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<SEC-DOCUMENT>0000950144-04-003858.txt : 20040414
<SEC-HEADER>0000950144-04-003858.hdr.sgml : 20040414
<ACCEPTANCE-DATETIME>20040414155729
ACCESSION NUMBER:		0000950144-04-003858
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		31
CONFORMED PERIOD OF REPORT:	20031231
FILED AS OF DATE:		20040414

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:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-25248
		FILM NUMBER:		04733141

	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>10-K
<SEQUENCE>1
<FILENAME>g88198e10vk.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="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 14pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

<P align="center" style="font-size: 18pt"><B>FORM 10-K</B>


<P align="left" style="font-size: 10pt"><B>(Mark One)</B>



<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" style="font-size: 12pt">
<TR>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD><B>[X]</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="margin-left:10%; font-size: 10pt">For the fiscal year ended <B>December&nbsp;31, 2003</B>


<P align="center" style="font-size: 10pt"><B>OR</B>


<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="90%" style="font-size: 12pt">
<TR>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="95%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD><B>[&nbsp;&nbsp;&nbsp;]</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="margin-left:10%; font-size: 10pt">For the transaction period from <U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U> to <U>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</U>


<P align="center" style="font-size: 10pt">Commission File Number: <B>0-25248</B>


<P align="center" style="font-size: 24pt"><B>CONSOLIDATED WATER CO. LTD.<BR>
<HR size="1" noshade width="65%" align="center"></B>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>CAYMAN ISLANDS</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>N/A</B></TD>
</TR>

<TR style="font-size: 1px">
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>Trafalgar Place, West Bay Road, P.O.
Box<BR>1114GT, Grand Cayman, B.W.I.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;<BR>
<B>N/A</B></TD>
</TR>

<TR style="font-size: 1px">
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Registrant&#146;s Telephone number, including area code: <B>(345)&nbsp;945-4277</B>



<P align="left" style="font-size: 10pt">Securities registered pursuant to Section&nbsp;12(b) of the Act: <B>None</B>



<P align="left" style="font-size: 10pt">Securities registered pursuant to Section&nbsp;12(g) of the Act:



<P align="center" style="font-size: 10pt"><B>ORDINARY SHARES, PAR VALUE CI$1.00</B><BR>
<HR size="1" noshade width="45%" align="center">


<DIV align="center" style="font-size: 10pt">(Title of Class)</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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


<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports
required to be filed by Section&nbsp;13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12&nbsp;months (or for such shorter period that the
registrant was required to file such reports), and (2)&nbsp;has been subject to such
filing requirements for the past 90&nbsp;days.<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Yes <B>[X]</B>&nbsp;&nbsp;No [&nbsp;&nbsp;&nbsp;]


<P align="left" style="font-size: 10pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405
of Regulation&nbsp;S-K is not contained herein, and will not be contained, to the
best of registrant&#146;s knowledge, in definitive proxy or information statements
incorporated by reference in Part&nbsp;III of this 10-K or any amendments to this
Form 10-K. &#091;<B>Not Applicable</B>&#093;


<P align="left" style="font-size: 10pt">Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule&nbsp;12b-2 of the Act. Yes [&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;No <B>[X]</B>

<P align="left" style="font-size: 10pt">The aggregate market value of common stock held by non-affiliates of the
registrant, based on the closing sales price for the registrant&#146;s ordinary
shares, as reported on the Nasdaq National Market on March&nbsp;29, 2004<I>, </I>was
$107,861,186.


<P align="left" style="font-size: 10pt">As at March&nbsp;29, 2004<B><I>, </I></B>there were 5,746,467 shares of the registrant&#146;s ordinary
shares outstanding.



<P align="center" style="font-size: 10pt"><B>DOCUMENTS INCORPORATED BY REFERENCE</B>



<P align="left" style="font-size: 10pt"><B>None</B>



<P align="left" style="font-size: 10pt"><B>EXCHANGE RATES</B>


<P align="left" style="font-size: 10pt">Unless otherwise indicated, all dollar amounts are in United States Dollars and
references to &#147;$&#148;, &#147;U.S.&#148;, or &#147;U.S.$&#148; are to United States Dollars.


<P align="left" style="font-size: 10pt">The official fixed exchange rate for conversion of CI$ into U.S.$, as
determined by the Cayman Islands Monetary Authority, has been fixed since April
1974 at U.S. $1.20 per CI$1.00.


<P align="left" style="font-size: 10pt">The official fixed exchange rate for conversion of BZE$ into U.S.$, as
determined by the Central Bank of Belize, has been fixed since 1976 at U.S.$
0.50 per BZE$ 1.00.


<P align="left" style="font-size: 10pt">The official fixed exchange rate for conversion of BAH$ into U.S.$, as
determined by the Central Bank of The Bahamas, has been fixed since 1973 at
U.S.$ 1.00 per BAH$ 1.00.


<P align="left" style="font-size: 10pt">The official fixed exchange rate for conversation of BDS$ into U.S.$ as
determined by the Central Bank of Barbados has been fixed since 1975 at U.S.$
0.50 = BDS$ 1.00.


<P align="left" style="font-size: 10pt">The British Virgin Islands&#146; currency is U.S.$.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Section</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#101">PART I</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#102">&nbsp;&nbsp;&nbsp;Item&nbsp;1.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#102">Business
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#103">&nbsp;&nbsp;&nbsp;Item&nbsp;2.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#103">Properties
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#104">&nbsp;&nbsp;&nbsp;Item&nbsp;3.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#104">Legal Proceedings
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#105">&nbsp;&nbsp;&nbsp;Item&nbsp;4
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#105">Submission of Matters to a Vote of Security Holders
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">23</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#106">PART II</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#107">&nbsp;&nbsp;&nbsp;Item&nbsp;5.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#107">Market for Registrant&#146;s Common Equity and Related Stockholder Matters
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">24</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#108">&nbsp;&nbsp;&nbsp;Item&nbsp;6.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#108">Selected Financial Data
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">26</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#109">&nbsp;&nbsp;&nbsp;Item&nbsp;7.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#109">Management&#146;s Discussions and Analysis of Financial Condition and
Results of Operations
</A></TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">27</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#110">&nbsp;&nbsp;&nbsp;Item&nbsp;7A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#110">Quantitative and Qualitative Disclosure about Market Risk
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">44</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#111">&nbsp;&nbsp;&nbsp;Item&nbsp;8.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#111">Financial Statements and Supplementary Data
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#112">&nbsp;&nbsp;&nbsp;Item&nbsp;9.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#112">Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">84</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#113">&nbsp;&nbsp;&nbsp;Item&nbsp;9A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#113">Controls and Procedures
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">84</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#114">PART III</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#115">&nbsp;&nbsp;&nbsp;Item&nbsp;10.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#115">Directors and Executive Officers of the Registrant
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">85</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#116">&nbsp;&nbsp;&nbsp;Item&nbsp;11.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#116">Executive Compensation
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">91</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#117">&nbsp;&nbsp;&nbsp;Item&nbsp;12.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#117">Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">99</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#118">&nbsp;&nbsp;&nbsp;Item&nbsp;13.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#118">Certain Relationships and Related Transactions
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">102</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#119">&nbsp;&nbsp;&nbsp;Item&nbsp;14
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#119">Principal Accounting Fees and Services
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">102</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#120">PART IV</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#121">&nbsp;&nbsp;&nbsp;Item&nbsp;15
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#121">Exhibits, Financial Statement Schedules and Reports on Form&nbsp;8-K
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">103</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#122">SIGNATURES
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">110</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w11.txt">EMPLOYMENT CONTRACT/ PETER RIBBINS</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w12.txt">AMENDMENT TO EMPLOYMENT CONTRACT/ PETER RIBBINS</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w16.txt">EMPLOYMENT CONTRACT/ JEFFREY PARKER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w18.txt">EMPLOYMENT CONTRACT/ FREDERICK MCTAGGART</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w21.txt">2ND AMENDT. EMPLOYMENT CONTRACT/ GREGORY MCTAGGART</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w32.txt">LEASE OF PART DATED MARCH 1, 2003</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w33.txt">LEASE OF PART DATED JULY 1, 2003</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w36.txt">AMENDED LEASE</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w43.txt">AMENDMENT TO DISTRIBUTION AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w44.txt">DISTRIBUTION AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w45.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ ABEL CASTILLO</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w46.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ BILLY BANKER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w47.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ CHET RITCH</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w48.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ DAVID HOOKER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w49.txt">EMPLOYEE SHARE OPTION LETTER/ ELIZABETH TRIANA</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w50.txt">EMPLOYEE SHARE OPTION LETTER/ HELVERT RODRIGUEZ</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w51.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ IVAN TABORA</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w52.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ LUIS WOOD</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv10w53.txt">EMPLOYEE SHARE OPTION NOTICE LETTER/ MAGGIE JULIER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv14.txt">CODE OF BUSINESS CONDUCT & ETHICS</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv21.txt">SUBSIDIARIES OF THE REGISTRANT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv23w1.txt">CONSENT OF KPMG (CAYMAN ISLANDS)</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv23w2.txt">CONSENT OF KPMG (BRITISH VIRGIN ISLANDS)</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv31w1.txt">CERTIFICATION BY THE CEO PURSUANT SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv31w2.txt">CERTIFICATION BY THE CFO PURSUANT SECTION 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv32w1.txt">CERTIFICATION BY THE CEO PURSUANT SECTION 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv32w2.txt">CERTIFICATION BY THE CFO PURSUANT SECTION 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv99w1.txt">COMPENSATION COMMITTEE CHARTER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv99w2.txt">AUDIT COMMITTEE CHARTER</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="g88198exv99w3.txt">NOMINATIONS COMMITTEE CHARTER</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="101"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART I</B>


<DIV align="left">
<A name="102"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 1. BUSINESS</B>



<P align="left" style="font-size: 10pt"><B>Introduction</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our company, Consolidated Water Co. Ltd., was incorporated in 1973 and
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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective February&nbsp;1, 2003, we acquired interests in five companies which
operate a total of seven desalination plant facilities. On July&nbsp;30, 2003, we
acquired a further 13.5% of Waterfields and effective August&nbsp;1, 2003, acquired
an additional 64.7% interest resulting in total controlling interest of 90.9%
of Waterfields. These acquisitions increased our daily water production
capacity in the Cayman Islands and the Commonwealth of the Bahamas and expanded
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 October&nbsp;2009 to
distribute the DWEER&#153; Energy Recovery System for use in reverse osmosis
seawater desalination plants in the Caribbean basin. We believe the DWEER&#153;
System gives us a distinct competitive advantage when bidding for new plant
construction projects.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 for higher
returns than most highly regulated countries; a large proportion of tourist
properties, which historically have generated higher volume sales than
residential properties.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To execute this strategy, we plan to grow our business by:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continuing to develop our production and distribution
infrastructure and providing high quality potable water to our
licensed area in the Cayman Islands;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expanding our existing operations in Belize, Barbados, the
British Virgin Islands and the Commonwealth of the Bahamas;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>extending our operations to other markets outside our current
areas of operation where there is a need for potable water; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>broadening our existing and future operations into
complimentary services.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business group structure is defined based on areas of management
responsibility, which are (i)&nbsp;the operations to supply water to retail
customers, (ii)&nbsp;the operations to supply water to bulk customers, and (iii)&nbsp;the
provision of engineering and management services. In 2003, we changed the
composition of our reportable segments. The operations in the Cayman Islands
and the Bahamas that had previously been reported as separate geographical
segments are included in Retail Water and the operation in Belize is included
in Bulk Water. Services is a new business segment created as a result of our
recent acquisitions. In 2003, our Retail Water, Bulk Water and Services
segments accounted for 57%, 37% and 6%, respectively of our total revenue. In
2002, these percentages were 88%, 12% and nil%, respectively.


<P align="center" style="font-size: 10pt">1
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Financial Information about Business Segments</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial information about business segments is included in Note 17 of
the Consolidated Water Co. Ltd. consolidated statements set forth in ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA herein.


<P align="left" style="font-size: 10pt"><B>Business Combination</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated financial statements have been presented which include the
accounts of the Company&#146;s wholly-owned subsidiaries Cayman Water Company
Limited, Belize Water Limited, Ocean Conversion (Cayman) Limited, DesalCo
Limited, DesalCo (Barbados) Ltd, and its majority owned subsidiary Waterfields
Company Limited. The operating results of Ocean Conversion (Cayman) Limited,
DesalCo Limited, DesalCo (Barbados) Ltd. have been included in the consolidated
financial statements effective February&nbsp;1, 2003. The operating results of
Waterfields Company Limited have been included in the financial statements
effective August&nbsp;1, 2003. All inter-company balances and transactions have
been eliminated. Our investment in Ocean Conversion (BVI)&nbsp;Ltd. has been
accounted for under the equity method of accounting.


<P align="left" style="font-size: 10pt"><B>RETAIL WATER OPERATIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Retail water segment accounted for 57% of our revenues in 2003 and is
comprised of businesses in the Cayman Islands and the Commonwealth of the
Bahamas. These businesses produce potable water from seawater and distribute
this water to end-users, including residential, commercial and government
customers.


<P align="left" style="font-size: 10pt"><B>Retail Water Operations in the Cayman Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the Cayman Islands, we sell retail water to a variety of customers
through our wholly-owned subsidiary Cayman Water Company Limited.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our retails operations in the Cayman Islands currently produce potable
water at three reverse osmosis seawater conversion plants in Grand Cayman,
namely our Governor&#146;s Harbour plant, West Bay plant and Britannia plant. We
own the land where two of our three water plants are located and have entered
into a 25-year lease on the site where the third plant is located. The current
production capacities of our Governor&#146;s Harbour plant, West Bay plant, and
Britannia plant are 1.2&nbsp;million, 710,000, and 440,000 U.S. gallons per day,
respectively. Since the plants began production of water, they have
consistently been capable of operating at or near their rated capacity.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Feed water for the reverse osmosis units is drawn from deep wells with
associated pumps on the properties. Reject water is discharged into brine
wells on the properties at a deeper level than the feed water intakes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Electricity to our plants is supplied by Caribbean Utilities Co. 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.


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of an emergency, our distribution system is connected to the
George Town, Grand Cayman distribution system of Water Authority-Cayman. In
prior years in order to efficiently maintain our equipment, we have purchased
water from Water Authority-Cayman for brief periods of time. We have also sold
potable water to the Water Authority-Cayman from time to time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our pipeline system in the Cayman Islands covers the Seven Mile Beach and
West Bay areas of Grand Cayman and consists of approximately 67 miles of PVC
pipeline. We extend our distribution system periodically as property
developments are completed. We have a main pipe loop covering a major part of
the Seven Mile Beach area. We place extensions of smaller diameter pipe off
our main pipe to service new developments in our service area. This system of
building branches from the main pipe keeps our construction costs low and
allows us to provide service to new areas in a timely manner. During 2003, we
completed a number of small pipeline extensions into newly developed properties
within our franchise area.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Developers are responsible for laying the pipeline within their
developments at their own cost, but in accordance with our specifications. When
a development is completed, the developer then transfers operation and
maintenance of the pipeline to us.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have a comprehensive layout of our pipeline system, which is maintained
in a computer aided design (&#147;CAD&#148;) 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.


<P align="center" style="font-size: 10pt">Residential and Commercial Operations in the Cayman Islands



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We enter into standard contracts with hotels, condominiums and other
properties located in our existing licensed area to provide potable water to
such properties. We currently have agreements on differing terms and rates to
supply potable water to the 309-room Marriott Hotel and the 343-room Westin
Hotel, the 357-room Hyatt Hotel and Britannia Golf Course, and to supply
non-potable water to the SafeHaven Golf Course.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although at a slower pace than in previous years, development is taking
place on Grand Cayman, and particularly in our licensed area to accommodate
both the growing local population and the tourism market. Because our license
requires us to supply water to developments in our licensed area, the planning
department of the Cayman Islands government routinely advises us of proposed
developments in our licensed area. This advance notice allows us to manage our
production capacity to meet anticipated demand. We believe that we have, or
have contracted for, a sufficient supply of water to meet the foreseeable
future demand.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2003, 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.


<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows, for each of the five years ended December&nbsp;31,
2003, our total number of customer connections at the end of each year and
metered sales of water for that year:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1999</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Number of Customers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Miles of Pipeline</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Metered Sales (in thousands of U.S. gallons):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Commercial</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">429,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">405,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">358,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">345,940</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">308,949</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Residential</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,528</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,661</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86,712</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Government facilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,686</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total Metered Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">542,705</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">522,995</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">451,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">401,347</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

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</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table above does not precisely represent the actual number of
customers we service. In hotels and condominiums, we may only have one
customer, which is the operator of the hotel or the condominium, but we
actually supply water to all of the units within that hotel or condominium
development. Of the customers indicated in the table above, as of 2003, 51.0%
were residential, 48.3% were hotels, condominiums and other commercial
customers and 0.7% were government facilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the past, demand on our pipeline distribution has varied throughout the
year. Demand depends upon the number of tourists visiting and the amount of
rainfall during any particular time of the year. In general, the majority of
tourists come from the United States.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 in existence prior to
1991 can 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. The equipment proved unreliable, and
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 U.S. gallons of water per
month at our standard tariff rates. If we are required to supply more than
180,000 U.S. gallons in a month, we will provide the water at our standard
tariff rates on a best efforts basis. The Marriott Hotel has recently
discontinued operation of its own reverse osmosis equipment, and increased the
capacity of its service connection to our pipe line. However the owner of the
hotel has indicated that it may refurbish the reverse osmosis equipment. We
believe that refurbishment or replacement of the plant may be a breach of law,
and have advised the Water Authority-Cayman of our concern.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1995, we entered into a 10-year agreement with the owner of the Westin
Hotel. This agreement requires us to supply up to 1.86&nbsp;million U.S. gallons per
month 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 water supply for 45
days.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2001, we entered into a 25-five year agreement, which took effect
February&nbsp;1, 2002, to acquire the Britannia plant and to supply a minimum of 62
million U.S. gallons of potable water per year on a take or pay basis to Cayman
Hotel and Golf, Inc., the owner of the Hyatt Grand Cayman Resort and Britannia
golf course. We are required by our government license to meet any water
demand from our customer above the 62&nbsp;million U.S. gallons of water supplied
per year.


<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Retail Water Operations in the Bahamas</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2000, we entered into a water supply agreement with South Bimini
International Ltd., a company incorporated in the Commonwealth of Bahamas, and
on July&nbsp;11, 2001 we began to provide potable water from one reverse osmosis
seawater conversion plant in South Bimini, Bahamas capable of producing 115,000
U.S. gallons per day. Potable water is supplied to the marina and condominium
development, Bimini Sands Resort and Bimini Beach Hotel, a 40 room hotel. The
developer of the Bimini Sands Resort continues to develop the property, but we
are not currently aware of any time schedule by the developer for the
completion of the additional 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. During 2003, we supplied South Bimini International Ltd. with 3.4
million U.S. gallons of water.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that water sales in Bimini will be cyclical. We expect that
our sales will be higher during the summer months when tourists and fisherman
arrive from the United States by boat, and when several large angling
tournaments are traditionally held in Bimini. We expect that our sales will be
lower during winter months when the weather is not conducive to pleasure boat
travel from the United States.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Feed water for the reverse osmosis unit is drawn from deep wells with
associated pumps on the property. Reject water is discharged into brine wells
on the property at a deeper level than the feed water intakes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Electricity to our plants is supplied by Bahamas Electricity Corporation.
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.


<P align="left" style="font-size: 10pt"><B>Retail Water Demand and Average Sales Price</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists the total volume of water we supplied on a quarterly
basis for the five years ended December&nbsp;31, 2003 to all of our Retail Water
customers:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1999</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>(in thousands of U.S. gallons)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,031</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144,134</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">146,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">129,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">113,007</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,201</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,888</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,421</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">546,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">527,479</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">451,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">401,347</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our average sales price per 1,000 U.S. gallons of potable water sold to
our Retail water customers for the three years ended December&nbsp;31, 2003, 2002
and 2001 are as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>(per 1,000 U.S. gallons)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Average Sales Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20.62</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>BULK WATER OPERATIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Bulk water segment accounted for 37% of our revenues in 2003 and is
comprised of businesses in the Cayman Islands, Belize, British Virgin Islands,
and the Commonwealth of the Bahamas. These businesses produce potable water
from seawater and sell this water to governments and private customers.


<P align="left" style="font-size: 10pt"><B>Bulk Water Operations in the Cayman Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the Cayman Islands, we sell bulk water, through our wholly-owned
subsidiary Ocean Conversion (Cayman) Limited, to the Water Authority-Cayman who
in turn distribute that water to properties in the parts of Grand Cayman that
are outside of our retail licensed area. During 2003, we supplied the Water
Authority-Cayman with 646&nbsp;million US gallons of water.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our acquisition of Ocean Conversion (Cayman) Limited, we
operate, but do not own, three additional reverse osmosis seawater conversion
plants in Grand Cayman with a total installed capacity of 2.9&nbsp;million U.S.
gallons per day: the Red Gate Road plant with a production capacity of 1.3
million U.S. gallons per day, the Lower Valley plant with a production capacity
of 792,000 U.S. gallons per day and the North Sound plant with a production
capacity of 792,000 U.S. gallons per day. The plants that we operate for Water
Authority-Cayman are located on land owned by the Cayman Islands government.
Ocean Conversion (Cayman) Limited provides water on a take or pay basis to the
Water Authority-Cayman, a government owned utility and regulatory agency, under
various licenses and agreements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In April&nbsp;1994, our wholly-owned subsidiary, Ocean Conversion (Cayman)
Limited, was granted a seven-year water supply license by the government of the
Cayman Islands and the Water Authority-Cayman to supply desalinated water from
the Red Gate Road plant. In January&nbsp;2001, this agreement was extended for
seven years with effect from December&nbsp;2001. Under the terms of this license
Ocean Conversion (Cayman) Limited is obligated to deliver to the Water
Authority-Cayman the amount of water it demands or 1.2&nbsp;million U.S. gallons of
water per day on average each month, which ever is less.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;1997, our wholly-owned subsidiary, Ocean Conversion (Cayman)
Limited, was granted a seven-year water supply license by the government of the
Cayman Islands and the Water Authority-Cayman to supply desalinated water from
the Lower Valley plant. In August&nbsp;1999, this agreement was extended with
effect from March&nbsp;1999 until March&nbsp;2006. Under the terms of this license Ocean
Conversion (Cayman) Limited is obligated to deliver to the Water
Authority-Cayman the amount of water it demands or 713,000 U.S. gallons of
water per day on average each month, which ever is less.


<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2001, our wholly-owned subsidiary, Ocean Conversion (Cayman)
Limited, was granted a seven-year water supply license, with effect from
November&nbsp;2002, by the government of the Cayman Islands and the Water
Authority-Cayman to supply desalinated water from the North Sound plant. Under
the terms of this license Ocean Conversion (Cayman) Limited is obligated to
deliver to the Water Authority-Cayman the amount of water it demands or 713,000
U.S. gallons of water per day on average each month, which ever is less.


