any correspondent of
                  the Bank and not reimbursed to the Bank under Section I
                  hereof, interest on all amounts remaining unpaid under Section
                  I hereof from time to time at a fluctuating rate of interest
                  per annum equal to * 1.0% per annum above the rate of interest
                  determined and adjusted by the Bank from time to time as the
                  Bank's U.S. Dollar Base Rate for such amount applicable on the
                  day of demand and, thereafter, on the first day of each
                  month);

         (b)      commissions in respect of the Guarantee (so long as the Bank
                  shall be contingently obligated under the Guarantee) and fees
                  and charges for issuing guarantees all computed and payable at
                  such times and at such rates as and in accordance with the
                  Bank's prevailing practice at the time of determination; and

         (c)      all expenses which the Bank may pay or incur in connection
                  with the Guarantee.

         [ILLEGIBLE]

3.       The obligation of the Applicant to reimburse the Bank in accordance
         with Section I shall be absolute, unconditional and irrevocable and
         shall not be reduced by any Demand paid or acted upon being invalid,
         insufficient, fraudulent or forged or be subject to any defense or be
         affected by any right of set off, counter-claim or recoupment which the
         Applicant may now of hereafter have against a Beneficiary, the Bank or
         any other person for any reason whatsoever including the fact that the
         Bank or its correspondents paid a Demand or Demands (if applicable)
         aggregating up to the amount of the Guarantee notwithstanding:

         (a)      any contrary instructions from the Applicant;

         (b)      the occurrence of any event including, without limitation, the
                  commencement of legal proceedings to prohibit payment of such
                  Demand; or

         (c)      the issuance of any order of any government, agency, governing
                  body or court whether or not having jurisdiction in the
                  premises.

         Any action, inaction or omission taken or suffered by the Bank or by
         any of the Bank's correspondents under or in connection with the
         Guarantee or any Demand made thereunder, if in good faith and in
         conformity with foreign or Cayman Islands laws, regulations or customs
         applicable thereto shall be binding upon the Applicant and shall not
         place the Bank or any of its correspondents under any resulting
         liability to the Applicant. Without limiting the generality of the
         foregoing, the Bank and its correspondents may receive, accept or pay
         as complying with the terms of the Guarantee, any Demand thereunder,
         otherwise in order which may be signed by, or issued to, the
         administrator or any executor of, or the trustee and bankruptcy of, or
         the receiver for any property of or other person or entity acting as
         the representative or in the place of, the Beneficiary or its
         successors or assigns. The Applicant covenants that it will not take
         any steps, issue any instructions to the Bank or any of its
         correspondents or institute any proceedings intended to derogate from
         the right or ability of the Bank or its correspondents to honour and
         pay any Demand.

4.       All payments by the Applicant shall be made free and clear of and
         without deduction for any and all present and future taxes, levies and
         withholdings including stamp and documentary taxes, other than taxes
         imposed on the net income of the Bank, (collectively "Taxes"). If the
         Applicant is required by law to deduct any Taxes from or in respect of
         any amount paid or payable hereunder, such amount shall be increased as
         necessary so that the Bank receives an amount equal to the sum it would
         have received had no such deductions been made and the Applicant shall
         pay same to the relevant taxing authority and give to the Bank
         acceptable evidence of such payment. The Applicant will indemnify the
         Bank for any Taxes paid by the Bank in respect of any amount paid or
         payable by the Applicant hereunder. The provisions of this Section
         shall survive payment in full hereunder.

5.       Upon the happening and continuation of any one or more of the following
         events (an "Event of Default");

         (a)      the non-payment of any of the obligations of the Applicant
                  under this Agreement or otherwise when due;

         (b)      the failure of the Applicant to perform or observe any term or
                  covenant hereof;

         (c)      the failure of the Applicant to pay its debts as they become
                  due or the admission in writing by the Applicant of its
                  inability to pay its debts generally, the institution by or
                  against the Applicant of proceedings respecting bankruptcy,
                  insolvency, liquidation, winding up, reorganization,
                  arrangement, adjustment, protection, relief, composition of it
                  or its debts under any laws relating to bankruptcy, insolvency
                  or reorganization or relief of debtor or the seeking of entry
                  of an order for relief or the appointment of a receiver,
                  trustee or other similar official for the Applicant or for any
                  substantial part of its property or the taking of any
                  corporate action by the Applicant to authorize any of such
                  actions;

         (d)      the occurrence of any of the events with respect to any person
                  or entity which has guaranteed any obligations of the
                  Applicant to the Bank;

         then the amount of the Bank's contingent liability (as determined by
         the Bank) under the Guarantee, as well as any and all other obligations
         of the Applicant under this Agreement shall, at the option of the Bank,
         become due and payable immediately upon demand to the Applicant.

6.       All security now or hereafter held by the Bank for the payment or
         discharge of any and all present or future indebtedness and liability
         of the Applicant to the Bank and all property of the Applicant now or
         hereafter in the possession or control of the Bank for any purpose
         including monies on deposit and property held for safekeeping, shall be
         held by the Bank as security for the payment of all amounts which may
         become payable by the Applicant to the Bank under or in connection with
         this Agreement. If at any time the Bank requires collateral (or
         additional collateral), the Applicant will, on demand, assign and
         deliver to the Bank as security for any and all obligations of the
         Applicant now or hereafter existing under this Agreement collateral of
         a type and value satisfactory to the Bank or make such cash payment as
         the Bank may require.

<PAGE>

7.       Upon default by the Applicant in payment of any amount due and payable
         hereunder the Bank may, without advertisement and without notice to the
         Applicant, sell public or private sale or realize in such other manner
         as the Bank thinks fit all or any security held by the Bank upon such
         terms and conditions as the Bank thinks fit; and any moneys received by
         the Bank as proceeds of any such sale or realization, after deduction
         of all costs and expenses incurred by the Bank in connection therewith,
         shall be applied against any amount payable by the Applicant to the
         Bank under this Agreement and on any other indebtedness or liability of
         the Applicant to the Bank.

8.       The Applicant will indemnify the Bank from and against:

         (a)      all loss or damage to the Bank arising out of its issuance of,
                  or any other action taken by the Bank in connection with, the
                  Guarantee other than loss or damage resulting from its gross
                  negligence or willful misconduct; and

         (b)      all costs and expenses (including attorneys' fees and
                  expenses) of all claims or legal proceedings arising out of
                  the Bank's issuance of the Guarantee or incident to the
                  collection of amounts owed by the Applicant hereunder or the
                  enforcement of the Bank's rights hereunder, including, without
                  limitation, legal proceedings related to any court order,
                  injunction, or other process or decree restraining or seeking
                  to restrain the Bank from paying any amount under a Demand.

9.       Upon payment by the Bank of any Demand or the occurrence and during the
         continuance of any Event of Default, the Bank is hereby authorized to
         set-off and apply any and all deposits (at any time held) and other
         indebtedness at any time owing by the Bank to or for the credit of the
         account of the Applicant against any and all obligations of the
         Applicant now or hereafter existing under this Agreement irrespective
         of whether or not the Bank shall have made demand under this Agreement
         and despite such deposit, indebtedness or obligation being unmatured or
         contingent. The rights of the Bank under this Section 9 are in addition
         to other rights and remedies which the Bank may have.

10.      If for the purpose of obtaining judgement in a court or tribunal in any
         jurisdiction it is necessary to convert an amount due hereunder in any
         currency (the "Obligation Currency") to an equivalent amount of another
         currency (the "Judgement Currency") such conversion shall be made at
         the Rate of Exchange quoted by the The Bank of Nova Scotia in New York,
         United States of America at 10:00 a.m. on the business day immediately
         prior to the date of judgement (the "Pre-Judgement Date"). As a
         separate obligation which shall not be affected by judgement being
         obtained for other sums due hereunder, if the Rate of Exchange used to
         determine such equivalent amount is different from the Rate of Exchange
         prevailing on the date of actual payment of the amount so due, then the
         Applicant will pay such additional amounts (if any, but in any event
         not a lesser amount) as may be necessary to ensure that the amount of
         the Judgement Currency received by the Bank will be sufficient to
         permit the Bank to convert such amount of the Judgement Currency to an
         amount in the Obligation Currency equal to the amount of the Obligation
         Currency owed hereunder on the Pre-Judgement Date.

         [ILLEGIBLE]

11.      This Agreement shall be binding upon the Applicant, its successors and
         assigns and shall ensure to the benefit of the Bank, its successors,
         transferees and assigns. Any provision of this Agreement which is void
         or unenforceable shall be ineffective in the extent void or
         unenforceable and shall be severable from the other provisions hereof
         and this Agreement shall be interpreted as if such provision were not
         included herein. This Agreement shall be governed by and construed in
         accordance with the laws of The Cayman Islands except to the extent
         that such laws are inconsistent with the laws under which a Demand
         maybe made under the Guarantee.

         [ILLEGIBLE]

12.      If, with respect to the Guarantee, the expiry date be extended, the
         amount be increased or any of the terms and conditions be altered at
         the request of the Applicant, all of the terms and conditions of this
         Agreement will apply to the Guarantee as amended and remain in full
         force and effect without releasing any party hereto.

                                        Consolidated Water Co. Ltd

Witness: /s/ [ILLEGIBLE]                /s/ Jeffrey M. Parker
         ---------------                ----------------------------------
                                        (AUTHORIZED SIGNATURES)
                                        (IN CASE OF INCORPORATED COMPANIES AND
                                        OTHER ORGANIZATIONS THIS FORM MUST BE
                                        SIGNED BY PROPERLY AUTHORIZED OFFICIALS.
                                        THE COMPANY NAME MUST APPEAR ABOVE THE
                                        SIGNATURES.)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.47
<SEQUENCE>27
<FILENAME>g80228exv10w47.txt
<DESCRIPTION>DEED OF SUBSTITUTED DEBENTURE
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.47

THIS DEED OF SUBSTITUTED DEBENTURE made on February 7, 2003

BETWEEN:-

(1)      CONSOLIDATED WATER CO. LTD. incorporated under the laws of the Cayman
         Islands of P.O. Box 1114 G.T. Grand Cayman (the "Company", which
         expression shall include its successors and assigns); and

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. incorporated under the laws of and
         licensed to carry on banking business in the Cayman Islands of P.O.Box
         689 G.T. Grand Cayman (the "Bank", which expression shall include its
         successors, transferees and assigns);

WHEREAS

A.       The Royal Bank of Canada ("RBC") has made available to the Company a
         revolving loan facility in the amount of US$3,000,000.00 ("the RBC
         Facility").

B.       As security for the RBC Facility the Company entered into a Debenture
         dated 1st.June 1979 between,inter alia, the Company and RBC ("the RBC
         Debenture")( the same having been amended from time to time and stamped
         ad valorem to the full amount of the RBC Facility) together with
         certain collateral land charges over over various parcels of land owned
         by the Company ( as varied from time to time (together referred to as
         "the RBC Security").