<P align="left" style="font-size: 10pt"><B>Bulk Water Operations in Belize</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Belize, we sell bulk water through our wholly-owned subsidiary Belize
Water Limited to Belize Water Services Ltd. (&#147;BWSL&#148;), which distributes the
water through its own pipe line system to residential, commercial and tourist
properties in Ambergris Caye, Belize. During 2003, we supplied BWSL with 99.9
million U.S. gallons of water.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 provides
potable water from one reverse osmosis seawater conversion plant in Ambergris
Caye, Belize, Central America, capable of producing 420,000 U.S. gallons per
day, to BWSL, which acquired the operations of the Belize Water and Sewerage
Authority in February&nbsp;2001.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;17, 2003 we entered into a new 23-year contract with BWSL
to supply a minimum of 1.75&nbsp;million US gallons of water per week, or upon
BWSL&#146;s demand up to 2.1&nbsp;million US gallons per week, on a take or pay basis.
Additionally we are BWSL&#146;s exclusive supplier of desalinated water on
Ambergris Caye, Belize throughout the term of the contract. The new
contract has been executed, but final completion is subject to satisfying
three conditions precedent, of which to date we have met one and BWSL has
met one. We are awaiting confirmation from the Government of Belize that
our application for extension of our existing import duty and tax exemptions
has been granted until at least September&nbsp;17, 2009, which will satisfy the
final condition precedent. The terms and conditions of the contract signed
on June&nbsp;26, 1992 between BWSL and our company remain in full force and
effect until all conditions precedent are satisfied. On November&nbsp;12, 2003,
we offered and BWSL accepted a reduced concessionary water rate, effective
November&nbsp;1, 2003, which is equal to the water rate that we will charge BWSL
under the new agreement. This reduced concessionary rate can be withdrawn by
us at any time and we expect to offer the reduced rate until we satisfy the
conditions precedent in the new contract.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The new contract terminates on March&nbsp;23, 2026. However BWSL has the
option to advise us no later than six months before the termination date
that it wishes to renew the contract for a further 25-year period on the
same terms and conditions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;26, 1992 we entered into a contract with BWSL to supply a
minimum of 135,000 U.S. gallons of water per day to BWSL, which expires in
2011, unless otherwise terminated in accordance with the terms of our new
contract signed on September&nbsp;1, 2003. 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, 1993 and was extended on January&nbsp;2, 2004 to a period of 33&nbsp;years.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When we originally acquired Belize Water Limited in July&nbsp;2000, we were
contractually obligated to supply water to Belize Water and Sewerage
Authority, a Belize government organization. In early 2001, BWSL, a private
company, purchased Belize Water and Sewerage Authority and assumed our
contract with the Belize Water and Sewerage Authority.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The base price of water supplied, and adjustments thereto, are
determined by the terms of the


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">contracts, which provide 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
(1% per month under the new contract) is charged on any delayed payments.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BWSL distributes our water primarily to residential properties, small
hotels, and businesses that serve the tourist market.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have operated our plant in Belize since July&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In early 2003 our customer, BWSL, repaired several leaks in its
distribution pipe line in Ambergris Caye. As a result, our water sales
decreased by approximately 19% during January&nbsp;2003, and continued to be
lower than 2002 water sales for the full year in 2003. Our sales in 2003
were 11.2% lower by volume than in 2002. We expect this lower sales level
to continue, and that modest increases will occur because of ongoing
residential and tourist property development.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Feed water for the reverse osmosis units is drawn from deep wells with
associated pumps on the property. Reject water is discharged into brine wells
on the property at a level below that of the feed water intakes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Electricity to our plant 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.


<P align="left" style="font-size: 10pt"><B>Bulk Water Operations in the British Virgin Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the British Virgin Islands, we sell bulk water through our affiliate,
Ocean Conversion (BVI)&nbsp;Ltd., to the Government of the British Virgin Islands
Water and Sewerage Department (&#147;BVIW&#038;S&#148;), which distributes the water through
its own pipe line system to residential, commercial and tourist properties on
the islands of Tortola and Jost Van Dyke. During 2003, Ocean Conversion (BVI)
Ltd. supplied BVIW&#038;S with 297&nbsp;million U.S. gallons of water.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We account for our interests in Ocean Conversion (BVI)&nbsp;Ltd. using the
equity investment method, and therefore the operating results of Ocean
Conversion (BVI)&nbsp;Ltd. are not consolidated in our financial statements. Income
from this equity investment has been included in our bulk water operations
segment, since the business of Ocean Conversion (BVI)&nbsp;Ltd. is similar to the
business of our bulk water operations segment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;7, 2003, we completed our purchase of 50% of the issued and
outstanding voting stock, certain profit sharing rights and all of the
non-voting shares of Ocean Conversion (BVI)&nbsp;Ltd. Also on that date we
surrendered 18.2% of our profit sharing rights for 45,000 non-voting shares of
Ocean Conversion (BVI)&nbsp;Ltd. On May&nbsp;9, 2003 we sold all of our non-voting
shares of Ocean Conversion (BVI)&nbsp;Ltd. to Sage Water Holdings (BVI)&nbsp;Limited. We
now own 50% of the voting shares and 50% of the profit sharing rights of Ocean
Conversion (BVI)&nbsp;Ltd.


<P align="center" style="font-size: 10pt">8
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ocean Conversion (BVI)&nbsp;Ltd. supplies desalinated water produced from its
Baughers Bay desalination plant in Tortola, British Virgin Islands to BVIW&#038;S.
On May&nbsp;31, 1999, the British Virgin Islands Government did not extend the water
supply agreement for a seven-year period, and did not make a terminal payment
of $1.42&nbsp;million to Ocean Conversion (BVI)&nbsp;Ltd., which would have entitled them
to take possession of the Baughers Bay plant. On January&nbsp;28, 2000, the
government advised Ocean Conversion (BVI)&nbsp;Ltd. that it considered a water sales
arrangement to be in force on a monthly basis until negotiations for a new
agreement could be concluded. Negotiations on the terms of a new agreement
have not proceeded since our acquisition of interests in Ocean Conversion (BVI)
Ltd., and we are presently awaiting an indication from government that they
wish to meet to discuss the terms of a new agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ocean Conversion (BVI)&nbsp;Ltd.&#146;s Baughers Bay plant was expanded in December
2003 to a capacity of 1.7&nbsp;million U.S. Gallons per day. The plant is dual-train
seawater reverse osmosis plant with an advanced energy recovery system.
Ocean-Conversion (BVI)&nbsp;Ltd. generates its own electrical power on site using
two large Caterpillar diesel driven generator units. Ocean Conversion (BVI)
Ltd. also purchases electricity from the BVI Electric Co. to power ancillary
equipment and provide building lighting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our wholly-owned subsidiary, DesalCo Limited, provides a Vice President
and Chief Executive Officer as well as other management and engineering
services to Ocean Conversion (BVI)&nbsp;Ltd. in the form of accounting services,
personnel management and plant management for a monthly fee of $20,400. DesalCo
Limited also receives a bonus of 4% of the annual net operating income of Ocean
Conversion (BVI)&nbsp;Ltd.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Articles of Association of Ocean Conversion (BVI)&nbsp;Ltd., we are
able to appoint three of the six directors of the company. Sage Water Holdings
(BVI)&nbsp;Limited, 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 junior director to break
the tie.


<P align="left" style="font-size: 10pt"><B>Bulk Water Operations in the Bahamas</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the Commonwealth of the Bahamas, we sell bulk water through our
majority-owned subsidiary, Waterfields Company Limited, to the Water and
Sewerage Corporation of the Bahamas (&#147;WSC&#148;), which distributes the water
through its own pipe line system to residential, commercial and tourist
properties on the island of New Providence. During 2003, Waterfields Company
Limited supplied WSC with 587&nbsp;million U.S. gallons of water.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our acquisition of DesalCo Limited on February&nbsp;7, 2003 we
acquired a 12.7% interest in Waterfields Company Limited. On July&nbsp;30, 2003, we
acquired a further 13.5% of Waterfields and effective August&nbsp;1, 2003, acquired
an additional 64.7% interest resulting in total controlling interest of 90.9%
of Waterfields.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We supply bulk water to WSC from our Windsor Plant under the terms of a
15-year water supply agreement dated May&nbsp;7, 1996. We are required under this
agreement to provide WSC with at least 16.8&nbsp;million US gallons per week of
potable water, and WSC has contracted to purchase at least that amount from us
on a take-or-pay basis. The water supply agreement expires on the later of
March&nbsp;1, 2013 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, WSC has the following options:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>extend the term of the agreement for an additional five years at a
reduced rate specified in the agreement;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>exercise a right of first refusal to purchase any materials,
equipment and facilities that Waterfields intends to remove from the
site, and negotiate a purchase price with Waterfields; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require Waterfields to remove all materials, equipment and
facilities from the site.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Feed water for the reverse osmosis unit is drawn from deep wells with
associated pumps on the property. Reject water is discharged into brine wells
on the property at a deeper level than the feed water intakes.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Electricity to our plants is supplied by Bahamas Electricity Corporation.
We maintain, standby generator with sufficient capacity to operate essential
equipment at our Windsor Plant and are able to produce water with this plant
during any temporary interruptions in the electricity supply.


<P align="left" style="font-size: 10pt"><B>Bulk Water Demand and Average Sales Price</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below lists the total volume of water we supplied on a quarterly
basis for the four years ended December&nbsp;31, 2003 to all of our Bulk water
customers:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>(in thousands of U.S. gallons)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,589</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">208,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,206</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,519</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,028</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,507</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,552</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,624</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">992,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,537</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,131</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our average sales price per 1,000 U.S. gallons of potable water sold to
our Bulk water customers for the three years ended December&nbsp;31, 2003, 2002
and 2001 are as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>(per 1,000 U.S. gallons)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Average Sales Price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.12</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">10
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="left" style="font-size: 10pt"><B>SERVICES (ENGINEERING AND MANAGEMENT) OPERATIONS</B>



<P align="left" style="font-size: 10pt"><B>Engineering Services Operations acquired through DesalCo Limited</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our acquisition of DesalCo Limited effective February&nbsp;1,
2003, we provide management, engineering and construction services for
desalination projects and are the exclusive agents for sales of DWEER&#153; energy
recovery systems for desalination plants in the Caribbean basin until October
2009. DesalCo Limited, which is recognized by suppliers as an original
equipment manufacturer of reverse osmosis seawater desalination plants, also
acts as the purchasing agent for all companies affiliated with our company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003 DWEER Technology Ltd. (&#147;DWEER Tech&#148;), the owner of the DWEER&#153;
technology, licensed the world-wide rights to the DWEER&#153; technology to Calder
AG, a Swiss company. On February&nbsp;26, 2004 we entered into a new exclusive
Caribbean distributorship agreement with Calder AG for the DWEER&#153; technology,
and amended the terms of our distributorship agreement with DWEER Tech. The
Calder agreement supercedes our agreement with DWEER Tech, and contains terms
comparable to the DWEER Tech agreement.


<P align="left" style="font-size: 10pt"><B>Service Operations in Barbados</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective February&nbsp;1, 2003, we acquired all of the issued and outstanding
stock of DesalCo Limited. DesalCo Limited 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 Limited, we acquired
control of its wholly-owned subsidiary, DesalCo (Barbados) Ltd.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of a supply agreement and operating agreement with Sandy
Lane Properties Ltd., DesalCo Limited constructed and operates a seawater
desalination plant, which provides irrigation water for several golf courses on
the Sandy Lane Resort in St. James, Barbados. The plant and property are owned
by Sandy Lane Properties Ltd. and DesalCo Limited operates the plant under the
terms of a five-year operating agreement, which expires in January&nbsp;2006. Sandy
Lane Properties Ltd. has the option to cancel the operating agreement with
three months prior notice to DesalCo Limited, subject to certain penalties for
early termination of the operating agreement. The operating agreement was
assigned to DesalCo Limited&#146;s wholly-owned subsidiary, DesalCo (Barbados) Ltd.,
in January&nbsp;2001 and DesalCo (Barbados) Ltd. pays a monthly assignment fee to
DesalCo Limited equal to 8% of the gross revenue received under the operating
agreement. DesalCo Limited also provides certain engineering services and pays
a portion of the plant manager&#146;s salary in exchange for a management fee of
approximately $12,640 per month and reimbursement of expenses. This management
fee was reduced in May&nbsp;2003 from approximately $14,700 per month.


<P align="left" style="font-size: 10pt"><B>OTHER INFORMATION REGARDING THE COMPANY&#146;S BUSINESS</B>



<P align="left" style="font-size: 10pt"><B>Wastewater Services in the Cayman Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We began providing sewerage services on Grand Cayman in 1973. In 1987, the
Cayman Islands government, through Water Authority-Cayman, constructed a public
sewerage system in part of the Seven Mile Beach area where Governor&#146;s Harbour
is located. In 1988, Water Authority-Cayman began processing sewage delivered
by the pipelines and lift stations in that area and we stopped our processing
of sewage. Water Authority-Cayman currently directly bills our former sewerage
customers for its services. In October&nbsp;2001, we reached an agreement with the
Water Authority-Cayman pursuant to which


<P align="center" style="font-size: 10pt">11
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">Water Authority-Cayman assumed, in November&nbsp;2002, the operation of two
remaining sewage lift stations, which we had operated. No revenue was earned
for wastewater services during the three years ended December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt"><B>The Government in the Cayman Islands, Customs Duties and Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Cayman Islands are a British Overseas Territory of the United Kingdom
and have had a stable political climate since 1670, when the Cayman Islands
were ceded to England by the Treaty of Madrid. The Queen of England appoints
the Governor of the Cayman Islands to make laws with the advice and consent of
the legislative assembly. There are 15 elected members of the legislative
assembly and three members appointed by the Governor from the Civil Service.
The Executive Council is responsible for day-to-day government operations. The
Executive Council consists of five ministers who are chosen by the legislative
assembly from its 15 popularly elected members, and the three Civil Service
members. The Governor has reserved powers and the United Kingdom retains full
control over foreign affairs and defense. The Cayman Islands are a common law
jurisdiction and have adopted a legal system similar to that of the United
Kingdom.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have exemptions 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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>there are no local taxes on profit, income, distributions, capital
gains or appreciations of our company in the Cayman Islands;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we do not pay any import duty or taxes on permeator membranes,
electric pumps and motors and chemicals, and we pay duty at the rate of
10% of the cost, including insurance and transportation to the Cayman
Islands, of other plant and associated materials and equipment to
manufacture or supply water in Seven Mile Beach or West Bay areas; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Ocean Conversion (Cayman) Limited pays all customs duties up to 10%
in respect of materials and supplies imported for the Red Gate plant
and is reimbursed amounts in excess of this by Water Authority-Cayman.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 date 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


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<P align="left" style="font-size: 10pt"><B>The Government in the Bahamas, Customs Duty, and Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not been granted any tax exemptions for our Bahamian operations.
Bahamian companies are subject to an annual business license fee ranging from
1% to 2% of their gross revenues. We did not pay any business license fees to
the Bahamian government in respect of our Bimini retail water operations during
2001, 2002, or 2003, other than National Insurance Board tax on our employees.
We estimate our potential tax liability based on our 2003, 2002 and 2001 gross
revenues to be less than $2,500.


<P align="left" style="font-size: 10pt"><B>The Government in Belize, Customs Duty, and Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Belize (formerly British Honduras) achieved full independence from the
United Kingdom in 1981. Today, Belize is a constitutional monarchy with the
adoption of a constitution in 1991. Based on the British model with three
independent branches, the Queen of England is the constitutional head of state,
represented by a Governor General in the government. A prime minister and
cabinet make up the executive branch, while a 29 member elected House of
Representatives and a nine member appointed Senate form a bicameral
legislature. The cabinet consists of a prime minister, other ministers and
ministers of state who are appointed by the Governor-General on the advice of
the Prime Minister, who has the support of the majority party in the House of
Representatives. Belize is an English common law jurisdiction with a Supreme
Court, Court of Appeals and local Magistrate Courts.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Government of Belize has exempted Belize Water Limited from all import
duties and stamp taxes until January&nbsp;28, 2005, and company taxes until January
28, 2006. Belize levies a gross receipts tax on corporations at a rate varying
between 0.75% and 25%, depending on the type of business, and a corporate
income tax at a rate of 25% of chargeable income. Gross receipts tax payable
amounts are credited towards corporate income tax. We believe our business
would be subject to a 1.25% gross receipts tax and income tax without our
exemption. Belize levies import duty on most imported items at rates varying
between 0% and 45%, with most items attracting a rate of 20%. 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 and we
cannot give any assurance that we will be granted any further tax exemptions
after January&nbsp;28, 2006.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January&nbsp;2004, in connection with our new water sales contract with
BWSL, we submitted an application to the Government of Belize requesting that
our existing stamp tax, import duty, and company tax exemptions are extended
until March&nbsp;23, 2026. We have received confirmation that our application is
currently under review, and we are awaiting a reply from the government.


<P align="left" style="font-size: 10pt"><B>The Government in the British Virgin Islands and Customs, Duties and Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The British Virgin Islands is an Overseas Territory of the United Kingdom
that was first settled by the Dutch in 1648 and annexed by the British in 1672.
It adopted a constitution in 1977 and is now a constitutional democracy with
three branches of government: the Executive Council, the Judiciary and the
Legislative Council. Executive authority is vested in the Queen of England,
exercised through her representative, the Governor. The Governor has
responsibility for the courts, public service, police, and foreign affairs and
full policy-making authority. The Governor is not a member of the Executive
Council but receives assistance with the day-to-day operations of the
government. The Executive Council is made


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<P align="left" style="font-size: 10pt">up of various members of the legislature. The Parliament or Legislative
Council is made up of (13)&nbsp;thirteen seats with members elected by popular vote,
serving up to but no more than five-year terms. The British Virgin Islands are
an English common law jurisdiction with a Supreme Court, Court of Appeals and
Magistrates Court.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The British Virgin Islands imposes a corporate income tax at a rate of 15%
of net income. However, Ocean Conversion (BVI)&nbsp;Ltd. received an exemption,
under the water supply agreement with the British Virgin Islands government,
from all taxes, duties, levies and impositions on items which it imports for
the Baugers Bay plant.


<P align="left" style="font-size: 10pt"><B>The Government in Barbados and Customs, Duties and Taxes</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Barbados is an independent island nation that was initially occupied by
the British in 1627. It remained a British colony until 1961 when it was
granted internal autonomy. Barbados gained full independence in 1966 but
remains a member of the British Commonwealth that appoints the Governor
General. The Governor General appoints members of the cabinet with the advice
of the prime minister. The parliament consists of the senate whose 21 members
are appointed by the Governor General and the assembly whose 28 members are
popularly elected. Barbados is an English common law jurisdiction with a
Supreme Court.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net income of DesalCo (Barbados) Ltd. is subject to a 40% Barbados
corporate tax, and all dividend payments and supplier payments are subject to a
Barbados withholding tax of 15%. All customs duties due on parts and equipment
for the plant are paid by DesalCo (Barbados) Ltd. since a concession on such
duties held by Sandy Lane Properties Ltd. expired in March&nbsp;2004. Value added
taxes are paid by Sandy Lane Properties Ltd. DesalCo (Barbados) Ltd. has made
all necessary tax filing and payments.


<P align="left" style="font-size: 10pt"><B>Government Regulation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have received confirmation from the Public Utilities Commission of
Belize that they approve of the terms and conditions of our new contract with
Belize Water Services Limited. We believe that our operations in Belize comply
with all other local laws and regulations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 it relates to our Bimini operation, as
disclosed above.


<P align="left" style="font-size: 10pt"><B>Market and Service Area</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we currently operate in the Cayman Islands, Belize, Barbados, the
British Virgin Islands and the Bahamas, we believe that our potential market
consists of any location where there is a need for potable water. 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 distillation and reverse osmosis desalination plants as well as
our exclusive rights in the Caribbean to the DWEER&#153; energy recovery system
provides us with a significant opportunity to successfully expand our
operations beyond the markets in which we currently operate.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to our acquisition of Ocean Conversion (Cayman) Limited in February
2003, the market that we serviced under our exclusive license in the Cayman
Islands consisted of Seven Mile Beach and


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<P align="left" style="font-size: 10pt">West Bay, Grand Cayman, two of the three most populated areas in the Cayman
Islands. 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) Limited, we operate all 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) Limited with Water-Authority Cayman.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the most recent figures published by the Economics and
Statistics Office of the Cayman Islands Government, the population of the
Cayman Islands was approximately 39,410 in 1999. The figures published by the
Cayman Islands Government Department of Tourism show that for the year ended
December&nbsp;31, 2003, the tourist air arrivals decreased by 3% and tourists cruise
ship arrivals increased 16% from the prior year. Total visitors increased to
2.1&nbsp;million persons for the year ended December&nbsp;31, 2003 from 1.9&nbsp;million
during the year ended December&nbsp;31, 2002. We believe that our water sales in
the Cayman Islands are more positively impacted by tourists that arrive by air
than by those arriving by cruise ship, since cruise ship tourists generally
only remain on island for one day or less.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2003, construction progresses markedly within our franchise area on
the 360-room Ritz Carlton Hotel, condominiums and golf course development. The
developer of this project has announced an anticipated completion date of
December&nbsp;2004. 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During 2002, the government of the Cayman Islands amended the Development
and Planning Law to permit construction of buildings up to seven stories 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 old height restriction, and it has already
facilitated the re-development of one existing property, which has been
demolished and re-built as a seven-story structure.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our current operations in Belize are located on Ambergris Caye, which
consists of 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
miles long and, according to the Belize National Population Census 2000, has a
population of about 4,500 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 (&#147;BWSL&#148;) currently has no other source of potable water on Ambergris
Caye. Our new contract with BWSL makes us the exclusive producer of
desalinated water on Ambergris Caye though 2026.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A 185 mile long barrier reef, which is the largest barrier reef in the
Western Hemisphere, is situated just offshore of Ambergris Caye. This natural
attraction is 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 islands which comprise the Bahamas. The Bimini
Islands are located approximately 50 miles east of Ft. Lauderdale, Florida and
are a premier destination for sport fishing enthusiasts. The population of the
Bimini Islands is approximately 1,600 persons and the islands have about 200
hotel and guest rooms available for tourists. The total land area of the Bimini
Islands is approximately 9 square miles.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New Providence, Lyford Caye and Paradise Island, connected by several
bridges, are located approximately 150 miles east southeast of the Bimini
Islands. With an area of 151 square miles and a population of approximately
211,000, Nassau is the political capital and the commercial hub of the Bahamas.
As the largest city with its famed Cable Beach, it accounts for more than
two-thirds of the four million tourists who visit the Bahamas annually. New
Providence is presently experiencing intermittent water shortages and imports
about one-half of its water from Andros Island, which lies about 35 miles west
of New Providence.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 uninhabited islands, of which Tortola
is the largest and most populated island. The islands are the center for many
large yacht-chartering businesses.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Barbados, located northeast of Venezuela between the Caribbean Sea and the
North Atlantic Ocean, is an independent sovereign nation member of the British
Commonwealth. It has a population of approximately 277,000 and was
traditionally known for its cultivation of sugar cane. More recently, the
economy has diversified to include tourism and light manufacturing.