C.       Pursuant to a Deed of Assignment of even date herewith and in
         consideration of the payment made thereunder by the Bank to RBC, RBC
         has assigned all of its rights, title and interest in the RBC Security
         to the Bank

D.       The Bank has, pursuant to a loan agreement ("the Loan Agreement")
         bearing even date herewith agreed to make available to the Company
         certain loans not exceeding US$39,100,000.00.

E.       The parties have agreed to substitute this Debenture for the RBC
         Debenture as security for the indebtedness of the Company to the Bank
         under the terms of the Loan Agreement.

F.       To further secure the loans made available to the Company by the Bank
         under the Loan Agreement and in addition to the RBC Security the Bank
         will take such additional security as agreed with the Company, such
         additional security to be supplemental and collateral hereto and in
         such form and on such terms as the Loan Agreement shall require or the
         parties shall otherwise agree.

<PAGE>

                                       2

WITNESSES as follows:-

1.       DEFINITIONS AND INTERPRETATION

1.1      In this Deed of Debenture, unless the contrary shall be expressed or
the context shall otherwise require:-

(1)      the following words and expressions shall have the following meanings,
         that is to say:-

"ACCOUNT BANK" means each of the Bank and any other bank or financial
institution for the time being and from time to time approved by the Bank in
writing as a bank or other financial institution with whom the Company may have
an account or accounts into which the Company may pay its Trading Debts. Such
approval may be given as well before as on or after the date hereof, provided
that it shall expressly refer to this Debenture.

"AGREEMENT" means the Loan Agreement and all other (if any) agreements (other
than these presents) for the time being and from time to time in force between
the Bank and the Company (and whether entered into before or after this
Debenture) regulating any business relationship between the Company and the
Bank.

"ASSETS" means assets of every kind, including, but without limitation, the
benefit of an agreement, a building or other fixture, a business, goods,
goodwill, immovable property, money, plant or other equipment, stock-in-trade,
the uncalled capital of a body corporate, an undertaking and work-in-progress
and any interest therein and, as the context shall require or admit, any part of
such assets.

"BANK ACCOUNTS" means all the Charged Assets in Clauses 3.1(3)(p) and (q) and
"Bank Account" shall be construed accordingly.

"CHARGED ASSETS" means all the assets of the Company for the time being and from
time to time the subject of or expressed to be the subject of any interest by
way of security created by the Company in favour of the Bank under or pursuant
to these presents or a Land Charge and, as the context shall require or admit,
any part of such assets. A reference to Charged Assets in a particular
Sub-clause or Sub-clauses of Clause 3.1 is a reference to the assets becoming or
being expressed to become the subject of such an interest by way of security as
a result of a reference to them being made in that Sub-clause or those
Sub-clauses, respectively.

"DELEGATE" means a delegate or sub-delegate of the Bank described in Clause
9(3).

"THIS DEBENTURE" means this Deed of Substituted Debenture.

<PAGE>

                                       3

"FINANCE LEASE" shall have the meaning given in the Statement of Standard
Accounting Practice number 21 issued by the Institute of Chartered Accountants
in England and Wales.

"GUARANTOR" means any person who shall for the time being and from time to time
guarantee to the Bank the payment or discharge of the Indebtedness, and
references to the "relevant guarantee" shall be construed accordingly.

"IMMOVEABLE PROPERTY" means any freehold, leasehold, heritable or other land or
buildings wheresoever situate and any estate or interest therein, and shall,
where the context shall admit, include any part thereof.

"IMMOVEABLE PROPERTY" means all the Charged Assets in Clauses 3.1(1) and 3.1(2)
and, as the context shall require or admit, any part of such Charged Assets.

"INDEBTEDNESS" means all monies, liabilities and other sums of whatsoever nature
covenanted to be paid and discharged by the Company to the Bank under Clause 2
and, as the context shall require or admit, any part of such monies, liabilities
and other sums.

"INTELLECTUAL PROPERTY" means all the Charged Assets in Clauses 3.1(3) (j) and
(k) and, as the context shall require or admit, any part of such Charged Assets.

"INTEREST BY WAY OF SECURITY" means any mortgage, pledge, lien, charge,
assignment by way of security, hypothecation, title retention, finance lease,
factoring or discounting of debts or any other agreement or arrangement for or
by way of security, including such as arises or is imposed by operation or
implication of applicable law and including any account with bankers earmarked
or designated for the use of making preferential payments pursuant to Section
162 of The Companies Law (2002 Revision) or any other provision of applicable
law having similar or substantially similar effect.

"LAND CHARGE" means a collateral land charge of Immoveable Property executed by
the Company in favour of the Bank pursuant to Clause 3.4, and "Land Charges"
shall be construed accordingly.

"LOAN AGREEMENT" means the Loan Agreement entered into between the Company and
the Bank bearing even date herewith setting out the terms and conditions of the
loan facility and shall be construed so as to include the Loan Agreement as the
same may for the time being and from time to time be modified amended or
supplemented

"NON-REALTY CHARGED ASSETS" means the Charged Assets excluding Immoveable
Property.

"NON-TRADING DEBTS" means all the Charged Assets in Clause 3.1(3)(d) and, as the
context shall require or admit, any part of such Charged Assets.

<PAGE>

                                       4

"PERSON" means an individual, a firm, a partnership (whether of not having
separate legal personality), an unincorporated body, a body corporate, a
corporation and a national or local government or governmental agency or body,
and, in each case, wheresoever resident, incorporated or formed.

"PLANNING LEGISLATION" means all applicable statutes for the time being and from
time to time in force in relation to the use or development of immoveable
property and all regulations then made or taking effect as if made thereunder.

"PROHIBITED SECURITY INTEREST" means any interest by way of security other
than:-

(a)      such as arises or is imposed by operation or implication of law and is
         not intended to arise for that purpose;

(b)      any agreement or arrangement for the retention of title to goods which
         is not entered into for the purpose of raising finance;

(c)      such as arises as a result of normal banking arrangements of the
         Company with an Account Bank in respect of the collection of cheques
         (including cheques expressed in a foreign currency) in respect of the
         collection of Trading Debts; and

(d)      the security hereby constituted.

"RECEIVER" includes any receiver or receiver and manager.

"RECEIVER" means any individual or individuals (who may be an employee or
employees of the Bank) for the time being and from time to time appointed by the
Bank to be a receiver or receivers (and, where more than one individual is
appointed jointly, they shall have the power to act severally, unless the Bank
shall specify to the contrary in their appointment) under these presents and,
where the context shall admit, any individual or individuals for the time being
and from time to time so appointed in substitution.

"SECURITY HEREBY CONSTITUTED" means the interests by way of security from the
time being and from time to time constituted by or in pursuance of these
presents and includes interests by way of collateral security and, as the
context shall require or admit, any such interests, but does not include Land
Charges.

"SPECIFICALLY CHARGED ASSETS" means all the Charged Assets in the Sub-clauses to
Clauses 3.1(1), (2) and (3) and, as the context shall require or admit, any part
of such Charged Assets.

"SPECIFICALLY CHARGED PLANT" means all the Charged Assets in Clauses 3.1(3)(a)
and (b) and, as the context shall require or admit, any part of such Charged
Assets.

<PAGE>

                                       5

"SPECIFICALLY CHARGED SECURITIES" means all the Charged Assets in Clauses
3.1(3)(e), (f) and (g) and, as the context shall require or admit, any part of
such Charged Assets.

"THESE PRESENTS" means this Debenture and any deed for the time being and from
time to time expressed to be supplemental hereto and any other deed or document
for the time being from time to time conferring rights upon the Bank or to which
it may be a party executed or entered into pursuant to this Debenture or any
deed for the time being and from time to time supplemental thereto, but does not
include Land Charges.

"TRADING DEBTS" means all the Charged Assets in Clause 3.1(3)(c) and, as the
context shall require or admit, any part of such Charged Assets.

(2)      words and expressions (including defined words and expressions)
         importing the singular number include the plural and vice versa and
         those importing the masculine gender include and feminine.

(3)      any reference to:-

         (a)      any law or legal provisions is to that law or provision as for
                  the time being and from time to time amended, extended or
                  substantially replaced or re-enacted, and shall include a
                  reference to any regulations made under the law or provision.

         (b)      fees, costs, charges and expenses shall include a reference to
                  any transactional tax or duty for the time being and from time
                  to time applicable to or chargeable in respect of those fees,
                  costs, charges and expenses.

         (c)      a Clause or Schedule is a clause in, or a schedule to, this
                  Debenture.

         (d)      a Sub-clause is to a sub-clause in the clause or sub-clause in
                  this Debenture in which that reference is made.

1.2      Underlinings, headings and descriptions of provisions of this Debenture
         are inserted for convenience only and shall be ignored in construing or
         interpreting this Debenture.

1.3      Reference to a "Law" shall include a reference to such Law and/or any
         provision thereof as from time to time re-enacted, amended, extended or
         replaced.

2.       MONIES SECURED

The Company will, on demand, pay and discharge to the Bank:-

(1)      Monies: all monies and other liabilities, whether principal, interest,
         commission, charges, costs, expenses or otherwise, which now are, or at
         any time hereafter may become, due or

<PAGE>

                                       6

         owing to the Bank by the Company either alone or jointly with any other
         person whether actual or contingent and whether as principal debtor,
         guarantor, surety or otherwise;

(2)      Costs: on a full and unlimited indemnity basis, all costs, stamp
         duties, recording fees, commission, charges, expenses and other sums
         for the time being and from time to time incurred by the Bank or by or
         through any Receiver or by or through any attorney, delegate,
         sub-delegate, substitute, agent or employee of the Bank or a Receiver,
         for any of the purposes described in these presents or a Land Charge or
         in or about the exercise of any power, authority or discretion
         conferred on the Bank or any Receiver by or pursuant to these presents
         or a Land Charge or by law or in relation to the security hereby
         constituted or a Land Charge or in or about the protection,
         realisation, enforcement, collection or recovery of monies for the time
         being and from time to time arising under the security hereby
         constituted or a Land Charge and all remuneration of any Receiver and
         any attorney, delegate, sub-delegate, substitute or agent of the Bank
         or a Receiver; and

(3)      Interest: interest, as well before as after judgment, on each amount
         due under Sub-clauses (1) and (2) until the same shall have been fully
         discharged at such rate as shall for the time being and from time to
         time be prescribed by the Agreement for that amount and, in the case of
         each such amount due under Sub-clause (2), such interest to accrue on a
         daily basis as from the date on which that amount was incurred (and
         whether or not that date shall have occurred prior to a demand for that
         amount under this Clause 2).