<P align="left" style="font-size: 10pt"><B>Growth Strategy</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our growth strategy is as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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. We have increased our
share of the 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.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We intend to expand our existing operations in the Cayman
Islands, Belize, Barbados, the British Virgin Islands and the
Commonwealth of the Bahamas. For example, through negotiations with
Belize Water Services Limited, we have extended the term of our
agreement to 23&nbsp;years and increased the guaranteed minimum
quantities supplied. 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 are pursuing two new opportunities to produce and sell more
water in New Providence. In the British Virgin Islands, we expanded
the capacity of our existing plant on the island of Tortola from 1.2
million to 1.7&nbsp;million U.S. gallons per day, and we are constructing
a second plant on the island of Tortola.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We intend to expand our operations to other markets outside
of our current areas of operation where there is need for potable
water. 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</TD>
</TR>

</TABLE>

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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ventures. So far, we have focused on various locations throughout the
Caribbean basin and Central America.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We intend to broaden our existing and future operations into
complementary services. 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.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><B>Reverse Osmosis Technology</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. 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 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 of our current operating areas.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, DesalCo Limited, our recently acquired wholly-owned
subsidiary, is the exclusive distributor in the Caribbean basin for the DWEER&#153;
system produced by DWEER Technology Limited for use in reverse osmosis seawater
desalination plants. An advanced energy recovery system, the DWEER&#153; 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&#153; system
recovers nearly 100% of the energy contained in the reject water (or brine)
from the reverse osmosis process. As a result, the DWEER&#153; energy recovery
system for reverse osmosis seawater desalination plants is one of the most
energy efficient systems of its kind. The DWEER&#153; system is used on all
desalination plants that DesalCo Limited has designed since 1990. As a result
of the completion of the DesalCo Limited acquisition in February&nbsp;2003, our
company has the exclusive distribution rights for the DWEER&#153; system in the
Caribbean basin through October&nbsp;2009.


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<P align="left" style="font-size: 10pt"><B>Raw Materials and Sources of Supply</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All materials, parts and supplies essential to our business operations can
normally be obtained from multiple sources, except for the DWEER&#153; energy
recovery devices which are exclusively manufactured by Calder AG, a Swiss
company, and which we use at all of our plants with the exception of the Belize
and Britannia plants. We have obtained, through our subsidiary DesalCo Limited,
a seven-year exclusive distributorship agreement with Calder AG for the DWEER&#153;
system. We do not manufacture any parts or components for equipment essential
to our business. Our access to seawater for processing into potable water is
granted through our licenses and contracts with governments of the various
jurisdictions in which we have our operations.


<P align="left" style="font-size: 10pt"><B>Licenses, Franchises and Concessions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our exclusive operational license was issued to us by the Cayman Islands
government under The Water (Production and Supply) Law of 1979. Unless renewed,
the license terminates on July&nbsp;11, 2010.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Two years prior to the expiration of the license, we have the right to
negotiate with the government to extend the license for an additional term.
Unless we are in default under the license, the government may not grant a
license to any other party without first offering the license to us on terms
that are no less favorable than those which the government offers to a third
party.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 supply is not considered
commercially feasible, we may require the potential customer to contribute
toward the capital costs 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 the government, reviews and approves the
calculations of the price adjustments for inflation and electricity costs.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&nbsp;1985.


<P align="left" style="font-size: 10pt"><B>Seasonal Variations in Our Business</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although, our water sales in the Cayman Islands, Belize and Bimini are
seasonal, the variations between the periods are not significant. We normally
sell more water during the first and second quarters when greater numbers of
tourists are present. Our sales are also affected to some extent by the
weather. We sell less water during the third and fourth quarters, which
normally experience higher rainfall amounts than other times of the year. We
do not believe that our operations in Nassau and Tortola will be subject


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<P align="left" style="font-size: 10pt">to significant seasonal variations in demand. Our operation in Barbados
has been subject to seasonal demand variations since Sandy Lane finished the
grow-in of the grass on their three golf courses in early 2003.


<P align="left" style="font-size: 10pt"><B>Competition</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On Ambergris Caye in Belize, our new water supply contract with Belize
Water Services Limited is exclusive, and Belize Water Services Limited can no
longer seek contracts with other water suppliers, or produce water themselves,
to meet their future needs in San Pedro, Ambergris Caye, Belize.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On South Bimini Island in the Bahamas, we supply water to a private
developer and do not have competitors. AquaDesign, an Ionics Inc. company,
operates a seawater desalination plant on North Bimini Island. We are aware
that AquaDesign/Ionics, Enerserve/Vivendi, IDE, Pridesa, Inima and Biwater are
competing with us for a new contract with the Bahamian government to build and
operate a seawater desalination plant at Blue Hills, New Providence, Bahamas.
We expect to compete with these companies in the future for similar projects.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AquaDesign operates seawater desalination plants in West End and Sea Cows
Bay, Tortola, and on Virgin Gorda in the British Virgin Islands and generally
bids against Ocean Conversion (BVI)&nbsp;Ltd. 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)&nbsp;Ltd. is currently
designing a seawater desalination plant to be constructed on a site already
identified in East End, Tortola.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DesalCo (Barbados) Ltd., the wholly-owned subsidiary of DesalCo Limited,
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 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To implement our growth strategy outside our existing operating areas, we
will have to compete with the same companies we are presently competing with
for the Blue Hills project in Nassau, Bahamas. These companies currently
operate in areas in which we would like to expand our operations. These
companies already maintain world-wide operations and have greater financial,
managerial and other resources than our company. We believe that our low
overhead costs, knowledge of local markets and conditions, exclusive rights in
the Caribbean to the DWEER&#153; energy recovery system and our efficient manner of
operating desalinated water production and distribution equipment will provide
us competitive advantage on projects, ranging in size up to 8&nbsp;million U.S.
gallons per day, in the Caribbean basin and surrounding areas.


<P align="left" style="font-size: 10pt"><B>Environmental Matters</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to our Cayman Islands operations, although not required by
local government regulations, we operate our water plants in accordance with
guidelines of the Cayman Islands Department of Environment. Under these
guidelines, our plants may not have emissions of hydrogen sulfide at levels
greater than 20 milligrams per liter at the exit of the air scrubbers. We are
licensed by the government to


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<P align="left" style="font-size: 10pt">discharge concentrated seawater, which is a byproduct of our desalination
process, into deep disposal wells.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Cayman Islands license requires that our potable water quality meet
the World Health Organization&#146;s Guidelines for Drinking Water Quality and
contain less than 200 mg/l of total dissolved solids. On February&nbsp;1, 2003, we
entered into a license amendment with the government under which we were
required by October&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) Limited to Water Authority-Cayman. We completed upgrades
to our Governor&#146;s Harbour, West Bay and Britannia plants before the October 1st
deadline, and we meet all of the water quality requirements in our Cayman
license. In addition, noise levels at our plants cannot exceed the standards
established by the U.S. Occupational Safety and Health Act. To date, we have
not received any complaints from any regulatory authorities concerning hydrogen
sulfide emissions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to our Belize, Bahamas and British Virgin Islands operations,
we are required by our water supply contracts to take all reasonable measures
to prevent pollution of the environment. We are licensed by the Belize and
Bahamian governments to discharge concentrated seawater, which is a byproduct
of our desalination process, into deep disposal wells, and by British Virgin
Islands government to discharge concentrated seawater into the coastal marine
environment. We operate our plants in a manner so as to minimize the emission
of hydrogen sulfide gas into the environment. We are not aware of any existing
or pending environmental legislation which may affect our operations in Belize,
the Bahamas and the British Virgin Islands. To date we have not received any
complaints from any regulatory authorities regarding hydrogen sulfide gas
emission, nor any other matter relating to operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In Barbados, we operate a seawater desalination plant for Sandy Lane
Properties Ltd., who holds all of the government and environmental permits
relating to the construction and operation of the plant. We are not aware of
any existing or pending environmental legislation which may affect our
operations in Barbados.


<P align="left" style="font-size: 10pt"><B>Employees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Including employees from our acquisitions in February&nbsp;2003, we employ 55
persons in the Cayman Islands, seven of whom are executive and management
personnel who have an average of 15&nbsp;years experience with our company or in a
directly related position. Ten employees are engaged in administrative and
clerical positions. The remaining staff are engaged in engineering, plant
maintenance and operations, pipe laying and repair, leak detection, new
customer connections, meter reading and laboratory analysis of water quality.
Our staff has significant experience and on average has worked with us for
eight years, with three of the employees having worked over 20&nbsp;years with us.
We presently employ six persons in Belize to manage and operate our plant.
Waterfields Company Limited presently employs eight persons to operate the
plant in New Providence, Bahamas. We directly employ one person to manage and
operate our water plant and distribution system in South Bimini, Bahamas. We
presently employ five persons in Barbados to operate the water plant for Sandy
Lane Properties. Currently, we manage the five employees of Ocean Conversion
(BVI)&nbsp;Ltd. in the British Virgin Islands. None of our employees is party to a
collective bargaining agreement. We consider our relationship with our
employees to be good.


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<P align="left" style="font-size: 10pt"><B>ITEM 2. PROPERTIES</B>



<P align="left" style="font-size: 10pt"><B>Cayman Island Properties</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Governor&#146;s Harbour Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own our Governor&#146;s Harbour plant and the 8,745 square feet of buildings
which contain the water treatment facility, and operate and maintain the plant
through our wholly-owned subsidiary Ocean Conversion (Cayman) Limited. The
plant is located on 3.2 acres, including 485 feet of waterfront. The current
water production capacity of our Governor&#146;s Harbour plant is 1.2&nbsp;million U.S.
gallons per day. On this site we also have three 1.0&nbsp;million U.S. gallon
potable water storage tanks, which were constructed in 2003 to replace our
previous 2.0&nbsp;million U.S. gallon fabric-lined storage tanks. The property
surrounding the facility has yet to be fully developed, although these areas
are being developed for residential and tourist accommodations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;West Bay Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own, operate and maintain our West Bay plant in Grand Cayman, which is
located on 6.1 acres in West Bay. The plant began operating on June&nbsp;1, 1995 and
was expanded in February&nbsp;1998 and again in February&nbsp;2000. On this site, we have
a 2,600 square foot building which houses our water production facilities, a
2,400 square foot building which houses the potable water distribution pumps, a
water quality testing laboratory, office space and water storage capacity
consisting of three 1.0&nbsp;million U.S. gallon potable water tanks. The current
capacity of our West Bay plant is 710,000 U.S. gallons per day.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Britannia Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;1, 2002, we purchased the Britannia seawater desalination
plant in Grand Cayman, 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution System


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own our Seven Mile Beach and West Bay potable water distribution
systems in Grand Cayman. The combined systems consist of approximately 67
miles of polyvinyl chloride and polyethylene water pipes, valves, curb stops,
meter boxes, and water meters installed in accordance to accepted engineering
standards in the United States of America.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leased Properties


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the properties where our water plants are located, we rent
approximately 4,350 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,
2008, with an extension provision until January&nbsp;31, 2010.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operations Acquired as a Result of Our Recent Acquisition of Ocean Conversion (Cayman) Limited


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following completion of our acquisition of all of the outstanding stock of
each of DesalCo


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<P align="left" style="font-size: 10pt">Limited and Ocean Conversion (Cayman) Limited, we assumed operational
control over four water production plants in the Cayman Islands, one of which
we already owned, but had contracted with Ocean Conversion (Cayman) Limited to
operate until December&nbsp;2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Red Gate Road Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the water production and supply license between Ocean
Conversion (Cayman) Limited and the government of the Cayman Islands, Ocean
Conversion (Cayman) Limited is allowed to use the property on which the 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) Limited owns 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 on November&nbsp;30, 2008, Water Authority-Cayman will
take possession of the plant for no consideration. This license was extended in
November&nbsp;2001 for a period of seven years and no further extension options are
included in the present license.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lower Valley Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ocean Conversion (Cayman) Limited provided the plant and equipment to
Water Authority-Cayman under a seven-year vendor-financed sale and operating
agreement. Ocean Conversion (Cayman) Limited operates the electrically-powered
850,000 U.S. gallons per day rated plant and supplies approximately 792,000
U.S. gallons of desalinated water per day to Water Authority-Cayman. Ocean
Conversion (Cayman) Limited leases the property on which the plant is located
from Water Authority-Cayman for a minimal annual rent for the duration for the
sale and operating agreement, which expires on March&nbsp;9, 2006, but which
contains a provision to extend the operating portion of the agreement for an
additional period. Responsibility for operation of the plant passes to Water
Authority-Cayman upon expiration of the lease-purchase and operating agreement.
No further expansions of the plant are possible due to the restrictive size of
the site and special considerations related to the feed water and brine
disposal wells.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;North Sound Plant


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction of this plant commenced in June&nbsp;2002 and was completed in
November&nbsp;2002. Ocean Conversion (Cayman) Limited provided the plant and
equipment to Water Authority-Cayman under a seven-year vendor-financed sale and
operating agreement. Ocean Conversion (Cayman) Limited operates the
electrically powered plant and supplies approximately 792,000 U.S. gallons of
desalinated water per day to Water Authority-Cayman. Ocean Conversion (Cayman)
Limited leases the property on which the plant is located from Water
Authority&#150;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 on
November&nbsp;28, 2009.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Services Agreement


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The management services agreement between DesalCo Limited and Ocean
Conversion (Cayman) Limited was terminated on December&nbsp;1, 2003. Our company
now provides management and engineering resources directly to its wholly-owned
subsidiary, Ocean Conversion (Cayman) Limited.


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<P align="left" style="font-size: 10pt"><B>Belize Properties</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own our San Pedro water production facility in Ambergris Caye, Belize.
The plant consists of a one story concrete block building, which contains a
seawater RO water production plant with a production capacity of 420,000 US
gallons per day. We lease from the Government of Belize at an annual rent of
BZ$1.00, the parcel of land on which our plant is located. The lease commenced
on April&nbsp;27, 1993 and was recently extended for a term of 33&nbsp;years.


<P align="left" style="font-size: 10pt"><B>Bahamas Properties</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own our Bahamas water production facility in South Bimini, Bahamas. The
plant consists of two 40 foot long standard refrigerated shipping containers,
which contain a seawater RO water production plant with a rated capacity of
115,000 US gallons per day, a 250,000 US gallon bolted steel potable water
tank, and a high service pump skid. The facility is located on a parcel of
land owned by South Bimini International Ltd., and we are allowed, under the
terms of our water supply agreement, to utilize the land for the term of the
agreement, without charge.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own our Bahamas water production facility in Nassau, New Providence,
Bahamas. The plant consists of four independent seawater reverse osmosis
units, each with a production capacity of 700,000 U.S. gallons of water per
day, a brackish water reverse osmosis plant with a production capacity of 2.6
million U.S. gallons per day, feed water deep wells, brine injection wells,
fuel storage tanks, and other ancillary equipment. All of the seawater units
feed their product into the brackish water unit which produces water for the
Water and Sewerage Corporation of the Bahamas containing less than 50 mg/l of
total dissolved solids. The plant is powered by a combination of diesel
engine-driven high pressure pumps, and electrical power purchased from the
Bahamas Electricity Corporation to power all other loads in the plant. The
plant is contained within a 13,000 sq. ft. concrete and steel building, which
also contains a warehouse, workshop and offices. The plant is located on land
owned by the Water and Sewerage Corporation of the Bahamas and our fifteen-year
water sales agreement gives us a license to use the land throughout the term of
that agreement.

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<P align="left" style="font-size: 10pt"><B>ITEM 3. LEGAL PROCEEDINGS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not currently a party to any ongoing or pending legal proceeding.

<DIV align="left">
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<P align="left" style="font-size: 10pt"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No matter was submitted during the fourth quarter of the fiscal year
covered by this Annual Report to a vote of security holders, through the
solicitation of proxies or otherwise.


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<DIV align="left">
<A name="106"></A>
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<P align="center" style="font-size: 10pt"><B>PART II</B>


<DIV align="left">
<A name="107"></A>
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<P align="left" style="font-size: 10pt"><B>ITEM 5. MARKET FOR REGISTRANT&#146;S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</B>



<P align="left" style="font-size: 10pt"><B>Market Information</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ordinary shares of common stock (&#147;ordinary shares&#148;) are listed on the
Nasdaq National Market and trade under the symbol &#147;CWCO&#148;. Our ordinary shares
are not traded on any market other than the Nasdaq National Market. Listed
below, for each quarter of the last two fiscal years, are the high and low
closing bid prices for the ordinary shares on the Nasdaq National Market.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>HIGH</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>LOW</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.13</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15.91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13.50</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.02</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17.37</TD>
    <TD>&nbsp;</TD>
</TR>

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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The high and low closing bid prices in the table reflect interdealer
prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no trading market for our redeemable preferred shares, which are
only issued to, or purchased by, long-term employees of our company and which
must be held by these employees for a period of four years before they vest.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December&nbsp;31, 2003, we issued options to purchase an additional
165,752
ordinary shares having an exercise price of $20.05 to two directors and three
executive officers. These options are exercisable until April&nbsp;7, 2007. The
options issued on December&nbsp;31, 2003 were exempt from registration under
Regulation&nbsp;S promulgated under the Securities Act of 1933 because the options
were offered and sold outside of the United States to non-U.S. persons, as
defined in Regulation&nbsp;S. All of the options were issued as consideration for
services that the directors and the executive officer provided to us during
fiscal year 2003.


<P align="left" style="font-size: 10pt"><B>Holders</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;29, 2004, we had 654 holders of record of our ordinary shares.


<P align="left" style="font-size: 10pt"><B>Dividends</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have paid cash dividends on our ordinary shares since 1985. The board
of directors&#146; policy is to pay cash dividends out of accumulated profits on a
quarterly basis, if funds are available. Our board of directors have
established a policy, although not a binding obligation, that, subject to
annual review by the board of directors, our company will maintain a dividend
pay-out ratio in the range of 50% to 60% of


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<P align="left" style="font-size: 10pt">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 (Cayman
Islands) Ltd. that dividends be paid from current cash flow. The 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Listed below, for each quarter of the last two fiscal years, is the amount
of interim dividends, in U.S. dollars, declared on our issued and outstanding
ordinary shares and redeemable preferred shares. No final dividend was
declared during the last two fiscal years.

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<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">First Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Second Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Third Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fourth Quarter 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Per Share</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;10, 2004 our board of directors declared an interim cash
dividend of $0.115 per share, an increase of approximately 10%, payable on
April&nbsp;30, 2004 to shareholders of record on March&nbsp;31, 2004.


<P align="left" style="font-size: 10pt"><B>Exchange Controls and Other Limitations Affecting Security Holders</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our company is not subject to any governmental laws, decrees or
regulations in the Cayman Islands which restrict the export or import of
capital, or that affect the remittance of dividends, interest or other payments
to non-resident holders of our securities. The Cayman Islands does not impose
any limitations on the right of non-resident owners to hold or vote our
ordinary shares other than stated below. There are no exchange control
restrictions in the Cayman Islands.


<P align="left" style="font-size: 10pt"><B>Taxation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Cayman Islands presently impose no taxes on profit, income,
distribution, capital gains, or appreciations of our company and no taxes are
currently imposed in the Cayman Islands on profit, income, capital gains, or
appreciations of the holders of our securities or in the nature of estate duty,
inheritance, or capital transfer tax. There is no income tax treaty between the
United States and the Cayman Islands.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As discussed in Part&nbsp;I, Item&nbsp;1, we were subject in the Cayman Islands to a
stamp tax when our shares are transferred. 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 during the period
1994 through April&nbsp;10, 2003.


<P align="center" style="font-size: 10pt">25
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="108"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 6. SELECTED FINANCIAL DATA</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of a management decision we have voluntarily adopted
accounting principles generally accepted in the United States of America
(&#147;US-GAAP&#148;) effective January&nbsp;1, 2000. Previously, annual financial statements
were prepared in accordance with International Accounting Standards (&#147;IAS&#148;).
As a result all prior periods&#146; financial information presented in the selected
financial data have been prepared in accordance with &#147;US-GAAP&#148;.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements include the accounts of the
Company&#146;s wholly-owned subsidiaries Cayman Water Company Limited, Belize Water
Limited, Ocean Conversion (Cayman) Limited, DesalCo Limited, DesalCo (Barbados)
Ltd, and its majority owned subsidiary Waterfields Company Limited. The
operating results of Ocean Conversion (Cayman) Limited, DesalCo Limited,
DesalCo (Barbados) Ltd. have been included in the consolidated financial
statements effective February&nbsp;1, 2003. The operating results of Waterfields
Company Limited have been included in the financial statements effective August
1, 2003. All inter-company balances and transactions have been eliminated.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth below is selected financial data based upon our consolidated
financial statements. The table contains information, expressed in US dollars,
derived from our audited consolidated financial statements for the five-year
period ended December&nbsp;31, 2003. This selected financial data should be read in
conjunction with the more detailed financial statements and related notes
thereto contained elsewhere in this Annual Report. The audited consolidated
financial statements for the years ended December&nbsp;31, 2000 and 1999 and
accountant&#146;s reports thereon are not included in this Annual Report.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="90%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="19"><B>YEAR ENDED DECEMBER 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2000</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1999</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Statement of Income Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,054,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,154,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,248,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,795,751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,936,118</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net Income (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,404,820</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,569,717</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Balance Sheet Data:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Total Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,562,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,507,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,721,178</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,845,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,431,321</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Long Term Debt Obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,633,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,074,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,213,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,131,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,926,786</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Redeemable preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,270</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Dividends Declared Per Share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Basic Earnings Per Share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Based on Number of Shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,917,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,969,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,897,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,532,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,044,293</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Diluted Earnings Per Share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Based on Weighted Number of Shares</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,037,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,087,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,999,691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,616,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,188,048</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Net Income represents income after a cumulative change in
accounting principle in 1999 of $117,576 as Statement of Position 98-5
&#147;Reporting on the Costs of Start-Up Activities&#148; requires start up costs
to be expensed as incurred rather than deferred.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">26
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<A name="109"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 7. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>



<P align="left" style="font-size: 10pt"><B>Overview</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our objective is to provide water services in areas where the supply of
potable water is scarce and where the use of RO technology to produce potable
water is economically feasible. By focusing on this market, we believe that we
can provide a superior financial return to our investors. To increase share
value and maintain dividend payouts in accordance with current company policy,
we need to expand our revenues by developing new business opportunities both
within our current service areas, and in new areas. We need to maintain our
high operating efficiencies by adhering to our strict equipment maintenance and
water loss mitigation programs in order to achieve gross profit margins between
40% and 45%. We further believe that many Caribbean basin and adjacent
countries, while being water scarce, also present opportunities for operation
of our plants in limited regulatory settings which are less restrictive than
the highly regulated markets of North America, which promotes cost effective
operation of our equipment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business operations and activities after our acquisitions in February
2003, are conducted in five countries: the Cayman Islands, Belize, Barbados,
the British Virgin Islands and the Bahamas. The recent acquisitions increase
our daily water production capacity in the Cayman Islands and the Bahamas and
expand our geographic presence to include Barbados and the British Virgin
Islands.


<P align="center" style="font-size: 10pt">Operations Before and After Recent Acquisitions


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="32%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" colspan="9"><B>Operations Before Recent Acquisitions</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="9"><B>Operations After Recent Acquisitions</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Location</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Plants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Capacity*</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Location</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Plants</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Capacity*</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cayman Islands
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cayman Islands
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bahamas
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bahamas
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Belize
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Belize
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0.4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Barbados
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">British Virgin Islands
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Total
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Total
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10.9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*Million U.S. gallons of water per day.


<P align="left" style="font-size: 10pt"><B>Cayman Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have been operating our business on Grand Cayman Island since 1973 and
have been using RO technology to convert seawater to potable water since 1989.
There is a limited natural supply of fresh water on the Cayman Islands. We
currently have an exclusive license from the Cayman Islands government to
process potable water from seawater and then sell and distribute that water by
pipeline to Seven Mile Beach and West Bay, Grand Cayman. Prior to our
acquisition of Ocean Conversion (Cayman) Limited, our Cayman Islands operations
consisted of three reverse osmosis seawater conversion plants in Grand Cayman:
the Governor&#146;s Harbour plant, the West Bay plant and the Britannia plant. The
combined capacity of these plants is 2.4&nbsp;million U.S. gallons per day. Our
pipeline system in the Cayman Islands covers the Seven Mile Beach and West Bay
areas of Grand Cayman and consists of approximately 67 miles of polyvinyl
chloride pipe. Retail water sales in Grand Cayman are made within our licensed
area


<P align="center" style="font-size: 10pt">27
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">to approximately 3,300 customers. During 2003, we supplied approximately 543
million U.S. gallons of water to our Retail water customers in Grand Cayman.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our recent acquisition of Ocean Conversion (Cayman)
Limited, we now operate an additional three reverse osmosis seawater conversion
plants in Grand Cayman with a total installed capacity of 2.9&nbsp;million U.S.
gallons per day. Ocean Conversion (Cayman) Limited provides water on a take or
pay basis to the Water Authority-Cayman, a government regulatory agency, under
various licenses and agreements. During 2003, we supplied approximately 646
million U.S. gallons of water to our Bulk water customer in Grand Cayman.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DesalCo Limited provides management, engineering and construction services
for desalination projects and is the exclusive agent for sales of DWEER&#153; energy
recovery systems for desalination plants in the Caribbean basin for the next
seven years. DesalCo Limited, which is recognized by suppliers as an original
equipment manufacturer, also acts as the purchasing agent for all companies
affiliated with our company.


<P align="left" style="font-size: 10pt"><B>Belize</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Belize operation, which was acquired on July&nbsp;21, 2000, consists of one
reverse osmosis seawater conversion plant on Ambergris Caye, Belize, Central
America, which is capable of producing 420,000 U.S. gallons per day. We sell
water to one customer, Belize Water Services Limited, which then distributes
the water through its own distribution system to residential, commercial and
tourist properties on Ambergris Caye. During 2003, we supplied approximately
100&nbsp;million U.S. gallons of water to our Bulk water customer in Belize.


<P align="left" style="font-size: 10pt"><B>Bahamas</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to our acquisition of operational control of Waterfields Company
Limited, our Bahamas operations consisted of one reverse osmosis seawater
conversion plant in Bimini, Bahamas. Our Bimini plant is capable of producing
115,000 U.S. gallons per day and provides potable water to Bimini Sands Resort
and to the Bimini Beach Hotel. During 2003, we supplied approximately 3
million U.S. gallons of water to our retail water customer in Bimini, Bahamas.
We expect the demand for water from our plant in Bimini to increase as
additional phases are completed at the Bimini Sands development.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our acquisition of Waterfields Company Limited, we acquired
an additional reverse osmosis seawater conversion plant in the Bahamas.
Waterfields produces potable water from one reverse osmosis seawater conversion
plant in New Providence and has a total installed capacity of 2.6&nbsp;million U.S.
gallons per day. Waterfields Company Limited provides water on a take or pay
basis to the Water and Sewerage Corporation of the Bahamas under a long-term
build, own and operate supply agreement. During 2003, we supplied
approximately 247&nbsp;million U.S. gallons of water to our Bulk water customer in
the Bahamas.


<P align="left" style="font-size: 10pt"><B>Barbados</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The recently acquired Barbados operation consists of a service agreement
to operate one reverse osmosis seawater conversion plant with a capacity of 1.3
million U.S. gallons per day which is owned by Sandy Lane Resort. This plant
is operated by DesalCo (Barbados) Ltd., the wholly owned subsidiary of DesalCo
Limited. The plant provides water to the Sandy Lane Resort, and during 2003,
we produced approximately 261&nbsp;million U.S. gallons.


<P align="center" style="font-size: 10pt">28
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>British Virgin Islands</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recently entered the market in the British Virgin Islands when our
wholly-owned subsidiary, DesalCo Limited acquired an equity position and shared
management control of Ocean Conversion (BVI)&nbsp;Ltd., which produces potable water
from one reverse osmosis seawater conversion plant in Tortola, British Virgin
Islands. The plant has a total installed capacity of 1.7&nbsp;million U.S. gallons
per day. Ocean Conversion (BVI)&nbsp;Ltd. provides water to the Department of Water
and Sewerage of the Ministry of Communications and Works of the Government of
the British Virgin Islands. During 2003, we supplied approximately 297&nbsp;million
U.S. gallons of water to our bulk water customer in the British Virgin Islands.


<P align="left" style="font-size: 10pt"><B>Critical Accounting Policies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of our consolidated 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, intangible
assets and goodwill. Our company bases its 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 under
different assumptions or conditions. 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 company&#146;s consolidated financial
statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable: 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 record 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill and other intangible assets: Goodwill represents the excess costs
over fair value of the assets of an acquired business. Goodwill and intangible
assets acquired in a business combination accounted for as a purchase and
determined to have an indefinite useful life are not amortized, but are tested
for impairment at least annually in accordance with the provisions of SFAS No.
142. SFAS No.&nbsp;142 also requires that intangible assets with estimatable 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
Company periodically evaluates the possible impairment of goodwill. Management
identifies its reporting units and determines the carrying value of each
reporting unit by assigning the assets and liabilities, including the existing
goodwill and intangible assets, to those reporting units. The Company
determines the fair value of each reporting unit and compares it to the
carrying amount of the reporting unit. To the extent the carrying amount of
the reporting unit exceeds the fair value of the reporting unit, the Company is
required to perform the second step of the impairment test, as this is an
indication that the reporting unit goodwill may be impaired. In this step, the
Company compares the implied fair value of the reporting unit goodwill with the
carrying amount of the reporting unit goodwill. The implied fair value of
goodwill is determined by allocating the fair value of the reporting unit to
all the assets (recognized and unrecognized) and liabilities of the reporting
unit in a manner similar to a purchase price allocation, in accordance with
SFAS No.&nbsp;141, &#147;Business Combinations&#148;. The residual fair value after this
allocation is the implied fair value of the reporting unit goodwill. If the
implied fair value is less than its carrying amount, the impairment loss is
recorded. Our annual impairment tests resulted in no goodwill impairment.


<P align="center" style="font-size: 10pt">29
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Quarterly Results of Operations</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table presents unaudited quarterly results of operations for
the eight quarters ended December&nbsp;31, 2003. We believe that all necessary
adjustments, consisting only of normal recurring adjustments, have been
included in the amounts started below to present fairly such quarterly
information.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>For the year ended December 31, 2003</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>First</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Second</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Third</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fourth</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,018,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,750,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,004,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,280,998</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,944,686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,351,485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,081,866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,999,887</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,017,998</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,013,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,121,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,024,744</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Diluted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>For the year ended December 31, 2002</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>First</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Second</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Third</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fourth</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Quarter</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,184,805</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,291,929</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,915,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,762,889</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,518,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,494,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,201,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,058,245</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">926,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">811,259</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">604,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">233,782</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Diluted earnings per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.06</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>Revenue</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue is comprised of retail water sales via pipeline to individual
customers, bulk water sales to large commercial or municipal customers, and
fees for management and engineering services.


<P align="left" style="font-size: 10pt"><B>Expenses</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses include the cost of sales (&#147;direct expenses&#146;&#146;) and general and
administrative expenses (&#147;indirect expenses&#148;). Direct expenses include royalty
payments, electricity and chemicals expenses, production equipment and facility
depreciation costs, equipment maintenance expenses, operational staff costs and
amortization of intangible assets. Indirect 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, amortization of bank fees and legal and professional
fees. There are no income taxes in the Cayman Islands, and we are currently
exempt from taxes in the British Virgin Islands and Belize. We pay an annual
business license fee in the Bahamas. We pay income tax in Barbados.


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<P align="left" style="font-size: 10pt"><B>Results of Operations<BR>
Year Ended December&nbsp;31, 2003 Compared to Year Ended December&nbsp;31, 2002</B>


<P align="left" style="font-size: 10pt"><B>Revenue</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue increased by 56.8% from $12,154,689 to $19,054,205 for the
year ended December&nbsp;31, 2003 when compared to the same period in 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from our retail water (&#147;Retail&#148;) operations increased by 2.2% from
$10,683,592 to $10,918,151 for the year ended December&nbsp;31, 2002 and 2003,
respectively. Sales in our primary market in the Cayman Islands were generally
flat during the year, although we did experience an increase in sales of 13.2%
during the fourth quarter of 2003 over the same period in the prior year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from our bulk water (&#147;Bulk&#148;) operations increased by 378.9% from
$1,471,097 to $7,045,761 for the year ended December&nbsp;31, 2002 and 2003,
respectively. This increase was due to our recent acquisitions of Ocean
Conversion (Cayman) Limited and Waterfields Company Limited and was slightly
offset by a 15.3% decrease in our bulk water sales in Belize for the year ended
December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from services (&#147;Services&#148;) was $1,090,293 for the year ended
December&nbsp;31, 2003. All Services revenues pertain to our recent acquisition of
DesalCo Limited and its wholly-owned subsidiary DesalCo (Barbados) Ltd.


<P align="left" style="font-size: 10pt"><B>Other Income (Expenses)</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expenses)&nbsp;changed from an expense of $52,198 to income
of $182,748 for the year ended December&nbsp;31, 2003 when compared to the same
period in 2002. This increase was comprised of income and profit sharing from
our equity investment in Ocean Conversion (BVI)&nbsp;Ltd. and was offset by interest
expense related to the loan used to finance our recent acquisitions,
amortization of bank fees and the early repayment fees paid on our loan from
the European Investment Bank that was extinguished on June&nbsp;20, 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect loan interest costs to decrease because a portion of the
proceeds received from our completed equity offering was used to repay our
Scotiabank six-month term loan on July&nbsp;9, 2003 and we expect amortization of
bank fees to decrease because we have fully amortized all fees relating to our
bridge financing that was used to complete our recent acquisition..


<P align="left" style="font-size: 10pt"><B>Cost of Sales</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales increased by 55.1% from $6,882,177 to $10,676,281 for
the year ended December&nbsp;31, 2003 when compared to the same period in 2002.
During this same period, our total revenue increased by 56.8%.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales of our Retail operations decreased by 14.6% from $5,824,815
to $4,972,300 for the year ended December&nbsp;31, 2002 and 2003, respectively,
while our Retail revenue increased by 2.2% for the year ended December&nbsp;31,
2003. This decrease in cost of sales resulted primarily from the cancellation
of the Governor&#146;s Harbour plant operating contract on February&nbsp;7, 2003, which
decreased our water purchase expense. We expect our Retail cost of sales going
forward to remain at this lower percentage of Retail revenues.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales of our Bulk operations increased by 393.0% from $1,057,362
to $5,212,388 for the


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<P align="left" style="font-size: 10pt">year ended December&nbsp;31, 2002 and 2003, respectively, while our Bulk
revenue increased by 378.9% for the same period. This increase in cost of
sales resulted almost entirely from the operating costs of Ocean Conversion
(Cayman) Limited and Waterfields Company Limited, which were consolidated in
our accounts from February&nbsp;1, 2003 and August&nbsp;1, 2003 respectively. It also
includes the amortization costs of the intangible assets that were recognized
in conjunction with our recent acquisition of Ocean Conversion (Cayman)
Limited.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales of our Services reporting segment were $491,593 for the year
ended December&nbsp;31, 2003. These relate to our recent acquisition of DesalCo
Limited and its wholly-owned subsidiary DesalCo (Barbados) Ltd. and include the
amortization cost of the intangible assets that was recognized in conjunction
with our recent acquisition of DesalCo Limited and DesalCo (Barbados) Ltd.


<P align="left" style="font-size: 10pt"><B>Gross Profit</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overall gross profit margin increased from 43.4% to 44.0% for the year
ended December&nbsp;31, 2003 when compared to the same period in 2002, for the
reasons explained below.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin for our Retail operations increased from 45.5% to
54.5% for the year ended December&nbsp;31, 2003 when compared to the same period in
2002. The primary reason for this increase is that our Retail cost of sales
decreased as a result of the cancellation of the Governor&#146;s Harbour plant
operating contract.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin for our Bulk operations decreased from 28.1% to 26.0%
for the year ended December&nbsp;31, 2003 when compared to the same period in 2002.
In 2003, we incurred additional direct costs in our Belize Bulk operations for
leasing a temporary potable Reverse Osmosis unit which we operated to meet our
customer&#146;s water demand while we carried out maintenance on our permanent
Reverse Osmosis units. We ceased using the plant on September&nbsp;30, 2003 and we
do not expect to incur costs for this plant beyond April&nbsp;2004. We generally
sell water to our Bulk customers at a lower profit margin than to our Retail
customers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin for our Services reporting segment was 54.9% for the
year ended December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt"><B>General and Administrative Expenses</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
general and administrative expenses increased by 64.1% from
$2,644,004 to $4,339,524 for the year ended December&nbsp;31, 2003 when compared to
the same period in 2002. General and administrative expenses were at 21.8% and
22.8% of total revenue for the year ended December&nbsp;31, 2002 and 2003,
respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses related or allocated to our Retail
operations increased by 11.0% from $2,418,378 to $2,684,216 for the year ended
December&nbsp;31, 2002 and 2003, respectively. This increase is comprised primarily
of higher insurance premiums, office rent and staff costs.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses related or allocated to our Bulk
operations increased by 547.5% from $225,626 to $1,460,883 for the year ended
December&nbsp;31, 2002 and 2003, respectively. This increase is almost entirely the
result of the inclusion of the general and administrative expenses of Ocean
Conversion (Cayman) Limited and Waterfields Company Limited. We expect to
reduce general and administrative expenses as we continue to assimilate the
administrative functions of our recent acquisitions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses related or allocated to our Services
reporting segment were


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<P align="left" style="font-size: 10pt">$194,425 for the year ended December&nbsp;31, 2003. This is entirely the
result of our recent acquisitions of DesalCo Limited and its wholly-owned
subsidiary DesalCo (Barbados) Ltd. We expect to reduce general and
administrative expenses as we continue to assimilate the administrative
functions of our recent acquisitions.


<P align="left" style="font-size: 10pt"><B>Net Income</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income increased by 62.1% from $2,576,310 to $4,177,081 for the year
ended December&nbsp;31, 2003 when compared to the same period in 2002. We expect
future net income to be positively affected because; interest expense decreased
after we repaid the bridge financing using the proceeds from our recent equity
offering and we fully amortized the bank fees related to this bridge financing
on July&nbsp;9, 2003 and we anticipate that general and
administrative expenses will decrease as we
continue to assimilate our recent acquisitions.


<P align="left" style="font-size: 10pt"><B>Dividends</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;31, 2003, we paid a dividend of $0.105 to shareholders of
record on December&nbsp;31, 2002; on April&nbsp;30, 2003, we paid a dividend of $0.105 to
shareholders of record on March&nbsp;31, 2003; on July&nbsp;31, 2003, we paid a dividend
of $0.105 to shareholders of record on June&nbsp;30, 2003 and on October&nbsp;31, 2003,
we paid a dividend of $0.105 to shareholders of record on September&nbsp;30, 2003.
We have consistently paid dividends to owners of our ordinary and redeemable
preferred shares since we began declaring dividends in 1985. Our board of
directors has established a policy, but not a binding obligation, that we will
seek to maintain a dividend pay out ratio in the range of 50% to 60% of net
income. While this policy is subject to modification by our board of
directors, we expect to continue increasing our dividends, if our earnings
grow. Our payment of any future cash dividends, however, will depend upon our
earnings, financial condition, capital demand and other factors, including the
condition in our new loan agreement effective February&nbsp;7, 2003, with Scotiabank
(Cayman Islands) Ltd. that dividends be paid only from current cash flows.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;10, 2004, our board of directors declared an interim cash
dividend of $0.115 per share, an increase of approximately 10%, payable on
April&nbsp;30, 2004 to shareholders of record on March&nbsp;31, 2004.


<P align="left" style="font-size: 10pt"><B>Year Ended December&nbsp;31, 2002 Compared to Year Ended December&nbsp;31, 2001</B>



<P align="left" style="font-size: 10pt"><B>Revenue</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue increased by 8.1% from $11,248,105 to $12,154,689 for the
years ended December&nbsp;31, 2001 and 2002, respectively. Total water sales
increased as a result of several factors detailed below.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from our retail water (&#147;Retail&#148;) operations added $666,262 to
retail revenue for the year ended December&nbsp;31, 2002, which is an increase of
6.7% over the prior year and represents 73.5% of the total increase in
revenues. The number of U.S. gallons we sold during the year ended December
31, 2002 increased by 10.3% over the prior year. This is the result of
supplying 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 during the year ended December
31, 2002.
<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from our bulk water (&#147;Bulk&#148;) operations added $240,322 to water
sales for the year ended December&nbsp;31, 2002, which is an increase of 19.5% over
the prior year and represents 26.5% of the


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<P align="left" style="font-size: 10pt">total increase in revenue. In June&nbsp;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 for the year
ended December&nbsp;31, 2002 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% during
certain periods in August and September&nbsp;2001.


<P align="left" style="font-size: 10pt"><B>Other Income (Expenses)</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expenses)&nbsp;changed from income of $125,645 to an
expense of $52,198 for the year ended December&nbsp;31, 2002 when compared to the
same period in 2001. 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 the Hyatt Grand Cayman Resort and Britannia golf course.


<P align="left" style="font-size: 10pt"><B>Cost of Sales</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of 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 8.1% for the year ended December&nbsp;31, 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales of our Retail operations increased by $627,522 for the year
ended December&nbsp;31, 2002, which is an increase of 12.1%, compared to an increase
of 6.7% in water sales revenue, over the prior year and represents 81.2% of the
total increase in cost of water sales. The cost of water sales increased as a
result of direct costs incurred to operate the Britannia plant in the Cayman
Islands, 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) Limited. 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)
Limited.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of sales of our Bulk operations increased by $145,538 for the year
ended December&nbsp;31, 2002, which is an increase of 16.0%, compared to a 19.5%
increase in bulk revenues over the prior year and represents 18.8% of the total
increase in total cost of sales. During the year ended December&nbsp;31, 2002, we
completed scheduled preventive maintenance on a major piece of equipment in
Belize, which increased our cost of water sales. Also increasing our cost of
water sales in 2002 were additional repairs and maintenance on the existing
reverse osmosis equipment. During the year ended December&nbsp;31, 2002, 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&nbsp;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 per 1,000
U.S. gallons.


<P align="left" style="font-size: 10pt"><B>Gross Profit</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overall gross profit margins decreased from 45.7% to 43.4% for the years
ended December&nbsp;31, 2001 and 2002, respectively.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margins for our Retail operations decreased from 48.1% to
45.5% 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 in the Cayman Islands 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 not able to acquire water from our lowest priced source
as a result of the minimum water purchase obligation we have with Ocean
Conversion (Cayman) Limited.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margins for our Bulk operations increased from 25.9% to 28.1%
for the years ended December&nbsp;31, 2001 and 2002, respectively. The reason for
the increase in the gross profit margin is the increased revenues from the 20%
increase in the number of U.S. gallons sold over the prior year were greater
than in increase in cost of sales 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.


<P align="left" style="font-size: 10pt"><B>General and Administrative Expenses</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total general and administrative expenses increased by 5.8% from
$2,500,060 to $2,644,004 for the years ended December&nbsp;31, 2001 and 2002,
respectively. Indirect expenses were at 22.2% and 21.8% of total revenue for
the year ended December&nbsp;31, 2001 and 2002, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses related or allocated to our Retail
operations increased by $109,140 for the year ended December&nbsp;31, 2002, which is
an increase of 4.7% over the prior year and represents 75.8% of the total
increase in general and administrative 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 10-K review together with
increased insurance premiums on our commercial and directors and officers
insurance. Stock compensation costs increased $266,773 for the year ended
December&nbsp;31, 2002 as a result of an increase in our shares price during the
last fiscal quarter. Unanticipated professional fees relating to our December
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 for the year ended December&nbsp;31, 2002 compared to the
prior year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses related or allocated to our Bulk
operations increased by $34,804 for the year ended December&nbsp;31, 2002, which is
an increase of 18.2% over the prior year and represents 24.2% of the total
increase in indirect expenses. During the year ended December&nbsp;31, 2002, we had
additional costs as a result of higher insurance premiums and increased costs
to repatriate funds.


<P align="left" style="font-size: 10pt"><B>Net Income</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt"><B>Dividends</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2001, we increased our per share dividend from $0.10 to $0.105
per quarter and have paid dividends in this amount during the year ended
December&nbsp;31, 2002


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<P align="left" style="font-size: 10pt"><B>Liquidity and Capital Resources</B>



<P align="left" style="font-size: 10pt"><B>Overview</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2003, we generated cash primarily from the
sale of our shares and through loans and credit facilities and to a lesser
extent, from our operations in the Cayman Islands, the Bahamas, Belize and
Barbados and from dividends and profit sharing rights from our equity
investment in the British Virgin Islands. Cash flow is dependent upon the
timely receipt of customer payments, 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.