3.       THE CHARGES

3.1      Charging Provision

The Company, as beneficial owner and as continuing security for the
Indebtedness, hereby charges to the Bank:-

         Immoveable Property

(1)      by way of first specific equitable charge:-

         (a)      all (if any) the immoveable property described in Schedule 1;

         (b)      all other immoveable property belonging to the Company at the
                  date hereof; and

         (c)      all fixtures (including trade fixtures) and fixed plant and
                  machinery for the time being and from time to time on or in
                  any of the Immoveable Property in Sub-clause (a) and (b);

<PAGE>

                                       7

(2)      by way of first specific equitable charge:-

         (a)      all immoveable property (other than that (if any) described in
                  Schedule 1) now or at any time hereafter belonging to the
                  Company or in which the Company does now or shall at any time
                  hereafter have any interest by way of security; and

         (b)      all fixtures (including trade fixtures) and fixed plant and
                  machinery for the time being and from time to time on or in
                  any of the Immoveable Property in Sub-clause (a);

(3)      by way of first specific charge:-

         Specifically Charged Plant

         (a)      all (if any) the plant, machinery, chattels and other
                  equipment described in Schedule 2 and any part or parts
                  thereof or thereto;

         (b)      all additions, alterations, accessories, replacements and
                  renewals for the time being and from time to time to or of any
                  of the Charged Assets in Sub-clause (a);

         Trading Debts

         (c)      all debts, other than Non-Trading Debts, now or hereafter due
                  or owing or to become due or owing to the Company on any
                  account whatsoever and whether actual or contingent and
                  including cash at bank, as have arisen or shall arise in the
                  ordinary and usual course of trading of the Company and
                  whether or not the same would or shall be entered into the
                  books of the Company;

         Non-Trading Debts

         (d)      all debts now or hereafter due or owing or to become due or
                  owing to the Company on any account whatsoever and whether
                  actual or contingent as have arisen or shall arise (and
                  whether or not entered into the books of the Company):-

                  (i)      as an amount for the time being and from time to time
                           payable (including, but without limitation, any
                           consideration, premium, rent, royalty or fee) in
                           respect of any sale, lease, licence or other disposal
                           by the Company of any of the Immoveable Property, the
                           Specifically Charged Plant, the Specifically Charged
                           Securities, the goodwill of the Company both present
                           and future and the Intellectual Property;

<PAGE>

                                       8

                  (ii)     as a dividend, interest or other distribution for the
                           time being and from time to time declared and/or
                           payable in relation to the Specifically Charged
                           Securities;

                  (iii)    as an amount for the time being and from time to time
                           payable in respect of an obligation or representation
                           or a warranty described in Sub-clause (m) or
                           insurance or a guarantee or interest by way of
                           security described in Sub-clause (n); or

                  (iv)     as an amount for the time being and from time to time
                           payable in respect of any other transaction or matter
                           outside the ordinary and usual course of trading of
                           the Company;

         Specifically Charged Securities

         (e)      all the stocks, shares, bonds, debentures, loan stocks, notes,
                  warrants and other securities now or hereafter belonging to
                  the Company in the capital of, or issued by, any of the
                  Company's subsidiaries for the time being and from time to
                  time;

         (f)      all the stocks, shares, bonds, debentures, loan stocks, notes,
                  warrants and other securities now or hereafter belonging to
                  the Company, or, instead, such (if any) as are described in
                  Schedule 3, or, instead, if none shall be listed in that
                  Schedule, none, other than, in each such case, the Charged
                  Assets in Sub-clause (e);

         (g)      all stocks, shares, bonds, debentures, loan stocks, notes,
                  warrants and other securities and other assets now or
                  hereafter accruing or offered by way of rights, bonus, option
                  or otherwise in respect of any of the Charged Assets in
                  Sub-clauses (e) and (f) or in this Sub-clause (g) but so that
                  nothing in these presents shall be construed as imposing on
                  the Bank any liability whatsoever in respect of any calls,
                  instalments or other payments or contributions in respect of
                  or relating to any of the Charged Assets in Sub-clauses (e)
                  and (f) or in this Sub-clause (g);

         (h)      all dividends, interest and other distributions for the time
                  being and from time to time declared, payable paid or made in
                  respect of any of the Charged Assets in Sub-clauses (e), (f)
                  or (g), including any of the same for the time being and from
                  time to time placed to the credit of an account of the Company
                  with, and owed to the Company by, a bank or other financial
                  institution and/or being cash at bank belonging to the
                  Company;

         Goodwill and uncalled capital

         (i)      all the goodwill and uncalled capital of the Company, both
                  present and future;

         Intellectual Property

<PAGE>

                                       9

         (j)      all the knowhow (and rights therein) and other confidential
                  information (and rights therein) and all the copyrights,
                  patents (including applications, improvements, prolongations,
                  extensions and rights to apply therefor), registered designs,
                  trade marks (and rights therein), service marks (and rights
                  therein) and other intellectual property of the Company, both
                  present and future;

         (k)      the benefit of all licences for the time being and from time
                  to time granted to or acquired by the Company in respect of
                  assets of the kind described in Sub-clause (j);

         Ancillary assets

         (l)      the benefit of all agreements for the time being and from time
                  to time entered into by the Company for the maintenance and/or
                  improvement of any of the Charged Assets in any of the
                  foregoing Sub-clauses in this Clause 3.1;

         (m)      the benefit of all obligations and representations and
                  warranties for the time being and from time to time undertaken
                  or given to the Company (and whether by law, contract or
                  otherwise howsoever) by any person in relation to any of the
                  Charged Assets in any of the foregoing Sub-clauses of this
                  Clause 3.1;

         (n)      the benefit for the time being and from time to time of any
                  insurance for the time being and from time to time effected by
                  the Company in respect of, and the benefit and proceeds for
                  the time being and from time to time of any guarantees or
                  interests by way of security for the time being and from time
                  to time given, granted or arising in favour of the Company in
                  relation to any of the Charged Assets in any of the foregoing
                  Sub-clauses of this Clause 3.1;

         (o)      the proceeds including cash at bank for the time being and
                  from time to time received by the Company of a payment in
                  respect of, or a disposal, collection or other realisation of,
                  any of the Charged Assets in any of the foregoing Sub-clauses
                  of this Clause 3.1;

         Bank Accounts

         (p)      the full benefit for the time being and from time to time of,
                  and all the Company's rights, title and interest in and to,
                  all (if any) the bank accounts described in Schedule 4, and
                  the debts constituted and represented by the credit balances
                  for the time being and from time to time on such accounts,
                  together with all interest for the time being and from time to
                  time accrued thereon;

         (q)      the full benefit for the time being and from time to time of,
                  and all the Company's rights, title and interest in and to,
                  all other bank accounts of the Company at the date hereof, and
                  the debts constituted and represented by the credit balances
                  for the time

<PAGE>

                                       10

                  being and from time to time on such accounts, together with
                  all interest for the time being and from time to time accrued
                  thereon; and

         Other assets

(4)      by way of first floating charge:-

         (a)      the undertaking and all the other assets of the Company (other
                  than the Specifically Charged Assets), both present and
                  future; and

         (b)      all the Specifically Charged Assets if and to the extent that
                  any of the interests by way of security constituted by these
                  presents over the Specifically Charged Assets shall be or
                  become ineffective as specific charges.

3.2      Crystallisation of floating charge

The floating charge created by Clause 3.1(4) shall become a specific charge:-

         (1)      as regards any assets subject thereto as may from time to time
                  be specified in a notice from the Bank to the Company if the
                  Bank shall, in its absolute discretion, consider that those
                  assets shall be in danger of being seized or sold under any
                  form of distress or execution levied or threatened or to be
                  otherwise in jeopardy, forthwith upon the service of such
                  notice;

         (2)      as regards any assets subject thereto which shall become
                  subject to specific charges in favour of any person other than
                  the Bank or subject to a disposition or an agreement to make a
                  disposition contrary to Clause 5(21) (Disposal of Specifically
                  Charged Assets), forthwith upon such charge or disposition;
                  and

         (3)      in accordance with Clause 6 (Events of Default).

3.3      Negative pledge

Save with the prior written consent of the Bank (which may be given as well
before as after the date hereof, provided it shall expressly refer to this
Debenture), the Company shall not and shall not agree to create, give, grant or
permit to arise or subsist over any of its assets present and future any
Prohibited Security Interest ranking in point or security in priority to, pari
passu with or subsequent to any security constituted by these presents or any
Land Charge.

3.4      Land Charges

<PAGE>

                                       11

Without prejudice to Clause 5(2) (Further Charges), the Company shall forthwith
execute in favour of the Bank collateral land charges in such form and on such
terms as the Bank shall require of all the immoveable property described in
Schedule 1, and of any other Immoveable Property as the Bank may for the time
being and from time to time require.

4.       REPRESENTATIONS & WARRANTIES

The Company hereby represents and warrants to the Bank, as follows:-

(1)      The Company has the power to enter into and perform its obligations as
         expressed in this Debenture and each Land Charge and has taken all
         necessary action to authorise the granting of interests by way of
         security upon the terms and conditions of this Debenture and each Land
         Charge and to authorise the execution, delivery and performance of its
         obligations as expressed in this Debenture and each Land Charge in
         accordance with their respective terms.

(2)      The execution, delivery and performance by the Company of the terms of
         this Debenture and each Land Charge does not and will not violate,
         conflict with or result in a breach of, in any respect:-

         (a)      any provisions of any law or regulation or any order, decree,
                  permit or licence of any authority, agency or court binding on
                  the Company or on any of its assets; or

         (b)      the constitutional documents or resolutions of the Company; or

         (c)      any subsisting loan stock or debenture or other deed, contract
                  or other undertaking or instrument to which the Company is a
                  party or which is binding upon it or any of its assets.

(3)      The Company is the sole and absolute beneficial owner of all the
         Charged Assets free from all Prohibited Security Interests other than
         those permitted or consented to by the Bank in accordance with Clause
         3.3 (Negative pledge).

(4)      The Company has not created, given, granted or permitted to arise or
         subsist any Prohibited Security Interest over any of its assets present
         and future other than those permitted or consented to by the Bank in
         accordance with Clause 3.3, and has not agreed so to do.

(5)      In connection with any consent given by the Bank in accordance with
         Clause 3.3 on or prior to the date hereof, the Company did furnish to
         the Bank true, complete and up to date written details of the existing
         interest(s) by way of security to which such consent relates.

<PAGE>

                                       12

(6)      The details of (if any) the immoveable property and the other assets in
         Schedules 1, 2, 3 and 4, the interests of the Company (in that
         immoveable property) in Schedule 1, and the location of the
         Specifically Charged Plant in Schedule 2, and the details of the bank
         accounts in Schedule 4 are true and correct in every material
         particular.

5.       COVENANTS

The Company hereby covenants and agrees with the Bank, until the discharge and
release of this Debenture, as follows:-

(1)      Documents of title to Immoveable Property and Specifically Charged
         Plant and Securities

Subject to the rights of any prior mortgagee, the Company shall deposit with the
Bank and the Bank shall be entitled to hold and retain all deeds and documents
of title for the time being and from time to time relating to the Immoveable
Property, all invoices and documents of title for the time being and from time
to time relating to the Specifically Charged Plant, and all certificates, deeds
and documents of title for the time being and from time to time relating to the
Specifically Charged Securities.

(2)      Further charges

The Company shall forthwith from time to time, if and when called upon by the
Bank so to do, execute in favour of the Bank or as the Bank shall direct such
further interests by way of security (including, but without limitation,
assignments by way of security and collateral security) as the Bank shall
require (but the covenants no more onerous than already contained in the
security hereby constituted) over the Charged Assets as further and continuing
security for the Indebtedness, such further interest by way of security to be
prepared by or on behalf of the Bank at the cost of the Company and, in the
event of any consent thereto being required from any other person, the Company
shall use its best endeavours to obtain the same.

(3)      Future Immoveable Property, Specifically Charged Plant and Securities

The Company shall notify the Bank forthwith upon any proposal or contract for
the time being and from time to time being made by the Company to acquire any
immoveable property or other assets which, following their acquisition would
become Immoveable Property, Specifically Charged Plant or Specifically Charged
Securities (as the case may be) and, in the case of any such immoveable property
the Company shall notify the Bank of the title number(s) thereof and shall apply
to The Registrar of Lands for the registration of the Company as the registered
proprietor thereof.

(4)      Maintenance

<PAGE>

                                       13

The Company shall:-

(a)      keep all buildings, fixtures (including trade fixtures) and fixed plant
         and machinery for the time being and from time to time on or in any of
         the Immoveable Property and all plant, machinery, other fixtures and
         fittings, implements, tools and other effects thereon and therein in a
         good state of repair and good working order and condition and shall, as
         necessary, renew and replace the same to a similar quality, as and when
         the same shall be worn out or destroyed; and

(b)      keep the Specifically Charged Plant in a good state of repair and
         condition and perfect working order and replace any part or parts
         thereof as may for the time being and from time to time be or become
         worn out, damaged or destroyed with new parts of similar quality.

(5)      Insurance

The Company shall:-

(a)      insure and keep insured such of its assets as are of an insurable
         nature against loss or damage by fire, aircraft, things dropping from
         aircraft, explosion, tropical storm, storm, tempest, flood, burst
         pipes, hurricane, windstorm, riot and impact and such other risks as
         the Bank may, for the time being and from time to time, consider
         necessary, to the full reinstatement value thereof, together with
         additional amounts sufficient to cover architects' and surveyors' fees
         and the costs of demolition, site clearance and shoring up or in such
         other amount as the Bank may in writing from time to time approve, with
         such reputable insurers and generally in such manner as the Bank shall
         from time to time approve in writing. The Company shall cause notice of
         the interest of the Bank to be noted on the policies of such insurance
         which (subject to the rights of any prior mortgagee) shall, unless
         otherwise from time to time agreed by the Bank in writing, be delivered
         to and retained by the Bank. The Company shall duly pay the premiums
         and other sums of money for the time being and from time to time being
         payable in respect of any such insurance and, immediately after every
         such payment, produce the receipt for the same to the Bank. All monies
         which may at any time hereafter be received or receivable under any
         insurance for the time being and from time to time effected in respect
         of the Immoveable Property or the Specifically Charged Plant (and
         whether or not effected pursuant to the foregoing provisions of this
         Sub-clause (a)) shall be applied in replacing, restoring or reinstating
         the assets destroyed or damaged or (subject to the rights of any prior
         mortgagee) in such other manner as the Bank shall require;

(b)      effect and maintain or cause to be effected and maintained such other
         insurances as are normally for the time being and from time to time
         maintained by prudent companies carrying on businesses similar or
         approximately similar to those for the time being and from time to time
         carried on by the Company including but not limited to consequential
         loss and loss of profits; and

<PAGE>

                                       14

(c)      not in any manner or by any means cause any such insurance to be
         avoided or vitiated.

(6)      Registration under The Registered Land Law

The Company shall not, without the prior written consent of the Bank, register
any person or cause any person to be registered under The Registered Land Law
(1995 Revision) and any subsequent Registered Land Laws as the proprietor of the
Company's interest in any of the Immoveable Property or any part thereof.

(7)      Notices affecting Immoveable Property or Specifically Charged Plant

The Company shall, in the event of a notice, order, direction, requisition or
permission or a proposal for any of the foregoing being served, affecting or
likely to affect the Immoveable Property or the Specifically Charged Plant or in
the event of any proceedings being commenced affecting or likely to affect the
same, immediately give full particulars thereof to the Bank and without delay
and at the Company's own cost take all reasonable or necessary steps to comply
with the same and/or, if so requested by the Bank, at the Company's own cost
make or join with the Bank in making such objections or representations against
or in respect of any of the same as the Bank shall deem expedient.

(8)      Planning Legislation

The Company shall not carry out any development in or upon the Immoveable
Property within the meaning of the Planning Legislation without first obtaining
such permission as may be required under or by virtue of the Planning
Legislation and the Company shall use the Immoveable Property only for such
purpose or purposes as may for the time being and from time to time be
authorised as the permitted use or user thereof under or by virtue of the
Planning Legislation.

(9)      Other compliance with law

The Company shall, in relation to its business and other assets for the time
being and from time to time, comply with all obligations under any present or
future statute, regulation, order or instrument or under any bye-law, regulation
or requirement of any competent authority and shall not use or permit any of its
assets for the time being from time to time to be used in contravention of any
legislation or otherwise or in any way contrary to law and shall as and when the
same shall become payable pay all taxes, rates, duties, charges, assessments and
other outgoings whatsoever (whether governmental, parochial, local or of any
other description) which shall be assessed, charged or imposed upon or payable
in respect of its business and other assets for the time being and from time to
time.

(10)     Compliance with contracts

<PAGE>

                                       15

(a)      The Company shall duly and punctually perform and observe all the
         covenants, agreements and other stipulations whatsoever as are not
         inconsistent with its obligations under these presents and as shall for
         the time being and from time to time be binding upon it, its business
         or other assets for the time being and from time to time and shall not
         do or suffer to be done any act or thing whereby any lease or licence
         for the time being and from time to time granted to or held by the
         Company may become liable to forfeiture or otherwise be determined.

(b)      The Company shall indemnify and hold harmless the Bank in respect of
         any breach of any covenants, agreements or stipulations for the time
         being and from time to time affecting the Immoveable Property.

(11)     Leases or licences of Immoveable Property and Intellectual Property: as
         lessee or licensee

The Company shall not agree, accept, suffer or permit any alteration, variation
or addition to the terms of any lease or licence under which it is for the time
being and from time to time a lessee or licensee and which is for the time being
and from time to time part of the Immoveable Property or the Intellectual
Property, without the prior written consent of the Bank.

(12)     Leases or licenses of Immoveable Property and Intellectual Property: as
         lessor or licensor

(a)      Unless otherwise agreed from time to time in writing by the Bank, the
         Company shall enforce the due observance and performance of all the
         obligations on the part of the lessee or licensee under any lease or
         licence under which it is for the time being and from time to time the
         lessor or licensor and which is for the time being and from time to
         time part of the Immoveable Property or the Intellectual Property,
         shall not waive, release or vary or agree to waive, release or vary any
         of the terms of any such lease or licence, shall not exercise any power
         to determine or extend any such lease or licence and shall not grant
         any consents or licences as lessor or licensor under any such lease or
         licence.

(b)      The Company shall not, without the prior written consent of the Bank,
         grant or agree to grant any lease or licence of, or other right or
         interest to occupy, the Immoveable Property or the Intellectual
         Property.

(13)     Removal and severance

The Company shall not, without the prior written consent of the Bank, pull down
or remove or permit to be pulled down or removed any buildings or erection for
the time being and from time to time included in the Immoveable Property or pull
down, remove or sever or permit to be pulled down, removed or severed any
fixtures (including trade fixtures) and fixed plant and machinery for

<PAGE>

                                       16

the time being and from time to time thereon or therein, except in pursuance of
any obligation imposed on the Company under these presents or a Land Charge.

(14)     Specifically Charged Plant

(a)      Except as may be agreed in writing from time to time by the Bank, the
         Company shall keep the Specifically Charged Plant in its sole and
         exclusive possession and at the location (if any) specified in Schedule
         2 and shall not, in any event, take them out of Cayman Islands and
         shall not use or permit them to be used for any purpose for which they
         are not designed or reasonably suitable.

(b)      The Company shall affix to or engrave on the Specifically Charged Plant
         such labels, plates or markings as the Bank shall from time to time
         require and shall not allow to be disturbed any labels, plates or
         markings which may be affixed to or engraved on the Specifically
         Charged Plant as a means of identification by the manufacturers or
         suppliers thereof or by any other person and shall not obliterate,
         obscure or cover up the same.

(c)      The Company shall not at any time without the prior written consent of
         the Bank make or suffer to be made any alteration or addition of a
         substantial nature in or to the Specifically Charged Plant other than
         for the purpose of effecting repairs as required by Sub-clause (4)(b)
         (Maintenance).

(d)      The Company shall not, without the prior written consent of the Bank,
         hire, lease or part with or share possession of or suffer any distress
         or execution to be levied or lien to be created upon the Specifically
         Charged Plant.

(e)      If the Company has created, given, granted or permitted to arise or
         subsist, or shall at any time create, give, grant or permit to arise or
         subsist, an interest by way of security on any premises where the
         Specifically Charged Plant are located, the Company shall forthwith
         notify the Bank of the same and, if called upon so to do by the Bank,
         shall forthwith procure from any person for the time being and from
         time to time enjoying such interest by way of security or being
         interested in such premises a waiver in such form as the Bank may from
         time to time require of all rights to which such person might otherwise
         be entitled to claim in the Specifically Charged Plant.

(f)      The Company shall not annex the Specifically Charged Plant to the
         premises where the same are located if the results of such annexure
         would be that the Specifically Charged Plant might become a fixture or
         fixtures.

(g)      The Company shall indemnify and hold harmless the Bank against all
         claims made or all proceedings brought in respect of any loss or damage
         or injury whatsoever arising out of or in connection with the
         Specifically Charged Plant, their manufacture, selection, delivery,
         possession, use or operation.

(15)     Debts and Bank Accounts

<PAGE>

                                       17

(a)      The Company shall, subject to Sub-clauses (b), (c) and (d), get in and
         realise the Trading Debts and the Non-Trading Debts and shall not sell,
         assign, factor or discount the same in any way.

(b)      The Company shall pay into an account with an Account Bank the proceeds
         of the collection or other realisation for the time being and from time
         to time of the Trading Debts (other than debts owed by an Account Bank
         to the Company as its customer) and, subject to any rights of that
         Account Bank in respect thereof, shall pay or otherwise deal with such
         proceeds in accordance with any directions for the time being and from
         time to time given in writing by the Bank.

(c)      Unless for the time being and from time to time agreed by the Bank in
         writing but subject to the rights of any prior mortgagee, the Company
         shall pay into an account of the Company with the Bank the proceeds of
         the collection or other realisation for the time being and from time to
         time of the Non-Trading Debts and shall pay or otherwise deal with such
         proceeds in accordance with any directions for the time being and from
         time to time given in writing by the Bank.

(d)      The Company shall, if called upon from time to time by the Bank
         pursuant to any provision of these presents, execute a legal assignment
         in favour of the Bank of any of the Trading Debts or the Non-Trading
         Debts and shall, if the Bank shall for the time being and from time to
         time require, give notice thereof to the debtors from whom such Trading
         Debts or Non-Trading Debts are for the time being owing or incurred and
         take such other steps as the Bank may from time to time require to
         perfect such legal assignment.