<P align="left" style="font-size: 10pt"><B>Operating Activities</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash generated from operating activities for the years ended December&nbsp;31,
2002 and 2003 was $4,115,090 and $6,506,826, 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. We believe that our
administrative staff will be able to manage all our combined operations so that
our indirect costs will not increase in proportion to revenues.


<P align="left" style="font-size: 10pt"><B>Investing Activities</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in investing activities during the years ended December&nbsp;31, 2002
and 2003 was $3,568,723 and $29,645,995, respectively. Cash in the amount of
$28,917,513 was used for our recent acquisitions of DesalCo Limited, its wholly
owned subsidiary DesalCo (Barbados) Limited, Ocean Conversion (Cayman) Limited,
Waterfields Company Limited and our equity investment in Ocean Conversion (BVI)
Ltd. Cash of $1,874,286 was also used in the construction of three 1.0&nbsp;million
U.S. gallon potable water storage tanks at our Governors Harbour plant to
replace our previous 2.0&nbsp;million U.S. gallon fabric-lined storage tanks.
During the same period in 2002, our investing activities consisted of
expenditures for new property, plant and equipment, including $1,500,000 used
to purchase the Britannia reverse osmosis plant in the Cayman Islands.


<P align="left" style="font-size: 10pt"><B>Financing Activities</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash used in financing activities for the year ended December&nbsp;31, 2002 was
$494,509 and cash provided by financing activities for the year ended December
31, 2003 was $30,807,789, respectively. On February&nbsp;7, 2003, we utilized a
credit facility with Scotiabank (Cayman Islands) Ltd. to complete our recent
acquisitions and repay our debts with the Royal Bank of Canada and the European
Investment Bank. During the year ended December&nbsp;31, 2003, our primary
financing activities were to draw down $28,056,126 from our Scotiabank
facilities and $18,373,814 of equity through our secondary share offering.
From these amounts $1,687,500 was used to repay our Royal Bank of Canada credit
facility, $905,384 was used to fully repay our European Investment Bank loan,
$869,091 was used for financing fees and $12,411,606 was repaid on our
Scotiabank bridge financing facilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended December&nbsp;31, 2002, our primary financing activity
was a draw down of our Royal Bank of Canada 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 and officers
who exercised stock


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<P align="left" style="font-size: 10pt">options. These were offset by the payment of our quarterly dividends and
principal payments on our term loans. During the year ended December&nbsp;31, 2003,
no shares were repurchased. 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 redeemable preference shares from a former employee at an
average price of $5.47. All of the shares repurchased were cancelled in
accordance with Cayman Islands&#146; law.


<P align="left" style="font-size: 10pt"><B>Material Commitments for Capital Expenditures and Contingencies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summaries our contractual obligations as at December
31, 2003:

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    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Less Than</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1&#150;3</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>3&#150;5</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After 5</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>1 Year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Years</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,396,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,808,555</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,159,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,714,288</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">714,279</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Operating leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">481,100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">113,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">357,282</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">205,686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">146,809</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2003, we had committed approximately $600,000 for capital
expenditures for the purchase, site preparation and construction of one water
storage tank at our Ambergris Caye, Belize plant. We intend to finance these
projects using cash from operations


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;7, 2003, we entered into a loan agreement with Scotiabank
(Cayman Islands) Ltd. to finance the recent acquisitions and refinance our
existing debt. The facilities are comprised of the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$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 5.0%</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$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 and depreciation. The present interest rate is 2.64%.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$17.1&nbsp;million six-month term loan bearing interest on the same
basis as the seven-year term loan. This facility was fully repaid by
the proceeds from our equity offering on July&nbsp;9, 2003</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have used the proceeds from these facilities to refinance our existing
debt, for working capital and to finance our recent acquisitions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2003, we have an outstanding balance of $17,857,143 on
our Scotiabank loan facilities. 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 of subsidiaries and investment in equity we acquired in our
recent acquisitions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (Cayman Islands) Ltd. or in the event of default under the loan
agreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have guaranteed to Scotiabank 50% of the Ocean Conversion (BVI)&nbsp;Ltd.
loan of $880,056.


<P align="center" style="font-size: 10pt">37
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<P align="left" style="font-size: 10pt">The Scotiabank loan is repayable in 6 equal semi-annual installments of
$125,000 with the balance of principal due May&nbsp;31, 2006, bearing interest at
3-month LIBOR plus 1.5%.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our acquisition of interests in Waterfields Company
Limited, we guaranteed the performance of Waterfields Company Limited to the
Water &#038; Sewerage Corporation of the Bahamas in relation to the water supply
contract between Waterfields Company Limited and the Water &#038; Sewerage
Corporation.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through a performance and operation bond, the Royal Bank of Canada,
Nassau, has made a guarantee in the amount of $1,910,775 to the Water &#038;
Sewerage Corporation of The Bahamas that we shall duly perform and observe all
terms and provisions pursuant to the contract between the Water &#038; Sewerage
Corporation of The Bahamas and us. In the event of our default on our
obligations, the Royal Bank of Canada, Nassau, shall satisfy and discharge any
damages sustained by the Water &#038; Sewerage Corporation of The Bahamas up to the
guaranteed amount.


<P align="left" style="font-size: 10pt"><B>Impact of Inflation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of our Cayman Islands license and our water sales
agreements in Belize, Bahamas, British Virgin Islands and Barbados, our water
rates are automatically adjusted 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.


<P align="left" style="font-size: 10pt"><B>Exchange Rates</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The official exchange rate for conversion of United States dollars into
Cayman Islands dollars, as determined by the Cayman Islands Monetary Authority,
has been fixed since 1974 at U.S. $ 1.00 = CI$ 0.83.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.$ 1.00 = BZE$ 2.00.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.$ 1.00 = BAH$ 1.00.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The official fixed exchange rate for conversation of United States dollars
into Barbadian dollars as determined by the Central Bank of Barbados has been
fixed since 1975 at U.S.$ 1.00 = BDS$ 2.00.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The British Virgin Islands&#146; currency is United States dollars.


<P align="center" style="font-size: 10pt">38
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<P align="left" style="font-size: 10pt"><B>Forward-Looking Statements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We discuss in this Annual Report 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 our company and our industry in
general.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The forward-looking statements in this Annual Report reflect what we
currently anticipate will happen. What actually happens could differ materially
from what we currently anticipate will happen. We are not promising to make any
public announcement when we think forward looking statements in this Annual
Report are no longer accurate whether as a result of new information, what
actually happens in the future or for any other reason.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Important matters that may affect what will actually happen include, but
are not limited to: tourism and weather conditions in the areas we service; our
ability to manage, integrate and realize the benefits from our recent
acquisitions; scheduled new construction within our operating areas; the
economies of the U.S. and the areas we service; regulatory matters;
availability of capital to repay a substantial portion of our bank debt and for
expansion of our operations; and other factors described in the &#147;Risk Factors&#148;
section below as well as elsewhere in this Annual Report.


<P align="left" style="font-size: 10pt"><B>Risk Factors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have described for you below some risks which may materially and
adversely affect our business, financial condition or results of operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>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. </B>In the Cayman Islands, we
presently operate as a public water utility under an exclusive license
originally issued to us in December&nbsp;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 the government
will renew our license or that we will be able to negotiate a new license on
satisfactory terms. We would retain ownership of our production infrastructure
and substantially all of our distribution infrastructure if our license were
not renewed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We rely on water supply agreements with our customers in the Cayman
Islands, Belize, the Bahamas and Barbados which, upon their expiration, may not
be renewed or may be renegotiated on less favorable terms to us. </B>We presently
operate as bulk water suppliers under water sales agreements in the Cayman
Islands with our customer the Water Authority-Cayman, in Belize with our
customer, the Belize Water Services Limited, in the Bahamas with our customers,
the Water &#038; Sewerage Corporation and South Bimini International Ltd. and in
Barbados with our customer Sandy Lane Properties Ltd. Upon expiration, these
agreements may not be renewed or may be renewed on less favorable terms.


<P align="center" style="font-size: 10pt">39
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Termination of our exclusive distributorship agreement with DWEER
Technology Ltd. would eliminate one competitive advantage that we presently
have over our competition in obtaining new plants in the Caribbean basin. </B>Our
wholly-owned subsidiary, DesalCo Limited, is currently the exclusive
distributor in the Caribbean basin for the DWEER&#153; system produced by DWEER
Technology Ltd. for use in reverse osmosis seawater desalination plants. 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&#153; 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The British Virgin Islands Water and Sewerage Department has taken the
position that our water supply agreement is operating on a month-to month
basis. </B>We have accepted the position of the British Virgin Islands Water and
Sewerage department that Ocean Conversion (BVI)&nbsp;Ltd.&#146;s existing water supply
arrangement the British Virgin Islands is in force on a month to month basis
until negotiations for a definitive agreement are finalized. In May&nbsp;1999, the
British Virgin Islands government did not make a required buyout payment of
$1.42&nbsp;million for the Baughers Bay plant and has taken the position that the
water supply agreement continues on a month-to-month basis. Thus, it is
possible, but in our opinion unlikely, that the government could cease
purchasing water at any time. While Ocean Conversion (BVI)&nbsp;Ltd. is currently
attempting to negotiate a new water supply agreement, there is no guarantee
such agreement will be obtained, or if obtained, would be on terms favorable to
Ocean Conversion (BVI)&nbsp;Ltd. Cessation of the government water purchases, or
failure to negotiate a new agreement on terms favorable to us, could have an
adverse effect on our results of operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We may not be able to successfully integrate the new assets that we
acquired in the recent acquisitions. </B>Increasing the size of our company 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 the acquisitions
will not have a negative impact on our business and results of operation.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The costs of integrating our new assets may affect our ability to pay
dividends. </B>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 the new assets into our company,
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 flows.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our business is affected by tourism, weather conditions, the economies of
the locations where we provide service and the U.S. and European economies.</B>
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.


<P align="center" style="font-size: 10pt">40
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<P align="left" style="font-size: 10pt">After the events of September&nbsp;11, 2001, tourism decreased in the Cayman Islands
and is only gradually returning to historical levels. Additional terrorist
activities in the United States, Europe or in 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We may have difficulty accomplishing our growth strategy within and
outside of our current operating areas. </B>Even though we have an exclusive
license for our present operating area in the Cayman Islands and supply
agreements in the Cayman Islands, the Bahamas, the British Virgin Islands,
Barbados and Belize, our ability to expand our operating areas is often subject
to the approval of the respective governments in each location.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, part of our long-term growth strategy is to expand our water
supply and distribution operations to other locations outside of the Cayman
Islands, the Bahamas, Barbados, the British Virgin Islands and Belize. Our
expansion into new locations depends on our ability to obtain necessary
permits, licenses and approvals to operate in new territories. We may not
obtain these necessary permits, licenses and approvals in a timely and cost
efficient manner, or at all.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our expansion to territories outside of our current operating areas
includes significant risks, including, but not limited to, the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>regulatory risks, including government relations difficulties,
local regulations and currency controls;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks related to operating in foreign countries, including
political instability, reliance on local economies, environmental or
geographical problems, shortages of materials, immigration restrictions
and skilled labor;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks related to development of new operations, including assessing
the demand for water, engineering difficulties and inability to begin
operations as scheduled; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks relating to greater competition in these new territories,
including the ability of our competitors to gain or retain market share
by reducing prices.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 these new operations will not negatively affect our overall
profitability.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We do not own a majority interest in Ocean Conversion (BVI)&nbsp;Ltd. </B>We
recently acquired 50% of the voting shares of Ocean Conversion (BVI)&nbsp;Ltd. which
allows us to appoint three of the six directors of that company. Sage Water
Holdings (BVI)&nbsp;Limited, which owns the remaining 50% of the voting shares, is
entitled to appoint the remaining three directors. If there is a tied 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 have to share the management of Ocean Conversion (BVI)
Ltd. with Sage Water Holdings (BVI)&nbsp;Limited. Although we provide management
and engineering services to Ocean Conversion (BVI)&nbsp;Ltd. we do not fully control
the operations of the company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our operations in the Caribbean could be harmed by hurricanes. </B>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


<P align="center" style="font-size: 10pt">41
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">returned to the status quo before the hurricane. We do not insure our
underground water distribution system on the Cayman Islands.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Contamination to our processed water may cause disruption in our services
and adversely affect our revenues. </B>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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in the wake of the September&nbsp;11, 2001 terrorist attacks in
New York, Washington, D.C. and Pennsylvania, we have taken steps to heighten
employee awareness of threats to our water supply. While we are not aware of
any specific threats to our facilities, operations or supplies, we have and
will continue to take security precautions to protect our facilities,
operations and 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 an adverse effect on the results of our operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We could be negatively affected by potential government actions and
regulations. </B>Any government that regulates our operations may issue
legislation or adopt new regulations, including but not limited to:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>restricting foreign ownership of our company;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>providing for the expropriation of our assets by the government;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>providing for nationalization of public utilities by the government;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>providing for different water quality standards;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting in unilateral changes to or renegotiation of our exclusive licenses; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>causing currency exchange fluctuations or devaluations or changes in tax laws.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We rely heavily on the efforts of several key employees. </B>Our success
depends upon the abilities of our executive officers. In particular, the loss
of the services of Jeffrey Parker, our Chairman of the Board, or Fredrick
McTaggart, our President and Chief Executive Officer, could be detrimental to
our operations and our continued success. Although Messrs.&nbsp;Parker and McTaggart
have entered into three-year employment agreements which may be extended every
year for an additional one-year term, we cannot guarantee that Mr.&nbsp;Parker or
Mr.&nbsp;McTaggart will continue to work for us during the term of their agreements.
Except for Messrs.&nbsp;Parker and F. McTaggart, none of our other employees have
entered into non-compete agreements with us.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Provisions in our articles of association and an option deed adopted by
our board of directors may discourage a change in control of our company and
may make it more difficult for you to sell your ordinary shares. </B>Our articles
of association include provisions which may discourage or prevent a change in
control of our company. For instance, our board of directors consists of three
groups. Each group serves a staggered term of three years before the directors
in the group are up for re-


<P align="center" style="font-size: 10pt">42
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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt">election. Also, our board of directors may refuse to register any transfer of
shares on our books for any reason.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also adopted an option deed, which is similar to a poison pill.
The option deed will discourage a change in control of our company by causing
substantial dilution to a person or group who attempts to acquire our company
on terms not approved by the board of directors. The option deed will expire
on July&nbsp;31, 2007.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of these provisions, which discourage or prevent an unfriendly
or unapproved change in control of our company, our shareholders may not have
an opportunity to sell their 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 purchase or otherwise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>There may be a risk of variation in currency exchange rates. </B>Although we
report our results in United States dollars, the majority of our revenue is
earned in Cayman Islands dollars, Belizean dollars, Bahamian dollars and
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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Service of process and enforcement of legal proceedings commenced against
us in the United States may be difficult to obtain. </B>Service of process on our
company and our directors and officers, fourteen out of sixteen 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 due 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="center" style="font-size: 10pt">43
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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</B>



<P align="left" style="font-size: 10pt"><B>Credit Risk</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not exposed to significant credit risk on retail customer accounts
in the Cayman Islands, and Bimini, Bahamas, 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. In
addition, the entire balance of our loan receivable is due from the Water
Authority-Cayman.


<P align="left" style="font-size: 10pt"><B>Interest Rate Risk</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2003, we had loans outstanding totaling $20,396,581,
all of which bear interest at various lending rates such as LIBOR, Cayman
Island&#146;s Prime Rate or Nassau Prime Rate. We are subject to interest rate risk
to the extent that any of these lending rates change.


<P align="left" style="font-size: 10pt"><B>Foreign Exchange Risk</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.



<P align="center" style="font-size: 10pt">44
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<DIV align="left">
<A name="111"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>CONSOLIDATED WATER CO. LTD.</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Independent Auditors&#146; Report </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Balance Sheet as at December&nbsp;31, 2003 and
2002 </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Income for each of the years
ended December&nbsp;31, 2003, 2002, and 2001 </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Stockholders&#146; Equity for each
of the years ended December&nbsp;31, 2003, 2002, and
2001</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Cash Flows for each of the
years ended December&nbsp;31, 2003, 2002, and
2001</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Notes to Consolidated Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Independent Auditors&#146; Report</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Balance Sheet as at December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Income for the year
ended December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Stockholders&#146; Equity for the year ended December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Consolidated Statement of Cash Flows for the
year ended December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Notes to Consolidated Financial Statements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">45
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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>Independent Auditors&#146; Report</B>



<P align="left" style="font-size: 10pt">The Board of Directors and Stockholders<BR>
Consolidated Water Co. Ltd


<P align="left" style="font-size: 10pt">We have audited the accompanying consolidated balance sheets of Consolidated
Water Co. Ltd. and subsidiaries (the &#147;Company&#148;) as of December&nbsp;31, 2003 and
2002, 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, 2003. 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.


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt">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, 2003 and 2002, and the results of
their operations and cash flows for each of the three years in the three-year
period ended December&nbsp;31, 2003, in conformity with accounting principles
generally accepted in the United States of America.



<P align="left" style="font-size: 10pt">George Town, Cayman Islands<BR>
April 7, 2004



<P align="center" style="font-size: 10pt">46
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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED BALANCE SHEETS</B><BR>
(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash and cash equivalents (Note 4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,236,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">568,304</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts receivable (Note 5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,859,496</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,406,947</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Inventory (Note 6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,546,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">388,131</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">596,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370,429</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">887,856</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Current portion of loans receivable (Note 7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,098,732</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,337,723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,621,667</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Loans receivable (Note 7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,194,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and equipment, net (Note 8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,662,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,253,646</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">505,793</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Investment in affiliates (Note 9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,034,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,450</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Intangible assets (Note 10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,431,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,619,874</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Goodwill (Note 11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,395,752</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">68,562,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,507,637</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Dividends payable (Note 12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">686,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">508,444</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts payable and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD align="right">2,072,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,143,850</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Current portion of long term debt (Note 13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,763,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">518,275</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,521,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,170,569</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt (Note 13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,633,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,074,609</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">136,235</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,507,439</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,381,413</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Minority Interest in Waterfields Company Limited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">806,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Redeemable preferred stock, $1.20 par value. Authorized 100,000 shares;
issued and outstanding 13,585 shares in 2003
and 19,740 shares in 2002 (Note 14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,688</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Class&nbsp;A common stock, $1.20 par value. Authorized 9,840,000 shares;
issued and outstanding 5,687,010 shares in 2003 and
3,993,419 shares in 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,824,412</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,792,103</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Class&nbsp;B common stock, $1.20 par value. Authorized 60,000 shares;
Issued and outstanding nil shares for 2003
and nil shares for 2002 (Note 14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Stock and options earned but not issued</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">424,841</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,773,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,354,395</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,612,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,531,197</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,248,527</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,126,224</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Commitments (Note 20)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total liabilities and stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">68,562,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25,507,637</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.



<P align="center" style="font-size: 10pt">47
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF INCOME</B><BR>
(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>For the year ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Retail water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,918,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,683,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,017,330</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bulk water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,045,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,471,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,230,775</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Services revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,090,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total revenue</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,054,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,154,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,248,105</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Retail cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,972,300</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,824,815</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,197,293</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bulk cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,212,388</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,057,362</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(911,824</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Service cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(491,593</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total cost of sales </B>(Note 15)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,676,281</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,882,177</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(6,109,117</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Gross profit</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,377,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,272,512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,138,988</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">General and administrative expenses (Note 15)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,339,524</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,644,004</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,500,060</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Income from operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,038,400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,628,508</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,638,928</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income (expenses)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">
Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82,334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,584</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,163,637</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(103,986</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(99,956</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">438,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,077</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,017</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Equity in earnings of affiliate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">826,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">182,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(52,198</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,645</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net income before income taxes and minority interest</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,221,148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(23,743</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(20,324</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Basic earning per share </B>(Note 16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.71</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Diluted earning per share </B>(Note 16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Weighted average number of common shares
used in the determination of:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Basic earnings per share (Note 16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,917,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,969,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,897,969</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Diluted earnings per share (Note 16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,037,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,087,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,999,691</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.





<P align="center" style="font-size: 10pt">48
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">





<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY</B>



<P align="center" style="font-size: 10pt"><B>FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2003</B><BR>
(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Redeemable preferred</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>stock</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Common stock</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollars</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollars</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,634</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40,361</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,863,144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,635,774</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,821</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,985</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,431</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14,260</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(17,112</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,112</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Repurchase and cancellation of
ordinary shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(25,200</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(30,240</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2001</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,195</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">30,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,920,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,704,077</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,996</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,947</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,083</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,700</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,700</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(702</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(842</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Repurchase and cancellation of
ordinary shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,184</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,621</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">23,688</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,993,419</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,792,103</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Public offering of ordinary shares,
$14.75, net of issue costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,392,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,670,580</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,837</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">291,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">349,756</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,978</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,973</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,973</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,687,010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,824,412</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR clear="all"><DIV align="right" style="font-size: 10pt">[Additional columns below]</DIV><P align="left" style="font-size: 10pt">[Continued from above table, first column(s) repeated]

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Stock and</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Additional</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>earned but</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>paid-in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Retained</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>stockholders&#146;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>not issued</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>capital</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>earnings</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>equity</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2000</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">380,850</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,726,749</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,443,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,227,443</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(340,125</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">411,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159,890</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Repurchase and cancellation of
ordinary shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(241,595</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(271,835</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,575,246</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,575,246</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">169,599</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">169,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2001</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">210,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,896,753</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,633,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19,474,424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(227,980</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">490,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347,852</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,999</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,841</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Repurchase and cancellation of
ordinary shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(30,248</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(32,869</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,678,149</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,678,149</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,497</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">424,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,354,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,531,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,126,224</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Public offering of ordinary shares,
$14.75, net of issue costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,118,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,788,834</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of share capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(544,756</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,300,838</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,110,442</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Conversion of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(145</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(162</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,095,301</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,095,301</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issue of options and share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,409</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">26,773,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,612,977</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">44,248,527</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.




<P align="center" style="font-size: 10pt">49
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B><BR>
(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>For the year ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Adjustments to reconcile net income to net cash</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,699,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,269,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,113,041</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Amortization of intangible assets and bank fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,318,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,703</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Stock compensation on share grants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">289,174</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Loss on sale of fixed assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,702</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Undistributed income from affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,060,188</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Minority interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,324</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">(Increase) decrease in accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(82,939</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(83,791</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">165,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Increase in inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,088</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(68,620</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(165,278</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">(Increase) decrease in prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(50,529</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(20,401</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Increase in accounts payable and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230,725</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Increase (decrease)&nbsp;in other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,878</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,978</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,596</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,506,826</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,115,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,364,447</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash flows from investing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(460,886</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Purchase of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,159,860</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,107,837</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,892,147</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Business combinations, net of cash acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(19,495,005</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Investment in affiliate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,961,622</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,450</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Collection from loans receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">970,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proceeds from sale of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">360</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(29,645,995</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,568,723</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,904,237</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash flows from financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net proceeds from credit facility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,187,035</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,500,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(426,970</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Dividends paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,924,067</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,669,088</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,477,828</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net proceeds from issuance of stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,037,034</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">615,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,075</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Principal repayments of long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(13,492,213</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(476,760</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(281,922</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Payment to acquire common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(32,869</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(271,595</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Payment to acquire redeemable preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,841</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Decrease in bank overdraft</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(703,331</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net cash provided by (used in) financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,807,789</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(494,509</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,194,601</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net increase in cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,668,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">265,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash and cash equivalents at beginning of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">568,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">516,446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,837</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash and cash equivalents at end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,236,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">568,304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">516,446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest paid in cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">770,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">101,764</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">97,550</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest received in cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">81,836</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">15,676</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Corporation tax paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">40,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.