(e)      The Company shall forthwith join with the Bank in giving notice of
         these presents to each bank or other financial institution specified in
         Schedule 4 at or with which a Bank Account is kept or maintained, and
         if the Bank shall for the time being and from time to time require, the
         Company shall join with the Bank in giving notice of these presents to
         all other banks or other financial institutions at or with which a Bank
         Account is kept or maintained.

(16)     Specifically Charged Securities

(a)      The Company shall, if called upon to do so by the Bank from time to
         time, execute all such transfers and other documents as may be
         necessary to enable the Bank or its nominee or nominees to be
         registered as the owners of, or otherwise obtain legal title to, any of
         the Specifically Charged Securities.

(b)      The Company shall, promptly upon receipt of any communication sent to
         it in its capacity as a holder of any Specifically Charged Security,
         deliver the original or a copy thereof to the Bank, and shall consult
         with the Bank, prior to the exercise of all voting and other rights and
         powers attached or relating to the Specifically Charged Securities and,
         if the Bank shall not for the time being and from time to time have
         notified the Company in writing to the

<PAGE>

                                       18

         contrary (and whether before, during or after such consultation), shall
         exercise all such rights and powers for all purposes not inconsistent
         with the terms of these presents.

(c)      In the event that the Bank shall for the time being and from time to
         time notify the Company in writing to the following effect, the Bank
         and any nominee of the Bank for the time being and from time to time
         registered as the holder of the Specifically Charged Securities shall
         thereafter have the immediate and sole and exclusive right to exercise
         all voting and other rights and powers attaching or relating thereto
         and may exercise such rights and powers in such manner as it shall in
         its sole discretion think fit, and the Company shall execute and
         deliver to the Bank all such proxies, mandates and other documents as
         may be necessary to enable the Bank or such nominee to exercise such
         rights and powers.

(d)      The Bank shall not be under any liability to the Company in respect of
         any failure to present any certificate of or coupon on the Specifically
         Charged Securities which may be called or drawn for repayment or
         redemption or for any failure to pay any call or instalment which may
         be payable on, or to accept any offer relating to, the Specifically
         Charged Securities or for any failure to notify the Company of any such
         matters whether or not any such failure is caused or contributed to by
         any negligence on the part of the Bank or any servant or agent of the
         Bank.

(e)      Upon the discharge of this Debenture, the Company shall, if the Bank so
         requires, accept, in place of any Specifically Charged Security, a
         security of the same class and denomination in the capital of, or
         issued by, the same person.

(17)     Uncalled capital

The Company shall, upon the written request of the Bank for the time being and
from time to time, call up any uncalled capital for the time being and from time
to time of the Company. The Company shall not call up any such uncalled capital
without the prior written consent of the Bank.

(18)     Secured loan capital

The Company shall not, without the prior written consent of the Bank, issue or
re-issue any bonds, debentures, loan stocks, notes or other debt securities for
the time being and from time to time secured by any interest by way of security
for the time being and from time to time ranking in point of priority to the
security hereby constituted or any Land Charge.

(19)     Intellectual Property

The Company shall make, effect and renew all such filings and registrations and
pay all such fees as for the time being and from time to time may be necessary
or advisable or as for the time being and from time to time shall be required by
the Bank to create, perfect or preserve the Intellectual Property and/or the
security hereby constituted thereover.

<PAGE>

                                       19

(20)     Information, inspection and remedy

(a)      The Company shall furnish to the Bank forthwith upon the same becoming
         available (and, in the case of audited accounts, in any event within 90
         days of the end of each of its financial years) a copy of the audited
         accounts of the Company and of each of its subsidiaries for the time
         being and from time to time certified by a Chartered Accountant
         approved by the Bank together with the trading accounts and the
         directors' and auditors' reports thereon and each other document for
         the time being and from time to time despatched to the members of the
         Company and each such subsidiary and the Company shall also furnish to
         the Bank within 10 days of the end of each quarter unadudited financial
         statements of the Company and of each of its subsidiaries for the time
         being and from time to time and the Company shall also furnish to the
         Bank, as the Bank may from time to time request, such other financial
         statements, information, valuations and certificates regarding the
         Company and/or such subsidiaries and their respective affairs,
         financial conditions, assets and liabilities.

(b)      The Company shall keep, and procure that its subsidiaries for the time
         being and from time to time shall keep, proper books and records at all
         times.

(c)      The Company shall, upon request from time to time by the Bank or its
         agents, permit the Bank and/or its agents and/or their respective
         advisers and employees to enter into and/or inspect the Charged Assets
         and to carry out, at the Company's cost, any obligation of the Company
         to the Bank under these presents which the Bank, in its absolute
         discretion, considers necessary or advisable for the purpose of
         preserving the value of the security hereby constituted without the
         Bank or any other such person becoming liable as mortgagee in
         possession and provided that the Bank shall not be obliged under these
         presents to have any such inspection or obligation carried out.

(d)      The Company hereby permits any Account Bank and any other bank or
         financial institution with whom the Company may for the time being and
         from time to time have a banker customer relationship to furnish
         directly to the Bank from time to time upon request full statements and
         particulars of all the Company's accounts with that Account Bank and
         such other information regarding the Company, its affairs, financial
         condition, assets and liabilities as may for the time being and from
         time to time be available to that Account Bank or such other bank or
         financial institution.

(21)     Disposal of Specifically Charged Assets and other Charged Assets

The Company shall not and shall not agree to, save with the prior written
consent of the Bank or in pursuance of any other obligation under or pursuant to
these presents, sell, transfer or otherwise dispose of any of the Specifically
Charged Assets or, save in the ordinary and usual course of its trade, the whole
or any material part of its business, undertaking or any of the other Charged
Assets (other than the Specifically Charged Assets).

<PAGE>

                                       20

(22)     Conduct of business

The Company shall carry on and conduct and procure that its subsidiaries for the
time being and from time to time shall carry on and conduct its and their
respective businesses and affairs in a proper and efficient manner and shall
not, without the prior written consent of the Bank, make any substantial
alteration in the nature of such businesses.

(23)     Insolvency

(a)      The Company shall give at least seven days' prior written notice to the
         Bank of:-

         (i)      any steps for the time being and from time to time taken with
                  regard to a proposal for a composition or scheme of
                  arrangement in respect of the Company;

         (ii)     any invitation for the time being and from time to time made
                  to any other mortgagee or chargee of the Charged Assets to
                  appoint a receiver;

         (iii)    any steps for the time being and from time to time taken with
                  regard to the winding-up of the Company; and

         (iv)     any event or circumstance analogous to or having substantially
                  similar effect to any of the events and circumstances
                  described in the foregoing Sub-clauses of this Sub-clause (a)
                  under the laws of any applicable jurisdictions.

(b)      The Company shall forthwith notify the Bank in writing of and supply
         the Bank with copies of all documentation and other details relating
         to:-

         (i)      any proposal or application described in Sub-clause (a)(i);

         (ii)     any demand for the time being and from time to time made for
                  payment or the appointment of a receiver by any other
                  mortgagee or chargee for the time being and from time to time
                  of the Charged Assets;

         (iii)    any petition for the time being and from time to time made for
                  the winding-up of the Company;

         (iv)     any demand for the time being and from time to time made on
                  the Company within the meaning of Section 95 of The Companies
                  Law (2002 Revision); and

         (v)      any event or circumstances analogous to or having
                  substantially similar effect to any of the events and
                  circumstances described in the foregoing Sub-clauses of this
                  Sub-clause (b) under the laws of any applicable jurisdictions.

6.       EVENTS OF DEFAULT

<PAGE>

                                       21

(1)      In respect of any Indebtedness by virtue of the Agreement to be paid or
         discharged otherwise than on demand, the Bank shall nevertheless be
         entitled by notice to the Company to demand the immediate payment and
         discharge thereof (or any part thereof) together with all interest then
         accrued thereon forthwith (or otherwise as the Bank may require) at any
         time after the happening of any of the events referred to in Section
         17.1 Events of Default in the Agreement which Events of Default shall
         constitute Events of Default hereunder.

(2)      If any of the events described in Sub-clause (1) shall occur, the Bank
         shall be under no obligation to advance any monies or provide or
         continue to provide any credit facility to the Company, unless the
         Agreement shall expressly refer to this Sub-clause (2) and expressly
         negative its effect.

(3)      Upon any demand being made for payment of the Indebtedness pursuant to
         Sub-clause (1), such Indebtedness shall become payable immediately and
         all rights of the Company to deal for any purpose whatsoever with the
         Charged Assets shall forthwith cease and any floating charge for the
         time being and from time to time included in the security hereby
         constituted shall forthwith crystallize and become a specific charge.

(4)      Notwithstanding the Agreement, the Indebtedness shall become
immediately payable (and without the necessity for any demand to be made by the
Bank) together with all interest then accrued thereon and all rights of the
Company to deal for any purpose whatsoever with any of the Charged Assets shall
forthwith cease and any floating charge for the time being and from time to time
included in the security hereby constituted shall forthwith crystallize and
become a specific charge, on the happening of any of the following events:-

         (a)      if a petition shall be presented (and shall not be dismissed
                  within seven days) to, or an order shall be made by, any court
                  of competent jurisdiction for, or an effective resolution
                  shall be passed for, or any other steps shall be taken by the
                  Company or a Guarantor or any other person entitled so to do,
                  for the liquidation, winding-up (other than a members'
                  voluntary winding-up) or dissolution of the Company or a
                  Guarantor or the appointment of a receiver, trustee or similar
                  officer of the Company or a Guarantor or any of their
                  respective assets for the time being and from time to time;

         (b)      if all or a substantial part of the operations of the Company
                  shall cease or be suspended or the Company shall threaten that
                  such shall occur;

         (c)      if the Company, without the prior written consent of the Bank
                  or otherwise than in pursuance of the Company's obligations
                  under or pursuant to, or as expressly permitted by, these
                  presents, shall sell, transfer, lease or otherwise dispose of
                  or deal with any of the Charged Assets or purport so to do; or

<PAGE>

                                       22

         (d)      if any event or circumstances shall occur analogous to or
                  having substantially similar effect to any of the events and
                  circumstances described in Sub-clause (a) under the laws of
                  any applicable jurisdictions.

7.       APPOINTMENT OF RECEIVER AND POWER OF SALE

(1)      Time

In the circumstances described in Clause 3.2(1) (assets in jeopardy) or at any
time after the Indebtedness shall have become payable in accordance with the
Agreement or these presents or at the request of the Company, the Bank may
without further notice (and whether or not the Company shall have been accorded
sufficient or any time in which to satisfy such Indebtedness) from time to time
appoint in writing (under the hand of any manager of the Bank) a Receiver of the
Non-Realty Charged Assets (but, in the circumstances described in Clause 3.2(1),
only over the Charged Assets specified in the notice referred to in that Clause)
upon such terms as the Bank may from time to time think fit.

(2)      Power of Sale and Enforcement

At any time after the Indebtedness shall have become payable in accordance with
the Agreement or these presents or the Bank shall have appointed a Receiver
(otherwise than in the circumstances described in Clause 3.2(1) (assets in
jeopardy)), the security hereby constituted shall become immediately enforceable
and the power of sale and other powers conferred by law as varied or extended by
these presents and all other powers conferred on the Bank by these presents
shall become immediately exercisable.

(3)      Removal of Receiver

The Bank may remove any Receiver for the time being appointed by it from the
Charged Assets in respect of which that Receiver shall have been appointed and
may from time to time appoint a new Receiver over those Charged Assets.

(4)      Receiver's Powers

Every Receiver shall be the agent of the Company (which shall be solely
responsible for his contracts, engagements, acts, defaults, omissions and
losses, for liabilities incurred by him, for his misconduct and for his
remuneration) unless and until a liquidator shall be appointed of the Company,
whereafter such Receiver shall act as principal but shall not become the agent
of the Bank, and, at all times, such Receiver shall have and be entitled to
exercise in relation to the Company all the powers conferred on receivers by law
and also (but without thereby limited those powers by law and without prejudice
to the Receiver's powers, authorities and discretions conferred

<PAGE>

                                       23

by these presents) such Receiver may, without further notice, exercise all or
any of the following powers:-

         (a)      to take immediate possession of, get in, and/or collect the
                  Non-Realty Charged Assets and, for that purpose, to enter upon
                  the Immoveable Property or any other premises at which the
                  Non-Realty Charged Assets are for the time being and from time
                  to time located and sever, dismantle or remove the same or any
                  fixtures for the time being and from time to time therefrom
                  without being liable for any loss or damage thereby
                  occasioned;

         (b)      to carry on, manage or concur in the carrying on or managing
                  of, the business for the time being and from time to time of
                  the Company in such manner as he may think fit, including (but
                  without limitation) power to perform, repudiate, rescind,
                  compromise, amend or vary any contract, instrument or
                  agreement to which the Company shall for the time being and
                  from time to time be a party;

         (c)      to sell, exchange or concur in the sale or exchange of the
                  Non-Realty Charged Assets;

         (d)      to grant, or concur in the grant of, any leases or licences of
                  the Non-Realty Charged Assets;

         (e)      to grant, or concur in the granting of, any renewals or
                  surrenders of, or to accept, or concur in the accepting of,
                  any surrenders of, any leases or licences for the time being
                  and from time to time of the Non-Realty Charged Assets;

         (f)      to promote, or concur in the promotion of, the formation of a
                  subsidiary and/or subsidiaries of the Company with a view to
                  the same purchasing, leasing, licensing or otherwise acquiring
                  all or any of the assets for the time being and from time to
                  time of the Company;

         (g)      to make and effect, and concur in the making and effecting of,
                  all such repairs, maintenance, decoration, provision of all
                  services (including, but without limitation, lighting, heating
                  and cleansing) structural and other alterations, improvements,
                  additions and development in or to the Non-Realty Charged
                  Assets and do anything else in connection with the Non-Realty
                  Charged Assets which he may think fit or which he may deem
                  proper for the efficient use or management of the Non-Realty
                  Charged Assets, as well as for the protection or for the
                  improvement of the Non-Realty Charged Assets or for the
                  protection of the security hereby constituted;

         (h)      to exercise or permit the Company or any nominee of the
                  Company to exercise any powers or rights incidental to the
                  ownership of the Non-Realty Charged Assets in such manner as
                  the Receiver may think fit and, in particular (as regards any
                  shares, stock or other securities for the time being and from
                  time to time included in the

<PAGE>

                                       24

                  Non-Realty Charged Assets) any rights for the time being and
                  from time to time attached thereto;

         (i)      to call up all or any portion of any uncalled capital for the
                  time being and from time to time of the Company;

         (j)      to redeem any interest by way of security for the time being
                  and from time to time ranking in point of security in priority
                  to any of the security hereby constituted and to settle and
                  prove the accounts of the holder of any such interest and any
                  monies paid by way of such redemption shall be an expense of
                  the Receiver's receivership;

         (k)      to settle, adjust, refer to arbitration and compromise any
                  claims, accounts, disputes, questions and demands for the time
                  being and from time to time with or by any person who for the
                  time being and from time to time is, or claims to be, a
                  creditor of the Company or relating in any way to the
                  Non-Realty Charged Assets;

         (l)      to bring, prosecute, enforce, defend and abandon any actions,
                  suits and proceedings in relation to the Company or the
                  Non-Realty Charged Assets;

         (m)      to appoint, hire or employ and to remunerate managers,
                  officers, agents, accountants, clerks, servants, workmen and
                  others on such terms and generally in such manner as the
                  Receiver shall think fit, either in connection with any
                  exercise by the Receiver of his powers by or pursuant to these
                  presents or otherwise for any purpose connected with the
                  Non-Realty Charged Assets, and to discharge any such person;

         (n)      to appoint a solicitor or accountant or other professionally
                  qualified person to advise or assist it in the exercise of any
                  of the powers, authorities and discretions by or pursuant to
                  these presents or otherwise for any purpose connected with the
                  Non-Realty Charged Assets, and to discharge any such person;

         (o)      for the purpose of exercising any of the powers, authorities
                  and discretions conferred on the Receiver by or pursuant to
                  these presents and/or defraying any costs, charges, losses or
                  expenses (including his remuneration) which shall for the time
                  being and from time to time be incurred by him in the exercise
                  thereof or for any other purpose, to make advances or to raise
                  or borrow money either unsecured or secured on the Non-Realty
                  Charged Assets ranking in point of security in priority to,
                  pari passu with, or subsequent to, the security hereby
                  constituted or otherwise and at such rate or rates of interest
                  and generally on such terms and conditions as the Receiver
                  may, in his absolute discretion, think fit;

         (p)      to give valid receipts for all monies and to execute all deeds
                  or documents (including, but without limitation, with full
                  power to convey any assets sold in the name of the Company) as
                  may be necessary or appropriate in the name of, or on

<PAGE>

                                       25

                  behalf of the Company for the purpose of exercising any of the
                  powers, authorities and discretions conferred on the Receiver
                  by or pursuant to these presents and to use the name of the
                  Company for all or any of such powers, authorities and
                  discretions, for which purpose the Company hereby irrevocably
                  appoints every such Receiver to be its attorney; and

         (q)      to do all such other acts, deeds and things as the Receiver
                  may consider necessary or desirable for the realisation of the
                  Non-Realty Charged Assets or as the Receiver may consider
                  incidental or conducive to any of the powers, authorities and
                  discretions conferred on him by or pursuant to these presents,
                  and to do and exercise, in relation to the Non-Realty Charged
                  Assets, all such acts, deeds and things and all such powers,
                  authorities and discretions as the Receiver would be capable
                  of doing and exercising if he were the absolute beneficial
                  owner of the Non-Realty Charged Assets.

(5)      Exercise of Receiver's powers

In the exercise of any of the powers, authorities and discretions conferred on a
Receiver by or pursuant to these presents in relation to any dealing whatsoever
with the Non-Realty Charged Assets, the Receiver:-

(a)      may agree such terms and conditions relating thereto and such
         consideration therefor; and

(b)      may dispose of the Non-Realty Charged Assets in such manner (including,
         but without limitation, by public auction, tender or private treaty)
         and with or without such advertisement and in such lot or lots and
         together or separately;

as the Receiver shall, in his absolute discretion, think fit.

(6)      Immoveable Property

The enforcement of the security constituted by a Land Charge shall be governed
by The Registered Land Law (1995 Revision) as varied and/or added to by the Land
Charge.

8.       RESPONSIBILITY FOR RECEIVER

(1)      Liability of Bank

The Bank shall not incur any liability, either to the Company or to any other
person whomsoever, in respect of any contracts, engagements, acts, omissions,
defaults or losses of any Receiver or for any liabilities incurred by him, for
any misconduct by him or for his remuneration, by reason of the Bank having
appointed him or of the Bank having made or given any direction, either
generally or

<PAGE>

                                       26

specifically, to him or having concurred in any such contract, engagement, act,
omission, default, loss or liability for any other reason whatsoever.

(2)      Remuneration

The Bank may, from time to time, fix the remuneration of any Receiver and direct
payment of the same out of monies accruing to him in the exercise of his powers,
authorities and discretions by or pursuant to these presents, but the Company
alone shall be liable for the payment of that remuneration.

9.       ADDITIONAL POWERS OF THE BANK

(1)      As Mortgagee

The powers, authorities and discretions conferred by or pursuant to these
presents in relation to the Non-Realty Charged Assets on the Bank or any
Receiver shall be in addition to, and not in substitution for, the powers
conferred on mortgagees or receivers by law and, where there is any ambiguity or
conflict between the powers, authorities and discretions conferred by law and
those conferred by or pursuant to these presents, the terms of these presents
shall prevail.

(2)      As Receiver

All or any of the powers, authorities and discretions conferred by or pursuant
to these presents, either expressly or impliedly, upon a Receiver, may be
exercised by the Bank in relation to the Non-Realty Charged Assets without the
Bank having to first appoint a Receiver and/or notwithstanding any such
appointment.

(3)      Delegation of Powers of the Bank

The Bank may, for the time being and from time to time, delegate by power of
attorney or in any other manner (including but without limitation, under the
hand of any manager of the Bank) to any person all or any of the powers,
authorities and discretions which are, for the time being, exercisable by the
Bank under or pursuant to these presents or by law in relation to the Charged
Assets and any such delegation may be made upon and subject to such terms and
conditions (including, but without limitation, the power to sub-delegate) as the
Bank may, in its absolute discretion, think fit and the Bank shall not be liable
or responsible to the Company or any other person for any loss or damage arising
from any act, default, omission or misconduct on the part of any such delegate
(or sub-delegate).

<PAGE>

                                       27

10.      APPROPRIATION

Any monies received by the Bank or a Receiver under or pursuant to these
presents shall, subject to payment of any claims for the time being having
priority to these presents, be applied for the following purposes and in the
following order of priority:-

FIRST: in or towards satisfaction of all the Indebtedness described in Clause
2(2) together with interest on the same as described in Clause 2(3), in such
order as the Bank in its absolute discretion shall decide;

SECOND: in or towards satisfaction of all the Indebtedness described in Clause
2(1), together with interest on the same as described in Clause 2(3), in such
order as the Bank in its absolute discretion shall decide; and

LAST: the surplus (if any) shall be paid to the person or persons for the time
being entitled thereto.

11.      LIABILITY OF THE BANK AND RECEIVER

(1)      General

If the Bank or any Receiver or Delegate shall enter into possession of the
Charged Assets, the Bank or any of them may, from time to time at will, go out
of such possession.