<P align="center" style="font-size: 10pt">50
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>1. Principal activity</B>


<P align="left" style="font-size: 10pt">Consolidated Water Co. Ltd., its wholly-owned subsidiaries, majority-owned
subsidiary and affiliate (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 the Cayman Islands, Belize, Bahamas,
Barbados and British Virgin Islands. The Company sells water to a variety of
customers, including public utilities, commercial and tourist properties,
residential properties and government facilities. 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, as well as monthly adjustments for changes in the cost of energy.
The Company also provides consulting services under long-term agreements, under
which the Company designs and constructs desalination plants, and manages and
operates plants owned by other companies.



<P align="left" style="font-size: 10pt"><B>2. Accounting policies</B>


<P align="left" style="font-size: 10pt"><B>Basis of preparation: </B>The consolidated financial statements presented are
prepared in accordance with the accounting principles generally accepted in the
United States of America.


<P align="left" style="font-size: 10pt"><B>Use of estimates: </B>The preparation of consolidated 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 consolidated financial statements and
the reported amounts of revenues and expenses during the reporting period.
Significant items subject to estimates and assumptions include the carrying
value of property, plant and equipment, intangible assets, goodwill, allowances
for receivables and inventory. Actual results could differ from those
estimates.


<P align="left" style="font-size: 10pt"><B>Basis of consolidation: </B>The consolidated financial statements include the
accounts of the Company&#146;s wholly-owned subsidiaries Cayman Water Company
Limited, Belize Water Limited, Ocean Conversion (Cayman) Limited, DesalCo
Limited, DesalCo (Barbados) Ltd, and its majority owned subsidiary Waterfields
Company Limited. The operating results of Ocean Conversion (Cayman) Limited,
DesalCo Limited, DesalCo (Barbados) Ltd. have been included in the consolidated
financial statements effective February&nbsp;1, 2003. The operating results of
Waterfields Company Limited have been included in the financial statements
effective August&nbsp;1, 2003. All inter-company balances and transactions have
been eliminated.


<P align="left" style="font-size: 10pt"><B>Foreign currency: </B>The Company&#146;s reporting currency is the United States dollar.
The functional currency of the Company and its foreign subsidiaries is the
currency for each respective country. The exchange rates between the Cayman
Islands dollar, the Belize dollar, the Bahamian dollar and the Barbados dollar
have been fixed to the United States dollar during all periods presented.


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt"><B>Cash and cash equivalents: </B>Cash and cash equivalents comprise cash at bank on
call and highly liquid deposits with an original maturity of three months or
less.



<P align="center" style="font-size: 10pt">51
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>2. Accounting policies (continued)</B>


<P align="left" style="font-size: 10pt"><B>Trade accounts receivable: </B>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 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.


<P align="left" style="font-size: 10pt"><B>Inventory: </B>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 carrying amount of the water inventory is the lower of the average cost of
producing or purchasing water during the year and its net realizable value.


<P align="left" style="font-size: 10pt"><B>Deferred expenditures: </B>Deferred expenditures represented direct costs incurred
in connection with planned business combinations and financing transactions.


<P align="left" style="font-size: 10pt"><B>Loans receivable: </B>Loans receivable relate to amounts advanced to customers to
facilitate the construction of water desalination plants. The allowance for
loan losses, if any, is the Company&#146;s best estimate of the amount of portable
credit losses in the Company&#146;s existing loans and is determined on an
individual loan basis. Management believes the loans receivable are
collectible and, therefore, no loan allowance has been established as of
December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt"><B>Property, plant and equipment: </B>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:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Buildings
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">5 to 40&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Plant and equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">4 to 25&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Distribution system
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3 to 40&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Office furniture, fixtures and equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3 to 10&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vehicles
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3 to 10&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Leasehold improvements
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Shorter of 5&nbsp;years and operating lease term outstanding</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lab Equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">3 to 10&nbsp;years</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt">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.



<P align="center" style="font-size: 10pt">52
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>2. Accounting policies (continued)</B>


<P align="left" style="font-size: 10pt"><B>Goodwill and intangible assets: </B>Goodwill represents the excess costs over fair
value of the assets of an acquired business. Goodwill and intangible assets
acquired in a business combination accounted for as a purchase and determined
to have an indefinite useful life are not amortized, but are 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 estimatable 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 Company
periodically evaluates the possible impairment of goodwill. Management
identifies its reporting units and determines the carrying value of each
reporting unit by assigning the assets and liabilities, including the existing

goodwill and intangible assets, to those reporting units. The Company
determines the fair value of each reporting unit and compares it to the
carrying amount of the reporting unit. To the extent the carrying amount of
the reporting unit exceeds the fair value of the reporting unit, the Company is
required to perform the second step of the impairment test, as this is an
indication that the reporting unit goodwill may be impaired. In this step, the
Company compares the implied fair value of the reporting unit goodwill with the
carrying amount of the reporting unit goodwill. The implied fair value of
goodwill is determined by allocating the fair value of the reporting unit to
all the assets (recognized and unrecognized) and liabilities of the reporting
unit in a manner similar to a purchase price allocation, in accordance with
SFAS No.&nbsp;141, &#147;Business Combinations&#148;. The residual fair value after this
allocation is the implied fair value of the reporting unit goodwill. If the
implied fair value is less than its carrying amount, the impairment loss is
recorded. The Company&#146;s annual impairment tests resulted in no goodwill
impairment.


<P align="left" style="font-size: 10pt"><B>Investment: </B>Investments where the Company does not exercise significant
influence over the operating and financial policies of the investee and holds
less than 20% of the voting stock are recorded at cost. Investments where the
Company has significant influence over the operating and financial policies of
the investee and holds 20% to 50% of the voting stock are recorded using the
equity method of accounting for investments in common stock. The Company
recognizes an impairment loss on declines in value that are other than
temporary.


<P align="left" style="font-size: 10pt"><B>Other assets: </B>Other assets consist of the bank financing fees paid on the
drawdown of the Company&#146;s long term debt and is being amortized on a straight
line basis over the term of the loans.


<P align="left" style="font-size: 10pt"><B>Other liabilities: </B>Other liabilities consist of security deposits and advances
in aid of construction. Security deposits are received from large customers as
security for trade receivables. Advances in aid of construction are recognized
as 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.


<P align="left" style="font-size: 10pt"><B>Shares repurchased: </B>Under Cayman Islands law, shares repurchased out of
capital by the Company are treated as cancelled upon redemption, and the
Company&#146;s issued share capital is reduced by the par value of those shares,
with the difference being adjusted to additional paid up capital.



<P align="center" style="font-size: 10pt">53
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>2. Accounting policies (continued)</B>


<P align="left" style="font-size: 10pt"><B>Stock and stock option incentive plans: </B>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.


<P align="left" style="font-size: 10pt">The Company applies the intrinsic-value-based method of accounting prescribed
by Accounting Principles Board (&#147;APB&#148;) 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.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income, as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,177,081</TD>

    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Add stock-based employee compensation expense included
in reporting net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442,497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">169,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Deduct total stock-based employee compensation expense
determined under fair-value-based method for all rewards</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(950,147</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(622,702</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(645,290</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Pro forma net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,365,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,396,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,288,882</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#150; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#150; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#150; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#150; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.57</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">The intrinsic value of stock based compensation is recorded in stockholders&#146;
equity and is expensed to the consolidated statements of income based on 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.


<P align="left" style="font-size: 10pt"><B>Revenue and cost of sales: </B>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.


<P align="left" style="font-size: 10pt">Consulting revenue is recognized on the accrual basis based upon time spent at
agreed upon rates and is included under service revenue.


<P align="left" style="font-size: 10pt">Plant construction revenue is recognized using the percentage-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. This
revenue is included under services revenue.


<P align="left" style="font-size: 10pt">Interest income is recognized by the Company over the term of the loan based on
the interest rate stated in the loan and is included in interest income.



<P align="center" style="font-size: 10pt">54
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>2. Accounting policies (continued)</B>


<P align="left" style="font-size: 10pt"><B>Repairs and maintenance: </B>All repair and maintenance costs are expensed as
incurred.


<P align="left" style="font-size: 10pt"><B>Comparative figures: </B>Certain of the prior year&#146;s figures have been adjusted to
conform to the current year&#146;s presentation. The Company has reallocated
maintenance expenses in cost of sales and general and administrative expenses
as management has determined it more appropriate to reflect these amounts in
its current allocations. There is no impact to net income of the Company.



<P align="left" style="font-size: 10pt"><B>3. Acquisitions</B>


<P align="left" style="font-size: 10pt">Effective February&nbsp;1, 2003, the Company acquired 100% of the outstanding voting
common shares of DesalCo Limited, its wholly owned subsidiary DesalCo
(Barbados) Limited and Ocean Conversion (Cayman) Limited. The total
consideration paid was $26,976,648, comprised of $24,202,651 in cash and
185,714 ordinary shares of the Company and $482,286 in costs related to the
acquisitions.


<P align="left" style="font-size: 10pt">Effective February&nbsp;1, 2003, the Company acquired as part of this acquisition of
DesalCo Limited, 12.7% of the outstanding voting common shares of Waterfields
Company Limited (&#147;Waterfields&#148;). On July&nbsp;30, 2003, the Company acquired a
further 13.5% of Waterfields and effective August&nbsp;1, 2003, acquired an
additional 64.7% interest resulting in total controlling interest of 90.9% of
Waterfields. The total consideration paid was $9,652,491, comprising of
$9,431,610 in cash and $220,881 of acquisition related costs.


<P align="left" style="font-size: 10pt">These acquisitions provide the Company with a reverse osmosis plant design,
construction and facility management and engineering services firm, as well as
facilities and contracts to supply additional bulk potable water services in
the Cayman Islands, Bahamas and Barbados.


<P align="left" style="font-size: 10pt">The following table summarizes the estimated fair values of assets acquired and
liabilities assumed at the date of the acquisitions.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="81%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,187,798</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,947,932</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Investments in affiliates</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,069,998</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,766,886</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,395,752</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,190,883</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,559,249</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,877,490</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt and liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,266,784</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total liabilities assumed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,144,274</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less: Minority interest in Waterfields Company Limited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">785,836</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net assets acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,629,139</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">55
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>3. Acquisitions (continued)</B>


<P align="left" style="font-size: 10pt">The results of operations of DesalCo Limited, DesalCo (Barbados) Limited, Ocean
Conversion (Cayman) Limited are included in the consolidated statements of
income from February&nbsp;1, 2003 and the results of operations of Waterfields
Company Limited are included in the consolidated statements of income from
August&nbsp;1, 2003. The unaudited pro forma consolidated results of operations of
Consolidated Water Co. Ltd., DesalCo Limited, DesalCo (Barbados) Limited, Ocean
Conversion (Cayman) Limited, Waterfields Company Limited and an equity interest
in Ocean Conversion (BVI)&nbsp;Ltd., had the companies been acquired at January&nbsp;1,
2003 or 2002 would be as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="54%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Pro forma revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,841,916</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">21,923,798</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Pro forma net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,704,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,145,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Pro forma earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.75</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.73</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>4. Cash and cash equivalents</B>


<P align="left" style="font-size: 10pt">Cash and cash equivalents are not restricted as to withdrawal or use. At
December&nbsp;31, 2003, the equivalent United States dollars are denominated in the
following currencies:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bank accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">United States dollars</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,459,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144,354</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cayman Islands dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,650,342</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,755</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Bahamian dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">492,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">297</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Belize dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">320,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,599</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Barbadian dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,937,832</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261,005</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Term deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">United States dollars</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,505,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Bahamian dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474,901</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Belize dollar</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">307,299</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,299,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">307,299</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,236,924</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">568,304</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>5. Accounts receivable</B>


<P align="left" style="font-size: 10pt">Accounts receivable comprise receivables from customers and are shown net of an
allowance for doubtful accounts of $74,867 (2002: $12,000). Significant
concentrations of credit risk are disclosed in Note 25.


<P align="left" style="font-size: 10pt">
<P align="center" style="font-size: 10pt">56
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>6. Inventory</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,440</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,409</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Consumables stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">190,280</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Spare parts stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,313,465</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,572</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,546,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">388,131</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>7. Loans receivable</B>


<P align="left" style="font-size: 10pt">As part of the acquisition of Ocean Conversion (Cayman) Limited, the following
loans receivable were acquired. Management estimates these loans to be fully
collectible and as such no impairment allowance has been provided at December
31, 2003.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Due from Water Authority Cayman: Original loan of $1,216,000,
non-interest
bearing, balance receivable in monthly installments of $14,476
to November&nbsp;30, 2008. Loan secured by Red Gate plant, machinery
and equipment.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">854,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Due from Water Authority Cayman: Two loans originally aggregated
$1,819,920, bearing interest at 5% per annum, receivable in combined
monthly installments of principle and interest of $25,721 to March&nbsp;2005,
secured by Lower Valley plant, machinery and equipment.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">373,275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Due from Water Authority Cayman: Two loans originally aggregated
$1,168,600, bearing interest at 5% per annum, receivable in combined
monthly installments of principle and interest of $16,516 to March&nbsp;2006,
secured by Lower Valley plant, machinery and equipment.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420,958</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Due from Water Authority Cayman: Two interest free loans originally
aggregated $3,129,000, receivable in monthly installments of $37,250
to November&nbsp;2009, secured by North Sound Road plant, machinery
and equipment.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,644,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total loans receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,293,078</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,098,732</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">(</TD>
    <TD nowrap align="right">&#151;</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Loans receivable, excluding current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,194,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Principal amounts due in each of the next five years are as follows:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,098,732</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">887,789</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">669,855</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">620,714</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">606,238</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">409,750</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">57
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>8. Property, plant and equipment</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="59%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,679</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,149,669</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,211,200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,923,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,288,460</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distribution system</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,781,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,237,043</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Office furniture, fixtures and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">864,426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">715,539</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Vehicles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">607,230</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Leasehold improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">246,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,480</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Lab equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,035</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Assets under construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">628,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,202,058</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,812,157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,817,724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,149,860</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9,564,078</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net book value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">29,662,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,253,646</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">At December&nbsp;31, 2003, the Company had outstanding capital commitments of
approximately $600,000 (2002: $1,080,000). 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 $9,751,456
(2002: $9,806,663).



<P align="left" style="font-size: 10pt"><B>9. Investments in affiliates</B>


<P align="left" style="font-size: 10pt">The Company also acquired as part of the acquisition described in Note 3, 50%
and 100% of the outstanding voting common shares and non-voting common shares
of Ocean Conversion (BVI)&nbsp;Ltd., respectively. On May&nbsp;9, 2003, the Company sold
100% of its non-voting shares in Ocean Conversion (BVI)&nbsp;Ltd. to Sage Water
Holdings (BVI)&nbsp;Limited for approximately $2,120,250. The Company now owns 50%
of the voting common shares of Ocean Conversion (BVI)&nbsp;Ltd., representing a
43.5% interest in the company.


<P align="left" style="font-size: 10pt">The Company&#146;s investment in Ocean Conversion (BVI)&nbsp;Ltd. is accounted for using
the equity method of accounting.


<P align="left" style="font-size: 10pt">The excess cost over the Company&#146;s share of fair value net assets acquired of
Ocean Conversion (BVI)&nbsp;Ltd. is $6,654,362 which is considered equity-method
goodwill. In accordance with SFAS No.&nbsp;142 this equity-method goodwill is not
being amortized, but is analyzed for impairment. At December&nbsp;31, 2003,
management believes there to be no impairment of this equity-method goodwill.



<P align="center" style="font-size: 10pt">58
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>9. Investments in affiliates (continued)</B>


<P align="left" style="font-size: 10pt">Summarized financial information of Ocean Conversion (BVI)&nbsp;Ltd. is presented as
follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,154,380</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,771,844</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,612,348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,608,175</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,766,728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,380,019</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,006,733</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">540,617</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,410,063</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,739,379</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,416,796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,279,996</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>For the year ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,819,605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,427,108</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,110,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,862,747</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,663,353</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,205,086</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,738,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,229,625</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>10. Intangible assets</B>


<P align="left" style="font-size: 10pt">Effective February&nbsp;1, 2003, the Company acquired 100% of the outstanding voting
common shares of DesalCo Limited, its wholly-owned subsidiary DesalCo
(Barbados) Ltd., and Ocean Conversion (Cayman) Limited. A portion of the
purchase price was allocated to the following identifiable intangible assets.


<P align="left" style="font-size: 10pt">(a)&nbsp;&nbsp;&nbsp;&nbsp;As part of the acquisition of DesalCo Limited the Company attributed
$726,902 to an intangible asset which represents the fair value of a Management
Services Agreement originally dated December&nbsp;4, 2000, under which DesalCo
Limited provides management and engineering services to Ocean Conversion (BVI)
Ltd an affiliated company. Original agreement was amended on February&nbsp;7, 2003
such that there is no expiration term for this agreement. Management of the
Company has determined that this intangible asset has an indefinite life, and
therefore it is not being amortized.


<P align="left" style="font-size: 10pt">(b)&nbsp;&nbsp;&nbsp;&nbsp;As part of the acquisition of DesalCo Limited, the Company attributed
$337,149 to an intangible asset which represents the fair value of the DWEER&#153;
Distribution Agreement between DesalCo Limited and DWEER Technology Limited
which expires on October&nbsp;31, 2009. Under this agreement DesalCo Limited was
granted an exclusive right, within certain geographical areas in the Caribbean,
Central and South America, to distribute certain patented equipment, which can
increase the operational efficiency of reverse osmosis seawater desalination
plants. The carrying amount attributable to the intangible asset of the DWEER&#153;
Distribution Agreement is being amortized over the remaining term of the
seven-year agreement and has a weighted average useful life of 6.83&nbsp;years.


<P align="left" style="font-size: 10pt">(c)&nbsp;&nbsp;&nbsp;&nbsp;As part of the acquisition of DesalCo Limited, the Company attributed
$104,050 to an intangible asset which represents the fair value of an
operations agreement between Sandy Lane Properties Ltd. and DesalCo (Barbados)
Limited, a wholly owned subsidiary of DesalCo Limited. Under the terms of the
agreement, DesalCo (Barbados) Limited provides operations and maintenance
services for a seawater reverse osmosis desalination plant. The carrying amount
attributable to the intangible asset of the operations agreement is being
amortized over the remaining term of the five-year agreement and has a weighted
average useful life of 3.0&nbsp;years.



<P align="center" style="font-size: 10pt">59
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>10. Intangible assets (continued)</B>


<P align="left" style="font-size: 10pt">(d)&nbsp;&nbsp;&nbsp;&nbsp;As part of the acquisition of Ocean Conversion (Cayman) Limited, the
Company attributed $4,598,785 to intangible assets which represent the fair
value of three Water Production and Supply Agreements between Ocean Conversion
(Cayman) Limited and the Government of the Cayman Islands, dated April&nbsp;25,
1994, June&nbsp;18, 1997 and December&nbsp;31, 2001. Under these agreements, Ocean
Conversion (Cayman) Limited built reverse osmosis seawater desalination plants
for the Government of the Cayman Islands. Ocean Conversion (Cayman) Limited
operates the plants until the expiration of the agreement term, as extended, at
which time the plant operations will be transferred to the Government of the
Cayman Islands for no consideration. The carrying amounts attributable to the
intangible assets of the Water Production and Supply Agreements are being
amortized over the remaining term of the agreements, which are approximately 6,
3 and 7&nbsp;years, respectively and has a weighted average useful life of 5.8
years.


<P align="left" style="font-size: 10pt">(e)&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;17, 2003, the Company signed a new agreement with its Belize
customer for the provision of water from a seawater desalination plant for an
initial term of 23&nbsp;years. The new agreement has been executed, but final
completion is subject to satisfying three conditions precedent, of which to
date we have met one and BWSL has met one. We are awaiting confirmation from
the Government of Belize that our application for extension of our existing
import duty and tax exemptions has been granted until at least September&nbsp;17,
2009, which will satisfy the final condition precedent. The terms and
conditions of the contract signed on June&nbsp;26, 1992 between BWSL and our company
remain in full force and effect until all conditions precedent are satisfied.
The carrying amount of the Belize Water Production and Supply Agreement which
was previously being amortized over its weighed average useful life of 10.75
years is now being amortized over the term of the new 23-year agreement and has
a weighted average useful life of 23.0&nbsp;years.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-amortizable intangible asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Management service agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">726,902</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Amortizable intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">DWEER<SUP>TM</SUP> distribution agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">337,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Operations agreement with Sandy Lane</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,050</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cayman water production and supply agreements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,598,785</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Belize water production and supply agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,095,255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,095,255</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,862,141</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,095,255</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Accumulated amortization</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non-amortizable intangible asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Management service agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Amortizable intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">DWEER<SUP>TM</SUP> distribution agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(45,250</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Operations agreement with Sandy Lane</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(31,793</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cayman water production and supply agreements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(718,346</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Belize water production and supply agreement</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(634,797</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(475,381</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,430,186</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(475,381</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net book value</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,431,955</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,619,874</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Amortization for each of the next five years are as follows:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">966,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">966,465</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">857,528</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">825,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">703,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,386,278</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">60
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>11. Goodwill</B>


<P align="left" style="font-size: 10pt">As of January&nbsp;1, 2002, the Company adopted SFAS No.&nbsp;142 &#147;Goodwill and Other
Intangible Assets&#148;, and in accordance with this statement the goodwill is not
amortized, but is analyzed for impairment annually. The carrying amount of
goodwill allocated to the reporting units for the year ended December&nbsp;31, 2003
are as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Retail</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Bulk</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Services</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Segment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Segment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Segment</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance as of December&nbsp;31, 2002</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Goodwill acquired during the year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,170,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,136,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,395,752</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance as of December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,170,511</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,136,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">88,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,395,752</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">The reporting segments are tested for impairment in the fourth quarter, by
comparing the fair value of the reporting segments to the carrying value. The
fair value is determined using discounted cash flow based on management&#146;s best
estimates of forecasts for each segment. At December&nbsp;31, 2003, the results of
the impairment tests did not require the Company to recognize an impairment
loss.