(2)      Exclusion of the Bank's liability

The Bank shall not, in any circumstances, either by reason of any entry by it
into, or taking by it of possession of, the Charged Assets or for any other
reason whatsoever and whether as mortgagee in possession or on any other basis
whatsoever, be liable to account to the Company for anything except the Bank's
own actual receipts or be liable to the Company or any other person for any loss
or damage arising from any realisation by the Bank of the Charged Assets or from
any act, default or omission of the Bank in relation to the Charged Assets or
from any exercise or non-exercise by the Bank of any power, authority or
discretion conferred upon it by or pursuant to these presents, any Land Charge
or by law.

(3)      Exclusion of Receiver's liability

All the provisions of Sub-clause (2) shall apply in respect of the liability of
any Receiver or Delegate in all respects as though every reference in that
Sub-clause to the Bank were also a reference to such Receiver or, as the case
may be, such Delegate.

<PAGE>

                                       28

(4)      Indemnity

The Bank and every Receiver and Delegate shall be entitled to be indemnified out
of the Non-Realty Charged Assets in respect of all liabilities and expenses for
the time being and from time to time incurred by any of them in the execution or
purported execution of any of the powers, authorities and discretions conferred
on them by or pursuant to these presents or by law and against all actions,
proceedings, costs, claims and demands in respect of any matter or thing done or
omitted in any way relating to the Charged Assets and the Bank and every
Receiver may retain and pay all sums in respect of the same out of any monies
received under such powers, authorities and discretions.


12.      POWER OF ATTORNEY

(1)      Appointment

The Company hereby, by way of security, irrevocably appoints the Bank and every
Receiver and Delegate severally to be its attorney and on its behalf and in its
name or otherwise to execute and do all such acts, deeds and things which the
Company ought to do under these presents and generally, on its behalf and in its
name, to exercise all or any of the powers, authorities and discretions
conferred by or pursuant to these presents or by law on the Bank or any Receiver
or Delegate.

(2)      Ratification

The Company hereby ratifies and confirms and agrees to ratify and confirm
whatever any attorney of the Company appointed by these presents shall do or
purport to do in the exercise or purported exercise of all or any of the powers,
authorities and discretions granted to such attorney by these presents.

13.      FURTHER ASSURANCE

The Company shall from time to time execute and do all such acts, deeds and
things as the Bank may reasonably require for perfecting or better perfecting or
protecting or better protecting the security hereby constituted or constituted
by any Land Charge and, after the Indebtedness shall have become payable, for
facilitating the realisation of the Charged Assets and for exercising all
powers, authorities and discretions conferred by or pursuant to these presents,
any Land Charges or by law on the Bank or any Receiver or Delegate or any
receiver under a Land Charge and shall, in particular (but without limitation)
execute and deliver all interests by way of security, transfers, conveyances,
assignments and assurances and give all notices and other communications which
the Bank shall for the time being, think expedient.

<PAGE>

                                       29

14.      PROTECTION FOR THIRD PARTY PURCHASERS

(1)      No purchaser, mortgagee or other person dealing with the Bank or any
         Receiver or Delegate shall be concerned to enquire whether the
         Indebtedness shall have become payable or whether any power, authority
         or discretion which the Bank or a Receiver or Delegate is purporting to
         exercise shall have become exercisable or shall be being properly
         exercised or to see to the application of any monies paid to the Bank
         or a Receiver or Delegate.

(2)      Without prejudice to Sub-clause (1) and in addition to all other
         protection for the time being afforded by law, any purchaser, mortgagee
         or other person dealing with the Bank or any Receiver or Delegate shall
         be entitled and bound to assume without enquiry that the security
         hereby constituted shall have become enforceable.

15.      CONTINUING SECURITY AND AVOIDANCE OF PAYMENTS

(1)      The Security hereby constituted shall be a continuing security and
         shall not be satisfied or discharged by any intermediate payment or
         satisfaction of the Indebtedness.

(2)      No assurance, security or payment which may be avoided under any
         enactment relating to bankruptcy or insolvency or under The Fraudulent
         Dispositions Law, (1996 Revision) (or similar legislation binding on
         the Company in a jurisdiction other than The Cayman Islands), and no
         release, settlement or discharge given or made by the Bank on the faith
         of any such assurance, security or payment, shall prejudice or affect
         the right of such persons to enforce the security hereby constituted or
         any Land Charge.

16.      ADDITIONAL SECURITY, SUSPENSE ACCOUNT AND CONSOLIDATION

(1)      The security hereby constituted shall be in addition to, and shall not
         prejudice, or be prejudiced by, any other interest by way of security,
         right or remedy which the Bank may for the time being and from time to
         time enjoy in respect of the Indebtedness.

(2)      The Bank may, in its absolute discretion, grant time or other
         indulgence or make or grant any other arrangement, variation or release
         to or with any person (and whether or not such person is jointly and/or
         severally liable to the Bank with the Company) in respect of the
         Indebtedness or in respect of any other interest by way of security or
         guarantee therefor, without prejudice either to the security hereby
         constituted or to the liability of the Company for the Indebtedness.

(3)      Any monies received under or pursuant to these presents may be placed
         and kept to the credit of one or more than one suspense accounts with
         the Bank for so long as the Bank may think fit and, notwithstanding the
         other provisions of these presents, without any obligation in the
         meantime to apply the same or any part thereof or interest accruing
         thereon in or

<PAGE>

                                       30

         towards discharge of any of the Indebtedness and, notwithstanding any
         such payment, in the event of any liquidation or winding-up of the
         Company, the Bank may prove for and agree to accept any dividend or
         composition in respect of the whole or any part of the Indebtedness as
         if this Debenture had not been executed and delivered.

(4)      The Bank shall have the right (but not the obligation) exercisable in
         its sole and absolute discretion to consolidate this Debenture with any
         collateral, additional or supplemental interests by way of security
         hereto notwithstanding any provision of any law to the contrary.

17.      NEW ACCOUNT

If the Bank receives notice (whether actual or otherwise) of any interest by way
of security (other than the security hereby constituted) affecting the Charged
Assets, the Bank may forthwith open a new account or accounts for the Company
and, if the Bank does not open a new account, the Bank shall nevertheless be
treated as if it had done so at the time of receipt of such notice and, as from
that time, all monies paid by the Company to the Bank or received by the Bank
for the account of the Company shall be credited and be treated as having been
credited to such new account and shall not operate to reduce the amount due to
the Bank by the Company at the time of receipt of such notice and, furthermore,
the Bank shall be under no obligation to advance any monies or provide or
continue to provide any credit facility to the Company.

18.      SET-OFF

Until this Debenture shall be discharged and notwithstanding any provision of
the Agreement to the contrary (unless the Agreement shall expressly refer to,
and shall negative the effect of, this Clause 18, and in addition to and without
prejudice to Clause 3.1(3) and the interests by way of security constituted
thereby,) it is and shall be a term of each contract relating to each debt
constituted by a credit balance for the time being and from time to time on any
account(s) for the time being and from time to time opened with the Bank at any
of its branches in the name of the Company or to which the Company is
beneficially entitled, together with interest for the time being and from time
to time accrued thereon (all such debts and interest being referred to in this
Clause 18 as the "Balances") or any part thereof shall not be payable or
repayable by the Bank to the Company to the extent that the aggregate amount of
the Balances at any time shall not exceed the Indebtedness, and the Bank may
(but shall not be obliged to) for the time being and from time to time, without
notice to the Company and in addition to any lien or other right to which the
Bank may for the time being be and from time to time entitled by law:-

         (1)      retain the Balances or any part thereof to the extent of the
                  Indebtedness;

         (2)      set off, transfer and/or apply the Balances or any part
                  thereof, together with other sums (if any) for the time being
                  and from time to time owing to the Company and in

<PAGE>

                                       31

                  the hands of the Bank, in or towards payment or satisfaction
                  of the Indebtedness and, if the Bank shall so decide, to
                  purchase out of the Balances such other currencies at the
                  Bank's usual spot rate for the time being as may be necessary
                  to effect such set-off, transfer or application;

         (3)      combine or consolidate all or any of the accounts of the
                  Company with the Bank at any of the branches of the Bank;
                  and/or;

         (4)      refuse payment of any cheque, bill, note, order or notice of
                  withdrawal drawn or made by the Company or upon which the Bank
                  may be otherwise liable and which if paid or complied with
                  would reduce the Balances (exclusive of interest accruing) to
                  less than the amount of the Indebtedness;

and the Bank shall not be liable for any loss to the Company by reason of the
exercise of its rights under this Clause 18 including, but without limitation,
any loss of interest on the Balances.

19.      AMALGAMATION OF BANK

These presents shall remain enforceable, valid and binding for all purposes
notwithstanding any change in the name of the Bank or its absorption of, or by,
or its amalgamation or consolidation with, any other person or any change in its
constitution or that its successors or assigns or the person by which the
business of the Bank may, for the time being and from time to time, be carried
on and shall be available to all such successors, assigns and persons.

20.      NOTICES

Any notice, demand or other communication by the Bank shall be in writing signed
by any manager of the Bank and may be served by delivering the same to the
Company or by post addressed to the Company at the Company's address last known
to the Bank or to the registered office for the time being and from time to time
of the Company and any such notice, demand or other communication so addressed
and posted shall be deemed to have been served at the expiration of forty-eight
hours after it has been posted and shall be effective notwithstanding that it be
returned as being undelivered.

21.      RIGHTS AND REMEDIES

The rights of the Bank under these presents are cumulative, may be exercised as
often as considered appropriate and are in addition to the general law and the
terms and conditions of the Agreement.

<PAGE>

                                       32

Such rights (whether arising hereunder or under the general law or the
Agreement) shall not be capable of being waived or varied otherwise than by an
express waiver or variation in writing and, in particular, any failure to
exercise or delay in exercising any of such rights shall not operate as a waiver
or variation of that or any other such right, any defective or partial exercise
of any such rights shall not preclude any other or further exercise of that or
any other such right, and no act or course of conduct or negotiation by the Bank
or on its behalf shall in any way preclude it from exercising any such right or
constitute a suspension or any variation of any such right. In the event that
there is a conflict between the terms and conditions of the Agreement and the
provisions of this Debenture, the terms and conditions of the Agreement shall
prevail, other than in respect of clause 6 (4) hereof.

22.      SEVERANCE

If at any time any one or more provisions of this Debenture is or becomes
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby.

23.      GOVERNING LAW

These presents shall be governed by, and construed in accordance with, the laws
of the Cayman Islands.

24.      JURISDICTION

The Company hereby irrevocably agrees that the courts of the Cayman Islands are
to have jurisdiction to settle any disputes which arise out of or in connection
with this Debenture and that, accordingly, any suit, action or other legal
proceedings so arising may be brought in such courts. The Company hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such legal proceedings in such courts and any claim
that any such legal proceedings have been brought in an inconvenient forum, and
further hereby irrevocably agrees that a judgment in any such legal proceedings
brought in such courts shall be conclusive and binding upon it and may be
enforced in the Courts of any other jurisdiction without re-examination of the
merits.

Nothing contained in this provision shall limit the right of the Bank to take
any such legal proceedings in any other court of competent jurisdiction; nor
shall the taking of any legal proceedings in one jurisdiction preclude the
taking of legal proceedings in another, whether concurrently or not. The Company
hereby agrees that the process by which any such legal proceedings are begun in
the Cayman Islands may be served on it by being delivered to the person (if any)
specified in Schedule 5.

<PAGE>

                                       33

25.      FURTHER ADVANCES

Each and every obligation (if any) for the time being and from time to time of
the Bank to make further advances to the Company under and in accordance with
the terms of the Agreement shall be deemed to be included in this Debenture as
if the same were set out herein in full.

26.      STAMPING

This Debenture shall at the Company's expense be impressed with stamp duty
initially to cover U.S.$ 22,000,000.00 of the Indebtedness and the Bank shall be
at liberty and is hereby empowered at any time or times hereafter (without any
such licence or consent on the part of the Company) to impress such additional
stamp duty hereon or on any collateral, supplemental or additional interests by
way of security to this Debenture all at the Company's own cost and expense as
is necessary to cover the Indebtedness.

IN WITNESS whereof this document has been executed as a deed and delivered the
day and year first above written.

                                   SCHEDULE 1

                     Description of the Immoveable Property
                         charged under Clause 3.1(1)(a)

                     West Bay Beach North Block 11D Parcels 8 and 40
                     West Bay North East Block 9A Parcels 8 and 469
                     West Bay Beach South Block 12D Parcel 79 REM 1/2

<PAGE>

                                       34

                                   SCHEDULE 2

                  Description and location of the Specifically
                                  Charged Plant

                  1.       Governor's Harbour Seawater Desalination Plant - WBBN
                                        Block 11D Parcels 8 and 40

         A seawater desalination plant constructed within a steel building ,
         utilizing reverse osmosis technology, capable of producing 1.2 million
         US gallons of potable water per day, whose primary components are :-

- -        two positive displacement pumps with a pumping capacity of 410 US
         gallons per minute each;

- -        two " back up " centrifugal pumps with a pumping capacity of 300 US
         gallons per minute each;

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

- -        a DWEER work exchanger energy recovery system;

- -        an air scrubber to remove the hydrogen sulphide from the product water,
         which is capable of scrubbing approximately 800 US gallons of water per
         minute;

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

                  2.       West Bay Seawater Desalination Plant-WBNE Block 9A
                                           Parcels 8 and 469

         A seawater desalination plant constructed within a steel building,
         utilizing reverse osmosis technology, capable of producing 710,000 US
         gallons of potable water per day, whose primary components are:-

- -        two positive displacement pumps with a pumping capacity of 386 US
         gallons per minute each;

<PAGE>

                                       35

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

- -        one hydraulic turbo energy recovery system;

- -        one DWEER work exchanger energy recovery system;

- -        an air scrubber to remove the hydrogen sulphide from the product water,
         which is capable of scrubbing 1000 US gallons of water per minute; and

- -        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.

                  3.       Britannia Seawater Desalination Plant - WBBS Block
                                         12D Parcel 79REM1/2

              A seawater desalination plant constructed within a steel building
              utilizing reverse osmosis technology, capable of producing 440,000
              US gallons of potable water per day, whose primary components
              are:-

- -        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;

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

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

*        one high service pump station used to pump water from the bolted steel
tank to the distribution pipeline

                                   SCHEDULE 3

             Description of certain Specifically Charged Securities
                         charged under Clause 3.1(3)(f)

<PAGE>

                                       36

                                   SCHEDULE 4

           Description of Bank Accounts charged under Clause 3.1(3)(p)

                                   SCHEDULE 5

              Name and address of person (if any) to accept service
                       of process on behalf of the Company

The Common Seal of                    )          Consolidated Water Co. Ltd.
Consolidated Water Co. Ltd.  ]        )
was hereunto affixed                  )          By: /s/ Jeffrey M. Parker
By:                                   )              --------------------------
And by:                               )      And By: /s/ Frederick W. McTaggart
in the presence of:                   )              --------------------------

/s/ Richard L. Finlay
- ------------------------
Witness

                                             Scotiabank (Cayman Islands) Ltd.

Signed as a Deed by                   )          By: /s/ Alan Brodie
                                 by   )              --------------------------
By:                                   )      And By: /s/
On behalf of Scotiabank (Cayman       )              --------------------------
Islands) Ltd.
In the presence of                    )

[ILLEGIBLE]
- ------------------------
Witness                                     Scotiabank/Consolidated/Sub. Deb.

<PAGE>

                                   DATED    2003

                           CONSOLIDATED WATER CO. LTD.

                                   AS COMPANY

                                     - AND -

                        SCOTIABANK (CAYMAN ISLANDS ) LTD.

                                     AS BANK

                          DEED OF SUBSTITUTED DEBENTURE

<PAGE>

                                      (i)

                                      INDEX

CLAUSES

1.       DEFINITIONS AND INTERPRETATION

2.       MONIES SECURED

         (1)      Monies

         (2)      Costs

         (3)      Interest

3.       THE CHARGES

3.1      Charging provision

                  Immoveable Property

                  Specifically Charged Plant

                  Trading Debts

                  Non-Trading Debts

                  Specifically Charged Securities

                  Goodwill and uncalled capital

                  Intellectual Property

                  Ancillary assets

                  Bank Accounts

                  Other assets

3.2      Crystallisation of floating charge

3.3      Negative pledge

3.4      Land Charges

<PAGE>

                                      (ii)

4.       REPRESENTATIONS & WARRANTIES

5.       COVENANTS

         (1)      Documents of title to Immoveable Property and Specifically
                  Charged Plant and Securities

         (2)      Further charges

         (3)      Future Immoveable Property and Specifically Charged Plant and
                  Securities

         (4)      Maintenance

         (5)      Insurance

         (6)      Registration under The Registered Land Law

         (7)      Notices affecting Immoveable Property or Specifically Charged
                  Plant

         (8)      Planning Legislation

         (9)      Other compliance with law

         (10)     Compliance with contracts

         (11)     Leases or licences of Immoveable Property and Intellectual
                  Property: as lessee or Licensee

         (12)     Leases of licences of Immoveable Property and Intellectual
                  Property; as lessor or licensor

         (13)     Removal and severance

         (14)     Specifically Charged Plant

<PAGE>

                                     (iii)

         (15)     Debts and Bank Accounts

         (16)     Specifically Charged Securities

         (17)     Uncalled capital

         (18)     Secured loan capital

         (19)     Intellectual Property

         (20)     Information, inspection and remedy

         (21)     Disposal of Specifically Charged Assets and other Charged
                  Assets

         (22)     Conduct of business

         (23)     Insolvency

6.       EVENTS OF DEFAULT

7.       APPOINTMENT OF RECEIVER AND POWER OF SALE

         (1)      Time

         (2)      Power of Sale and Enforcement

         (3)      Removal of Receiver

         (4)      Receiver's Powers

         (5)      Exercise of Receiver's Powers

         (6)      Immoveable Property

8.       RESPONSIBILITY FOR RECEIVER

         (1)      Liability of Bank

         (2)      Remuneration

<PAGE>

                                      (iv)

9.       ADDITIONAL POWERS OF THE BANK

         (1)      As Mortgagee

         (2)      As Receiver

         (3)      Delegation of powers of the Bank

10.      APPROPRIATION

11.      LIABILITY OF THE BANK AND RECEIVER

         (1)      General

         (2)      Exclusion of the Bank's liability

         (3)      Exclusion of Receiver's liability

         (4)      Indemnity

12.      POWER OF ATTORNEY

         (1)      Appointment

         (2)      Ratification

13.      FURTHER ASSURANCE

14.      PROTECTION FOR THIRD PARTY PURCHASERS

15.      CONTINUING SECURITY AND AVOIDANCE OF PAYMENTS

16.      ADDITIONAL SECURITY, SUSPENSE ACCOUNT AND CONSOLIDATION

17.      NEW ACCOUNT

<PAGE>

                                      (v)

18.      SET-OFF

19.      AMALGAMATION OF BANK

20.      NOTICES

21.      RIGHTS AND REMEDIES

22.      SEVERANCE

23.      GOVERNING LAW

24.      JURISDICTION

25.      FURTHER ADVANCES

26.      STAMPING

SCHEDULE 1       Description of the Immovable
                 Property charged under Clause
                 3.1(1)(a)

SCHEDULE 2       Description and location
                 of Specifically Charged Plant

SCHEDULE 3       Description of certain
                 Specifically Charged Securities
                 charged under Clause 3.1(3)(f)

SCHEDULE 4       Description of the Bank Accounts charged under Clause 3.1(3)(p)

<PAGE>

                                      (vi)

SCHEDULE 5       Name and address of person (if
                 any) to accept service of process
                 on behalf of Company

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>28
<FILENAME>g80228exv23w1.txt
<DESCRIPTION>CONSENT OF KPMG CHARTERED ACCOUNTANTS
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1


KPMG [LOGO]

Chartered Accountants

P.O. Box 493 GT, Century Yard  Telephone: -1 345 949-4800   E-Mail kpmg@kpmg.ky
Grand Cayman, Cayman Islands   Telefax:   -1 345 949-7164   website: www.kpmg.ky





                       CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation of our report dated March 18, 2003 with respect
to the consolidated balance sheets of Consolidated Water Co. Ltd. as of December
31, 2002 and 2001, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 2002, included herein and to the reference to our firm
under the heading "Experts" in the registration statement.



/s/ KPMG
- ---------------------


Cayman Islands
April 29, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>29
<FILENAME>g80228exv23w2.txt
<DESCRIPTION>CONSENT OF DELOITTE & TOUCHE
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2


Deloitte & Touche
One Capital Plaza
P.O. Box 1787 GT
Grand Cayman
Cayman Islands

Tel: 1 (345) 949 7599
Fax: 1 (345) 949 8238
mail@deloitte.com.ky
www.deloitte.com.ky                                     [DELOITTE & TOUCHE LOGO]



INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Consolidated Water Co.
Ltd. on Form F-2 of our report dated April 16, 2003 for the combined financial
statements of DesalCo Limited, Ocean Conversion (Cayman) Limited, and Ocean
Conversion (BVI) Ltd., appearing in the Prospectus, which is part of this
Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.


/s/ Deloitte & Touche
- ---------------------------

George Town, Cayman Islands

April 28, 2003

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>30
<FILENAME>g80228exv23w3.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.3


[PRICEWATERHOUSECOOPERS LOGO]

                                                          PricewaterhouseCoopers
                                                          P.O. Box N 3910
                                                          Providence House
                                                          Last Hill Street
                                                          Nassau, The Bahamas
                                                          Telephone 242-302-5300
                                                          Facsimile 242-302-5750





CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form F-2 of our
report dated April 9, 2003, relating to the financial statements of Waterfields
Company Limited, which appear in such Registration Statement. We also consent to
the references to us under the headings "Experts" and in such Registration
Statement.


PRICEWATERHOUSECOOPERS




/s/  PricewaterhouseCoopers
- ------------------------------------

Nassau, The Bahamas
April 30, 2003

</TEXT>
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`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