<P align="left" style="font-size: 10pt"><B>12. Dividends</B>


<P align="left" style="font-size: 10pt">Quarterly interim dividends were declared in respect of class A common stock
and redeemable preferred stock as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">March 31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">June 30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">September 30</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">December 31</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">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, 2003 are unclaimed dividends of
$79,311 (2002: $85,671).



<P align="left" style="font-size: 10pt"><B>13. Long term debt</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Scotiabank $20,000,000 term loan bearing interest at an annually adjusted
floating rate of LIBOR plus 1.5% to 3%, depending on the ratio of the
Company&#146;s consolidated debt to its consolidated earnings before interest,
taxes and depreciation, repayable in quarterly payments of $714,286
plus interest, due February&nbsp;6, 2010. (Rate at December&nbsp;31, 2003 was 2.68%)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,857,143</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Scotiabank $1,428,000 term loan bearing interest at 3-month LIBOR
plus 1.5%, repayable in semi-annual installments of $240,000 plus interest,
due December&nbsp;31, 2007.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,188,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royal Bank of Canada loan bearing interest at LIBOR plus 1.75%,
repayable in quarterly installments of principal and interest, due in 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">801,414</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">61
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>13. Long term debt (continued)</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="74%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royal Bank of Canada loan bearing interest at Nassau Prime Lending rate
plus 1.5%, repayable in quarterly installments of principal and interest,
due in 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">470,024</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Inter-American Investment Corporation loan bearing interest at LIBOR
plus 2.75%, repayable in quarterly installments of $40,000 plus interest,
due in 2004.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">European Investment Bank loan bearing interest at 3.36%, repayable in
semi annual installments, repaid in full during the year ended December
31, 2003.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">905,384</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royal Bank of Canada loan bearing interest at six month LIBOR plus 1.5%,
repayable in semi annual installments of $62,500 plus interest,
Repaid in full during the year ended December&nbsp;31, 2003.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">312,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royal Bank of Canada loan bearing interest at monthly LIBOR plus 1.5%,
repayable in monthly installments of $12,500 plus interest,
repaid in full during the year ended December&nbsp;31, 2003.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,375,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,396,581</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,592,884</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(3,763,144</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(518,275</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt, excluding current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">16,633,437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,074,609</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">In addition to these facilities, as at December&nbsp;31, 2003, the Company has
un-drawn available lines of credit with Scotiabank for $2,000,000 bearing
interest at the floating base rate as established by Cayman Islands Class&nbsp;A
licensed banks from time to time and with Royal Bank of Canada for $500,000
bearing interest at Nassau Prime plus 1%.


<P align="left" style="font-size: 10pt">The Company is in compliance with restrictive covenants associated with all its
long term debts.


<P align="left" style="font-size: 10pt">The Company has collateralized all borrowings under the $20,000,000 seven-year
term loan and the $2,000,000 un-drawn line of credit by providing Scotiabank
with a first debenture over fixed and floating assets, first legal charge over
land and buildings, security interest in all insurance policies and claims,
reimbursement agreement for standby letters of credit, pledge of capital stock
of each subsidiary and guarantees and negative pledges from each company where
majority interest was acquired.


<P align="left" style="font-size: 10pt">The two Royal Bank of Canada loans and the loan from Inter-American Investment
Corporation have been collateralized by the assets of Waterfields Company
Limited.


<P align="left" style="font-size: 10pt"><B>The aggregate capital repayment obligations over the next five
years are as follows:</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,808,555</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,745,610</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,461,920</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,951,929</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,857,144</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,571,423</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">62
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>14. Share capital and additional paid in capital</B>


<P align="left" style="font-size: 10pt">Redeemable preferred stock (&#147;preference shares&#148;) is issued under the Company&#146;s
Employee Share Incentive Plan as discussed in Note 22 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.


<P align="left" style="font-size: 10pt">The Company has a Class &#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 &#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. 60,000 of the Company&#146;s authorized but unissued
ordinary shares have been reserved for issue as Class &#145;B&#146; stock. The Class &#145;B&#146;
stock ranks pari passu with ordinary shares for dividend and voting rights. No
Class &#145;B&#146; stock options have been exercised or redeemed up to December&nbsp;31,
2003.



<P align="left" style="font-size: 10pt"><B>15. Expenses</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="54%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>For the year ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cost of water sales comprise the following:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water purchases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">263,586</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,952,331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,074,759</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,586,217</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,175,349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,018,541</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Amortization of intangible asset (Note 10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">954,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,703</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Employee costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,046,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,042,192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">939,976</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fuel oil</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">639,434</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">179,275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91,842</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Royalties (Note 20)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">781,632</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737,064</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">694,351</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Electricity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,499,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">710,168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">534,919</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">224,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,404</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,808</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Maintenance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,144,141</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441,396</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">262,092</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other direct costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">536,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">325,092</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">209,126</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,676,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,882,177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,109,117</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>General and administrative expenses
comprise the following:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Employee costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,198,906</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,427,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,299,877</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,777</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94,500</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Professional fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">352,340</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">278,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">280,297</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">414,525</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,328</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Directors&#146; fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">157,877</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,184</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Maintenance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197,787</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21,339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,663</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other indirect costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">898,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">523,746</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">606,211</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,339,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,644,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,500,060</TD>

    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">63
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>16. Earnings per share</B>


<P align="left" style="font-size: 10pt">Basic earnings per common share (&#147;EPS&#148;) is calculated by dividing net income
available to common stockholders by the weighted average number of common
shares outstanding during the period. The computation of diluted EPS assumes
the issuance of common shares for all potential common shares outstanding
during the reporting period. In addition, the dilutive effect of stock options
is considered in earnings per common share calculations, if dilutive, using the
treasury stock method.


<P align="left" style="font-size: 10pt">The following summarizes information related to the computation of basic and
diluted earnings per share for the three years ended December&nbsp;31, 2003.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="61%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends paid and earnings attributable on
preference shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(5,706</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,913</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(10,794</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income available to holders of ordinary shares
in the determination of basic earnings per ordinary share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,171,375</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,567,397</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,753,779</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average number of ordinary shares
in the determination of basic earnings per ordinary share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,917,183</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,969,861</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,897,969</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Plus:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average number of preference
shares outstanding during the year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,604</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,801</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,213</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Potential dilutive effect of unexercised options and
warrants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,870</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,509</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average number of shares used for determining
diluted earnings per ordinary share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,037,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,087,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,999,691</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>17. Segmented information</B>


<P align="left" style="font-size: 10pt">Due to the recent acquisitions, management changed the Company&#146;s internal
organizational structure to effectively assimilate the business activities of
the acquired companies. Consequently, management no longer considers it
appropriate to report separate business segments based on geographical
location. Under the Statements of Financial Accounting Standards 131,
&#147;Disclosure about Segments of an Enterprise and Related Information&#148;,
management now considers; (i)&nbsp;the operations to supply water to retail
customers, (ii)&nbsp;the operations to supply water to bulk customers, and (iii)&nbsp;the
provision of engineering and management services, as separate business
segments. The segmented information that was previously reported for the
Cayman Islands and the Bahamas is now reported as part of the Retail Water
segment, and segmented information for Belize is now reported as part of the
Bulk Water segment.


<P align="left" style="font-size: 10pt">For purposes of segment information, the accounts of Ocean Conversion (BVI)
Ltd. have been proportionally consolidated into the Bulk Water segment. An
adjustment has been made in reconciling items to account for the investment
under the equity method. Also included in reconciling items are corporate
expenses including interest expense that do not relate to any specific
operating segment.



<P align="center" style="font-size: 10pt">64
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>17. Segmented information (continued)</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="16%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="35"><B>As at December 31 and for the year then ended</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Retail</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Bulk</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Services</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,918,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,683,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,017,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,130,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,471,097</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,230,775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,090,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(297,793</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(60,487</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,182</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(420,445</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,463</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(51,694</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income includes:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Interest revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,597</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">89,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">422,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">91</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,972,300</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,824,815</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,197,293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,920,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,057,362</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">911,824</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">491,593</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">General and
administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,684,216</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,418,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,309,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,731,595</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">190,822</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales
and general and
administrative
expenses include:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,077,609</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,089,021</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">952,216</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">835,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">180,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160,825</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">877,761</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,703</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,043</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,963,842</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,379,912</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,607,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,038,771</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">156,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">328,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and
equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,701,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,812,973</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,873,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,954,770</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,440,673</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,541,795</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,095</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,028,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,347,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,410,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,224,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,160,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,310,772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,255,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR clear="all"><DIV align="right" style="font-size: 10pt">[Additional columns below]</DIV><P align="left" style="font-size: 10pt">[Continued from above table, first column(s) repeated]

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="23"><B>As at December 31 and for the year then ended</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Reconciliation</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>Total</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,084,980</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,054,205</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,154,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,248,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">952,680</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">182,748</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(52,198</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,645</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income includes:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Interest revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(19,139</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82,334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,584</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273,384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,163,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,986</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(708,005</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,676,281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,882,177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,109,117</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">General and
administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(269,924</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,339,524</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,644,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,500,060</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales
and general and
administrative
expenses include:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(218,889</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,699,140</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,269,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,113,041</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">954,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194,907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,703</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(154,371</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and
equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,007,755</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,662,297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,253,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,414,935</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,945,557</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,562,126</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,507,637</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,721,178</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">65
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>17. Segmented information (continued)</B>


<P align="left" style="font-size: 10pt">For the year ended December&nbsp;31, 2003, revenues from the Cayman Island
operations were $15,541,455 (2002: $10,565,568; 2001: $9,990,997). Revenues
from all foreign country operations were $3,512,750 (2002: $1,589,121; 2001:
$1,257,108). Included in the revenues from foreign countries is $1,869,077
(2002: $118,024; 2001: $26,333) from the operations in Bahamas, $1,245,744
(2002: $1,471,097; 2001: $1,230,775) from our operations in Belize and $397,929
(2002: $nil; 2001: $nil) from our operations in Barbados.


<P align="left" style="font-size: 10pt">For the year ended December&nbsp;31, 2003, property, plant and equipment located in
the Cayman Islands was $19,375,384 (2002: 17,698,944; 2001: 15,770,560).
Property, plant and equipment in all the foreign country operations were
$10,286,913 (2002: $2,554,702: 2001: 2,644,375). Included in property, plant
and equipment from foreign operations is $8,904,739 (2002: $1,114,029; 2001:
$1,102,580) from the operations in Bahamas and $1,373,357 (2002: $1,440,673;
2001: $1,541,795) from our operations in Belize.


<P align="left" style="font-size: 10pt">For the year ended December&nbsp;31, 2003, revenues in the amount of $4,022,544
(2002: $nil; 2001: $nil) were earned from one customer. These revenues are
located in the Bulk segment.


<P align="left" style="font-size: 10pt">During the year end December&nbsp;31, 2003, revenues which were earned in the
Service segment from the Bulk segment through various management service
agreements and an engineering service agreement amounted to $1,038,435 (2002:
$nil; 2001: $nil). Any intercompany amounts included in this amount have been
eliminated in accordance with the basis of consolidation.


<P align="left" style="font-size: 10pt"><B>18. Related party transactions</B>


<P align="left" style="font-size: 10pt">A professional service firm, of which a director was a partner, provided
professional services during the year ended December&nbsp;31, 2003 for which it
charged $200,685 (2002: $225,400; 2001: $275).


<P align="left" style="font-size: 10pt">As at December&nbsp;31, 2003, the amounts receivable from Ocean Conversion (BVI)
Ltd. relating to revenue earned was $227,432, from revenues of $579,950.


<P align="left" style="font-size: 10pt"><B>19. Leases</B>


<P align="left" style="font-size: 10pt">The Company has committed to lease premises in the Cayman Islands for a period
of four years from February&nbsp;1, 2004 to January&nbsp;31, 2008 at approximately
$118,512 per annum.


<P align="left" style="font-size: 10pt">During the year ended December&nbsp;31, 2003, the Company entered into a six month
lease which ended on September&nbsp;30, 2003, to rent a portable reverse osmosis
machine capable of producing 150,000 US gallons of water per day. Total lease
payments made during the year were $120,000.


<P align="left" style="font-size: 10pt"><B>20. Commitments</B>


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt">The Company has six water supply agreements under which it is required to
provide minimum water quantities.


<P align="left" style="font-size: 10pt">As part of the acquisition of the Company&#146;s interests in Ocean Conversion
(Cayman) Limited, with the approval of Scotiabank (Cayman Islands) Ltd., the
Company has guaranteed the performance of Ocean Conversion (Cayman) Limited to
the Cayman Islands government, pursuant to the water supply contract with the
Water Authority-Cayman dated April&nbsp;25, 1994 as amended.



<P align="center" style="font-size: 10pt">66
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>20. Commitments (continued)</B>


<P align="left" style="font-size: 10pt">The Company has guaranteed to Scotiabank 50% of the Ocean Conversion (BVI)&nbsp;Ltd.
loan of $880,056. The Scotiabank loan is repayable in 6 equal semi-annual
installments of $125,000 with the balance of principal due May&nbsp;31, 2006,
bearing interest at 3-month LIBOR plus 1.5%. At December&nbsp;31, 2003 the
outstanding balance of this loan was $505,000 which is also collaterized by
other assets of Ocean Conversion (BVI)&nbsp;Ltd.


<P align="left" style="font-size: 10pt">As a result of the Company&#146;s acquisition of interests in Waterfields Company
Limited, it guaranteed the performance of Waterfields Company Limited to the
Water &#038; Sewerage Corporation of the Bahamas in relation to the water supply
contract between Waterfields Company Limited and the Water &#038; Sewerage
Corporation.


<P align="left" style="font-size: 10pt">In addition to the above guarantee provided by the Company to Water &#038; Sewerage
Company of the Bahamas, the Company also provides a bank guarantee, with the
Royal Bank of Canada, Nassau, in the amount of $1,910,775 to the Water &#038;
Sewerage Corporation of The Bahamas in that the Company shall duly perform and
observe all terms and provisions pursuant to the contract between the Water &#038;
Sewerage Corporation of The Bahamas and the Company. In the event of the
Company&#146;s default on its obligations, the Royal Bank of Canada, Nassau, shall
satisfy and discharge any damages sustained by the Water &#038; Sewerage Corporation
of The Bahamas up to the guaranteed amount.


<P align="left" style="font-size: 10pt"><B>21. Water purchase agreement</B>


<P align="left" style="font-size: 10pt">As a result of the Company&#146;s acquisition of Ocean Conversion (Cayman) Limited
(&#147;OCL&#148;), the Company cancelled its water purchase agreement with OCL, which
originally was planned to expire on December&nbsp;31, 2004. Under the terms of the
agreement, the Company was required to purchase an annual minimum amount of
water. At December&nbsp;31, 2003, accounts payable includes $nil (2002: $208,556)
outstanding under the agreement.


<P align="left" style="font-size: 10pt"><B>22. Stock compensation</B>


<P align="left" style="font-size: 10pt">The Company operates various stock compensation plans that form part of
employees&#146; remuneration. Stock compensation expense of $138,750 (2002:
$442,497; 2001: $169,599) 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 on the fair value at the grant dates
for award under those plans consistent with the method of SFAS 123, the
Company&#146;s net income and earnings per shares would have been reduced to the pro
forma amounts below:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>For the Year ended December 31,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income &#151; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,177,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,576,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,764,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income &#151; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,365,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,396,105</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,288,882</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#151; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.71</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Basic &#151; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.68</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#151; as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Diluted &#151; pro forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.57</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">67
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>22. Stock compensation (continued)</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In calculating the fair value for these options under SFAS 123 the
Black-Scholes model was used with the following weighted average assumptions:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Exercise price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Grant date market value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.97</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Risk free interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.93</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Expected life</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" nowrap align="right">3.22</TD>
    <TD>&nbsp; years</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" nowrap align="right">3.23</TD>
    <TD>&nbsp; years</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" nowrap align="right">3.21</TD>
    <TD>&nbsp; years</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Expected volatility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">35.55</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">42.91</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">52.79</TD>
    <TD nowrap>%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Expected dividend yield</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.16</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2.85</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3.67</TD>
    <TD nowrap>%</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>Employee Share Incentive Plan (Preference shares)</B>


<P align="left" style="font-size: 10pt">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 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.



<P align="left" style="font-size: 10pt">The details of preferred shares and preferred share options granted and
exercised under the Employee Share Incentive Plan are as follows:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Strike</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Grant</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercised</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expired</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">$nil</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">$nil</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">$nil</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">N/A</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred share options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,963</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,858</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,105</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,713</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">617</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,096</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,149</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Each employee&#146;s option to purchase preferred shares must be exercised within 30
days of the grant date, which is the 90<SUP>th</SUP> day after the date of the auditor&#146;s
certificate on the financial statements for the relevant year.


<P align="left" style="font-size: 10pt"><B>Employee Share Option Plan (Ordinary Stock Options)</B>


<P align="left" style="font-size: 10pt">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 the 90th day after the date of the auditor&#146;s certificate
on the financial statements for the relevant year. 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)
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.



<P align="center" style="font-size: 10pt">68
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>22. Stock compensation (continued)</B>


<P align="left" style="font-size: 10pt"><B>Non-Executive Directors&#146; Share Plan</B>


<P align="left" style="font-size: 10pt">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. The number of ordinary shares granted is calculated with
reference to a strike price that is set on October 1 of the year preceding the
grant. Stock granted during the year ended December&nbsp;31, 2003 totaled 7,735
shares (2002: 6,305) at a strike price of $11.79 (2002: $10.70).


<P align="left" style="font-size: 10pt"><B>Directors and senior management stock compensation</B>


<P align="left" style="font-size: 10pt">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. During the year ended December&nbsp;31, 2003, the option plan for senior
management was amended as part of renegotiations of employee contracts. The
amended contracts terminated the stock option plans for all years commencing
from January&nbsp;1, 2004. The 2003 stock option exercise price was set at the
market price on December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt">The following table summarizes information about the Company&#146;s stock option
plans as of December&nbsp;31, 2003, 2002 and 2001, and changes during the years
ended on those dates.


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2001</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>


    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="3"><B>Number</B><HR noshade size="1"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR noshade size="1"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B><HR noshade size="1"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR noshade size="1"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B><HR noshade size="1"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR noshade size="1"></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Outstanding at beginning
of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">394,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341,136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">243,045</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.73</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">183,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,086</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">162,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.55</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(96,453</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(58,596</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(61,858</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2.58</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,149</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,096</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,105</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.32</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Outstanding at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">479,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">394,530</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">341,136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Exercisable at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">428,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">358,230</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318,531</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8.55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">The following table summarizes the weighted average grant-date fair value of
options during the year:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="73%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11"><B>For the year ended December 31,</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Options granted with an exercise price below
market price on the date of grant:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Senior management</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.78</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Non executive Director</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.89</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Employees &#151; preferred shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.88</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Overall weighted average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.81</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Options granted with an exercise price at
market price on the date of grant:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Senior management</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.70</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Employees &#151; ordinary share options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.08</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Overall weighted average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4.41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3.08</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">69
</DIV>

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


<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>22. Stock compensation (continued)</B>


<P align="left" style="font-size: 10pt"><B>Summary of options outstanding at December&nbsp;31, 2003</B>


<P align="left" style="font-size: 10pt">At December&nbsp;31, 2003, the range of exercise prices on outstanding options was
$6.75 &#151; $20.05. Accordingly the following information is presented on options
outstanding, which are all exercisable, at December&nbsp;31, 2003:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="57%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4"><B>Exercise prices<BR>from</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4"><B>Exercise prices<BR>from</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4"><B>$6.75 - $10.84</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4"><B>$11.17 - $20.05</B><HR size="1" noshade></TD>

</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Number of options outstanding at December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164,943</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">263,430</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average exercise price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Weighted average remaining contractual life</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="1" align="right">0.74 </TD>
    <TD>&nbsp;years</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD colspan="1" align="right">2.25</TD>
    <TD>&nbsp;years</TD>
    <TD>&nbsp;</TD>

</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">The weighted average fair value per share under SFAS 123 for shares granted
during the year below market price on the date of grant follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>2001</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Overall weighted average</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,941</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7.86</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>23. Taxation</B>


<P align="left" style="font-size: 10pt">Under current laws of the Cayman Islands, there are no income, estate,
corporation, capital gains or other taxes payable by the Company on its Cayman
Islands operations.


<P align="left" style="font-size: 10pt">Under the current laws of Belize, the Company has received a tax exemption with
respect to its Belize operations. The exemption expires in January&nbsp;2006 and may
be renewed in accordance with local legislation.


<P align="left" style="font-size: 10pt">Under current laws of The Commonwealth of The Bahamas, there are no income,
corporation, capital gains or other taxes payable by the Company. The Company
is required to pay an annual business license fee, the calculation of which is
based on the Bahamanian company&#146;s preceding year&#146;s financial statements, and
such fees are payable between January and April of the subsequent year.


<P align="left" style="font-size: 10pt">Under the current laws of Barbados, the Company&#146;s Barbados operations are
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%. As
at December&nbsp;31, 2003, the Company had income tax receivable in the amount of
$3,335. The Company has not recorded any deferred tax asset or liability as
management believes that such items would be, if any, immaterial to the
financial statements.


<P align="left" style="font-size: 10pt">A significant majority of the net income of the Company is not subject to
current taxation. The overall net tax expense is less than 1%, which is
attributable to continuing operations in Barbados. There are no significant
permanent reconciling items.



<P align="center" style="font-size: 10pt">70
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>24. Pension benefits</B>


<P align="left" style="font-size: 10pt">Staff pension plans are offered to all employees in the Cayman Islands. The
plans are administered by third party pension plan providers and are defined
contribution plans 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, 2003 was $119,800
(2002: $70,210; 2001: $63,740).


<P align="left" style="font-size: 10pt"><B>25. Financial instruments</B>


<P align="left" style="font-size: 10pt"><B>Credit risk:</B><BR><BR>
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 its Bulk water customers. The
balances from these customers are current or an allowance has been made for
collection as at December&nbsp;31, 2003 and management does not anticipate any
losses on these concentrations.


<P align="left" style="font-size: 10pt"><B>Interest rate risk:</B><BR><BR>
The interest rates and terms of the Company&#146;s loans are presented in Note 13 of
these financial statements. The Company is subject to interest rate risk to
the extent that the LIBOR or Nassau Prime Lending rates change.


<P align="left" style="font-size: 10pt"><B>Foreign exchange risk:</B><BR><BR>
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.


<P align="left" style="font-size: 10pt"><B>Fair values:</B><BR><BR>
At December&nbsp;31, 2003 and 2002, 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. Management considers that the carrying amounts
for loans receivable and long term debt due to Scotiabank and the Royal Bank of
Canada approximate their fair value.


<P align="left" style="font-size: 10pt"><B>26. Non-cash transactions</B>


<P align="left" style="font-size: 10pt">The Company made the following non-cash transactions:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preference shares and issue of
replacement ordinary shares at $nil consideration</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">11,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">9,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">17,112</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preference shares issued to employees at $nil
consideration (Note 22)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,592</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,756</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redemption of preference shares at $nil
consideration</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(162</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary shares issued under the Non-executive
Directors Share Plan at $nil consideration (Note 22)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,600</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56,998</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary shares issued under senior management
employment agreements at $nil consideration (Note 22)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,715</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Additional paid in capital from exercise of stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,171</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">227,420</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">172,247</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">175,330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">289,174</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">71
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>26. Non-cash transactions</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="67%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2002</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2001</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Reduction in ordinary shares and additional paid-in capital
from cancellation of shares repurchased</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">36,710</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">271,595</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Addition of ordinary shares and additional paid-in capital
from issuance of shares in the acquisition</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,291,711</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared but not paid (Note 12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">686,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">508,444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">499,383</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt"><B>27. Impact of recent issued accounting standards</B>


<P align="left" style="font-size: 10pt">The Financial Accounting
Standards Board issued three standards and one
interpretation that effect the Company. A summary of these standards and
interpretation is given below:


<P align="left" style="font-size: 10pt">In June&nbsp;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 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, 2002. The adoption did not have a material effect
on the Company&#146;s financial statements.


<P align="left" style="font-size: 10pt">In December&nbsp;2002, the FASB issued SFAS No.&nbsp;148, &#147;Accounting for Stock-Based
Compensation &#151; Transition and Disclosure, an amendment of FASB Statements No.
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. All of the disclosure modifications required for the
annual financial statements have been included in the notes to these
consolidated financial statements.


<P align="left" style="font-size: 10pt">In January&nbsp;2003, the Financial Accounting Standards Board (FASB)&nbsp;issued
Interpretation No.&nbsp;46, &#147;Consolidation of Variable Interest Entities&#148;. This
interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January&nbsp;31, 2003, and to variable interests in variable interest entities
obtained after January&nbsp;31, 2003. For public enterprises with a variable
interest entity created before February&nbsp;1, 2003 the Interpretation applies to
that enterprise no later than the beginning of the first interim or annual
reporting period beginning after June&nbsp;15, 2003. The interpretation requires
certain disclosures in financial statements issued after January&nbsp;31, 2003 if it
is reasonably possible that the Company will consolidate or disclose
information about variable interest entities when the Interpretation becomes
effective. The application of this Interpretation is not expected to have a
material effect on the Company&#146;s financial statements.


<P align="left" style="font-size: 10pt">In May&nbsp;2003, FASB issued SFAS No.&nbsp;150, &#147;Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity&#148;. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. This Statement is
effective for financial instruments entered into or modified after May&nbsp;31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June&nbsp;15, 2003, except for mandatory redeemable financial
instruments of nonpublic entities. The Company does not expect the adoption of
the Statement to result in an impact on the Company&#146;s financial statements.



<P align="center" style="font-size: 10pt">72
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>Independent Auditors&#146; Report</B>


<P align="left" style="font-size: 10pt">The Board of Directors<BR>
Ocean Conversion (BVI)&nbsp;Ltd


<P align="left" style="font-size: 10pt">We have audited the accompanying consolidated balance sheet of Ocean
Conversion (BVI)&nbsp;Ltd. and its subsidiary (the &#147;Company&#148;) as of December&nbsp;31,
2003 and the related consolidated statements of income, stockholders&#146; equity
and cash flows for the year then ended. 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.

<P align="left" style="font-size: 10pt">We conducted our audit 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.


<P align="left" style="font-size: 10pt">In our opinion, the consolidated financial statements referred to above present
fairly, in all material aspects, the financial position of Ocean Conversion
(BVI)&nbsp;Ltd. and its subsidiary as of December&nbsp;31, 2003, and the results of their
operations and cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.



<P align="left" style="font-size: 10pt">Chartered Accountants



<P align="left" style="font-size: 10pt">March&nbsp;12, 2004



<P align="center" style="font-size: 10pt">73
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED BALANCE SHEET</B>



<P align="center" style="font-size: 10pt"><B>DECEMBER 31, 2003</B>



<P align="center" style="font-size: 10pt">(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Cash and cash equivalents (Note 3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,196,267</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts receivable (Note 4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">696,818</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Deferred fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,968</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Inventory
(Note&nbsp;5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">217,605</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,722</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total current assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,154,380</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Property, plant and equipment, net (Note 6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,612,348</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,766,728</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Accounts payable and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">756,733</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Current portion of long term debt (Note 7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total current liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,006,733</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Profit sharing provision (Note 11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">905,063</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt (Note 7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">505,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total liabilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,416,796</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Class&nbsp;A, voting shares, $1 par value. Authorized 600,000 shares:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Issued and outstanding 555,000 shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">555,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Class&nbsp;B, voting shares, $1 par value. Authorized 600,000 shares:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Issued and outstanding 555,000 shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">555,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Class&nbsp;C, non-voting shares. $1 par value. Authorized 600,000 shares;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:30px; text-indent:-10px">Issued and
outstanding 165,000 shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">165,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,659</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,849,273</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,349,932</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Commitments (Note 8)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Total liabilities and stockholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">6,766,728</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.



<P align="center" style="font-size: 10pt">74
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENT OF INCOME</B>



<P align="center" style="font-size: 10pt"><B>YEAR ENDED DECEMBER 31, 2003</B>



<P align="center" style="font-size: 10pt">(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Water sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,819,605</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cost of water sales (Note 9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,110,066</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Gross profit</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,709,539</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">General and administrative expenses (Note 9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,046,186</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Income from operations</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,663,353</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other income (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103,225</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(28,378</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74,847</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net income</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,738,200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.



<P align="center" style="font-size: 10pt">75
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENT OF STOCKHOLDERS&#146; EQUITY</B>



<P align="center" style="font-size: 10pt"><B>YEAR ENDED DECEMBER 31, 2003</B>



<P align="center" style="font-size: 10pt">(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Common stock</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Additional<BR>paid-in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Retained</B></TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="3"><B>Total<BR>stockholders&#146;</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollars</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>capital</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>earnings</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>equity</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at
January&nbsp;1, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,230,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,230,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">165,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,704,823</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,100,023</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issuance of Class&nbsp;C stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,459</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,738,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,738,200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Dividends declared</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,593,750</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,593,750</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Balance at December&nbsp;31, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,275,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,275,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">225,659</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,849,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,349,932</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.



<P align="center" style="font-size: 10pt">76
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
\
<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>CONSOLIDATED STATEMENT OF CASH FLOWS</B>



<P align="center" style="font-size: 10pt"><B>YEAR ENDED DECEMBER 31, 2003</B>



<P align="center" style="font-size: 10pt">(Expressed in United States dollars)


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Net income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,738,200</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Adjustments to reconcile net income to net cash</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Profit sharing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">527,393</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gain on disposal of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Decrease in accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,606,496</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">(Increase) in inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(38,779</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">(Increase) in prepaid expenses and other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(18,974</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Decrease (increase)&nbsp;in accounts payable and other
liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">466,116</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,783,118</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash flows from investing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proceeds on sale of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Purchase of property, plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,506,839</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,506,839</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash flows from financing activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Profit sharing rights paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(506,250</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Proceeds from long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">880,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Dividends paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,593,750</TD>
    <TD nowrap>)</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Principal repayment of long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,125,000</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Cash used in financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,345,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net increase (decrease)&nbsp;in cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">931,279</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash and cash equivalents at beginning of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">264,988</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cash and cash equivalents at end of year</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,196,267</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest paid in cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28,378</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Interest received in cash</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">103,225</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">The accompanying notes are an integral part of these consolidated financial statements.



<P align="center" style="font-size: 10pt">77
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>1. Principal activity</B>


<P align="left" style="font-size: 10pt">The Company was incorporated in the British Virgin Islands under the Companies
Act, Cap 285, on May&nbsp;14, 1990 and is engaged in the production and sale of
potable water to the Government of the British Virgin Islands (the
&#147;Government&#148;). The Company has an agreement with the Government, its sole
customer, to produce and supply a guaranteed quantity and quality of potable
water. This agreement provides for specific penalties should the Company not
be able to provide the guaranteed quantity of water.


<P align="left" style="font-size: 10pt">On January&nbsp;24, 1992, the Company amended the original agreement with the
Government to allow for the expansion of its plant in order to increase its
production capacity from 360,000 imperial gallons of water to 510,000 imperial
gallons per day. Under this agreement, the Government had the option to
purchase the facility, at a cost of $1,420,000, in May&nbsp;1999 or renew the
agreement for a period of seven years. The Government has not exercised its
option to purchase the plant but advised the Company of its desire to negotiate
an amended agreement.


<P align="left" style="font-size: 10pt"><B>2. Accounting policies</B>


<P align="left" style="font-size: 10pt"><B>Basis of preparation: </B>The consolidated financial statements presented are
prepared in accordance with the accounting principles generally accepted in the
United States of America.


<P align="left" style="font-size: 10pt"><B>Basis of consolidation: </B>The consolidated financial statements include the
financial statements of Ocean Conversion (BVI)&nbsp;Ltd. and its majority owned
subsidiary. All significant intercompany balances and transactions have been
eliminated.


<P align="left" style="font-size: 10pt"><B>Use of estimates: </B>The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management of the Company 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 consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant items subject to estimates and assumptions
include the carrying value of property, plant and equipment and inventory.
Actual results could differ from those estimates.


<P align="left" style="font-size: 10pt"><B>Cash and cash equivalents: </B>Cash and cash equivalents comprise cash at bank on

call and highly liquid deposits with an original maturity of three months or
less.


<P align="left" style="font-size: 10pt"><B>Trade accounts receivable: </B>Trade accounts receivable are recorded at invoiced
amounts based on meter readings reduced by appropriate allowances for estimated
irrecoverable amounts. 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 based on
historical write-off experience.


<P align="left" style="font-size: 10pt"><B>Inventory: </B>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.


<P align="left" style="font-size: 10pt"><B>Impairment of Long-Lived Assets: </B>In accordance with SFAS No.&nbsp;144, long-lived
assets, such as property, plant and equipment, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. Recoverability of assets to be held and
used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash flows expected to be generated by the asset.
If the carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the exceeds the fair value of the asset.



<P align="center" style="font-size: 10pt">78
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>2. Accounting policies (continued)</B>


<P align="left" style="font-size: 10pt"><B>Property, plant and equipment: </B>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:


<DIV align="left">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="70%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="78%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Plant and equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4 to 25&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Office furniture, fixtures and equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">3 to 10&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Vehicles
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">3 to 10&nbsp;years</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lab Equipment
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">3 to 10&nbsp;years</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt">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.


<P align="left" style="font-size: 10pt"><B>Water sales and cost of water sales: </B>The Government is billed monthly based on
meter readings performed at or near each month end and in accordance with the
water sales agreement which stipulates minimum monthly charges for water
service.


<P align="left" style="font-size: 10pt"><B>Repairs and maintenance: </B>All repair and maintenance costs are expensed as
incurred.




<P align="left" style="font-size: 10pt"><B>3. Cash and cash equivalents</B>


<P align="left" style="font-size: 10pt">Cash and cash equivalents are not restricted as to withdrawal or use.


<P align="left" style="font-size: 10pt"><B>4. Accounts receivable</B>


<P align="left" style="font-size: 10pt">Accounts receivable comprise receivables from our sole customer, the Government
of the British Virgin Islands. Significant concentrations of credit risk are
disclosed in Note 15.


<P align="left" style="font-size: 10pt"><B>5. Inventory</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">248,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less allowance for obsolescence</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(30,395</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">217,605</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">79
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>6. Property, plant and equipment</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cost</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Plant and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">8,973,271</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Office furniture, fixtures and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,658</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Vehicles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,600</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Lab equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,637</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Assets under construction</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">451,666</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,535,832</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Accumulated depreciation</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,923,484</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Net book value</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,612,348</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">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.



<P align="left" style="font-size: 10pt"><B>7. Long term debt</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Scotiabank (Cayman Islands) Ltd., loan bearing interest at three month
LIBOR plus 1.5% per annum, with interest calculated daily and payable
quarterly, repayable in 6 equal semi-annual installments of $125,000
commencing December&nbsp;31, 2002, the balance of principal and
interest then outstanding due May&nbsp;31, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">755,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Bank of Butterfield loan bearing interest at three month LIBOR plus 1.5%,
repayable in semi annual installments of principal and interest of
$125,000; repaid in full during the year ended December&nbsp;31, 2003.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total long term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">755,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Less current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(250,000</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Long term debt, excluding current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">505,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">The aggregate capital repayment obligations over the next five years
are as follows:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">$250,000</TD>
    <TD nowrap></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Any amounts drawn under the Scotiabank facility are collateralized by a fixed
and floating charge of $1,250,000. The fixed and the floating charge covers
all other assets of the Company.


<P align="left" style="font-size: 10pt">At year end the Company is in compliance with all restrictive covenants.



<P align="center" style="font-size: 10pt">80
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>8. Commitments</B>


<P align="left" style="font-size: 10pt">The Company rents property upon which it has installed walls and boreholes
necessary for the production of water. Future minimum lease payments under the
non cancelable operating lease at December&nbsp;31, 2003 are as follows:


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="59%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Operating Lease</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">18,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,055</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144,440</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>9. Expenses</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>Cost of water sales comprise the following:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Fuel oil</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">356,427</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Electricity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">324,162</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Maintenance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">288,697</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">502,573</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Employee costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">417,861</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,790</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other direct cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">142,556</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,110,066</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><B>General and administrative expenses
comprise the following:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Maintenance costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">709</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Professional fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,150</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Management fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">333,904</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Directors fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,647</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Profit sharing</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">527,393</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Other indirect costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110,291</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,046,186</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>10. Related party transactions</B>


<P align="left" style="font-size: 10pt">A professional service firm, of which a director is a principal, provided
pension services during the year ended December&nbsp;31, 2003 for which it charged
$345.


<P align="left" style="font-size: 10pt">Pursuant to a Management Services Agreement dated October&nbsp;1, 1992 between
DesalCo Ltd. and the Company, DesalCo Ltd. provides the Company with
management, administration, finance, operations, maintenance, engineering and
purchasing services, and is also entitled to be reimbursed for all reasonable
expenses incurred on behalf of the Company. The Company incurred fees of $333,904 related to this management service agreement for the year ended
December&nbsp;31, 2003.



<P align="center" style="font-size: 10pt">81
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>



<P align="left" style="font-size: 10pt"><B>11. Profit sharing provision</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Opening balance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">989,739</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Additions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">421,574</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Distributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(506,250</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">905,063</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">In 1993, the Company and its existing shareholders at that time, entered into
two Share Repurchase and Profit Sharing Agreements (the &#147;Agreements&#148;) to
repurchase 225,000 shares each from those shareholders (the &#147;Parties&#148;), whose
shares were issued in exchange for guarantees of the Company&#146;s long term debt.
The Agreements were subsequently approved by special dissolution at an
Extraordinary Meeting of all the Company&#146;s shareholders entitled to vote, held
on the same date.


<P align="left" style="font-size: 10pt">Under the terms of the Agreements, the Company, in exchange for the
above-mentioned shares, grants the Parties, profit sharing rights in the
Company&#146;s profits for as long as the Company remains in business as a going
concern. The Agreement states that where the Company has profits available for
the payment of dividends and pays a dividend there from, a distribution shall
be made to each of the Parties equal to 202,500 times the
dividend per share received by the remaining shareholder and paid concurrently
with such dividend. The factor of 202,500 shall be subject to
amendment by the same proportion and at the same time as changes take place or
adjustments are made in respect of the remaining shareholders.


<P align="left" style="font-size: 10pt">The current shareholders and an affiliate of a current shareholder have
acquired these profit sharing rights. The Company has made an allowance at
December&nbsp;31, 2003 for the maximum profit shares payable to the Parties if all
retained earnings were to be distributed as dividends and profit shares.


<P align="left" style="font-size: 10pt"><B>12. Taxation</B>


<P align="left" style="font-size: 10pt">Under the terms of the water sales agreement with the Government, the Company
is exempt from all taxation in the British Virgin Islands.


<P align="left" style="font-size: 10pt"><B>13. Non-cash transaction</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>2003</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Issuance of Class&nbsp;C shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">45,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">During the year ended December&nbsp;31, 2003, 45,000 Class&nbsp;C non-voting shares were
issued in exchange for cancellation of an equal portion of profit sharing
rights.



<P align="center" style="font-size: 10pt">82
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>


<P align="left" style="font-size: 10pt"><B>14. Pension plan</B>


<P align="left" style="font-size: 10pt">Effective December&nbsp;1, 2003, the Company established the MWM Global Retirement
Plan (the &#147;Plan&#148;). The Plan is a defined contribution plan whereby the Company
will contribute 5% of each participating employee&#146;s salary to the Plan. The
total amount recognized as an expense under the plan during the year ended
December&nbsp;31, 2003 was $nil and will approximate $17,900 per year
going forward.


<P align="left" style="font-size: 10pt"><B>15. Financial instruments</B>


<P align="left" style="font-size: 10pt"><B>Credit risk:</B>


<P align="left" style="font-size: 10pt">Financial assets that potentially subject the Company to concentrations of
credit risk consist principally of cash and cash equivalents and accounts
receivable. The Company&#146;s cash is placed with high credit quality financial
institutions. The accounts receivable are due from the Company&#146;s sole
customer, the Government (Note 1). As a result, the Company is subject to
credit risk to the extent of any non-performance by the Government.


<P align="left" style="font-size: 10pt"><B>Interest rate risk:</B>


<P align="left" style="font-size: 10pt">The interest rates and terms of the Company&#146;s loans are presented in Note 7 of
these consolidated financial statements. The Company is subject to interest
rate risk to the extent that the LIBOR rate may fluctuate.


<P align="left" style="font-size: 10pt"><B>Fair values:</B>


<P align="left" style="font-size: 10pt">At December&nbsp;31, 2003 the carrying amounts of cash and cash
equivalents, accounts receivable, accounts payable and other liabilities
approximate fair values due to the short term maturities of these assets and
liabilities. Management considers that the carrying amount for long-term debt
approximates fair value.



<P align="center" style="font-size: 10pt">83
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>OCEAN CONVERSION (BVI)&nbsp;LTD.</B>



<P align="center" style="font-size: 10pt"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B>


<DIV align="left">
<A name="112"></A>
</DIV>
<P align="left" style="font-size: 10pt"><B>ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, our
present independent accountants, regarding any accounting or financial matters
relating to us. KPMG has re-audited the financial statements for 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.

<DIV align="left">
<A name="113"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 9A. CONTROLS AND PROCEDURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Chief Executive Officer and Chief Financial Officer (collectively, the
&#147;Certifying Officers&#148;) are responsible for establishing and maintaining
disclosure controls and procedures for our company and our subsidiaries. Such
officers have concluded (based upon their evaluation of these controls and
procedures as of the end of the period covered by this report) that our
disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in this report is accumulated and communicated
to management, including our principal executive officers as appropriate, to
allow timely decisions regarding required disclosure.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Certifying Officers also have indicated that there were no significant
changes in our internal controls or other factors that could significantly
affect such controls subsequent to the date of their evaluation, and there were
no corrective actions with regard to significant deficiencies and material
weaknesses.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management, including each of the Certifying Officers, does not expect
that our disclosure controls or our internal controls will prevent all error
and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. In addition, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or
more people or by management override of the control. The design of any system
of controls also is based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions. Over time,
control may become inadequate because of changes in conditions, or the degree
of compliance with the policies or procedures may deteriorate. Because of these
inherent limitations in a cost-effective control system, misstatements due to
error or fraud may occur and not be detected.


<P align="center" style="font-size: 10pt">84
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="114"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART III</B>


<DIV align="left">
<A name="115"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT</B>



<P align="left" style="font-size: 10pt"><B>Our Directors and Executive Officers</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This table lists information concerning our executive officers and
directors:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Position</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey M. Parker
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">59</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Chairman of the Board of Directors</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Frederick W. McTaggart
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">41</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, President, Chief Executive Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kenneth R. Crowley
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">39</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Overseas Operations</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Gregory S. McTaggart
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">40</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President &#151; Operations (Cayman Islands)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert B. Morrison
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">50</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Purchasing and Information
Technology</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Gerard J. Pereira
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">33</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Engineering</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter D. Ribbins
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">55</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of Public Relations</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brent J. Santha
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">33</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer and Company Secretary</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William T. Andrews *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">55</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">J. Bruce Bugg, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">49</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brian E. Butler *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">53</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Steven A. Carr *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">53</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Carson J. Ebanks *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">46</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard L. Finlay
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Clarence B. Flowers, Jr. *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">48</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wilmer Pergande *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Raymond Whittaker *
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">49</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="left" style="margin-left:3%; font-size: 10pt">* The Board of Directors has determined that each of such persons is an
&#147;independent director&#148; under the corporate governance rules of The Nasdaq
Stock Market, Inc. (&#147;Nasdaq&#148;)


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Jeffrey M. Parker </B>has been a director of our company since 1980 and the
Chairman of the Board since 1982. On January&nbsp;1, 2004, Mr.&nbsp;Parker resigned as
Chief Executive Officer, a position he held since 1994 but remained employed by
the Company as Executive Director responsible for investor relations and
business expansion and Chairman of the Board. In addition to serving as our
Chairman of the Board, Mr.&nbsp;Parker is a Chartered Accountant and practices at
Moore Stephens in the Cayman Islands, a member of Moore Stephens International
Ltd. From 1993 to 1995, Mr.&nbsp;Parker served as a director of The International
Desalination Association representing the Caribbean &#038; 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Frederick W. McTaggart </B>has been a director of our company since 1998,
President since October&nbsp;2000 and Chief Executive Officer since January&nbsp;1, 2004.
Also on January&nbsp;1, 2004, Mr.&nbsp;McTaggart resigned as Chief Financial Officer, a
position he held since February&nbsp;2001. From April&nbsp;1994 to October&nbsp;2000, Mr.
McTaggart was the Managing Director of the Water Authority-Cayman, the
government-owned water utility serving certain areas of the Cayman Islands. He
received his B.S. degree in Building Construction from the Georgia Institute of Technology in 1985. Mr.
McTaggart is the brother of Mr.&nbsp;Gregory S. McTaggart, the Vice President -
Operations (Cayman Islands).


<P align="center" style="font-size: 10pt">85
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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Kenneth R. Crowley </B>was appointed our Vice President of Overseas Operations
in March&nbsp;2003 and holds a Bachelor of Science degree in Mechanical Engineering
from the University of Maryland. In 1989, he joined Reliable Water Co. Ltd,
the predecessor of Ocean Conversion (Cayman) Limited, as Operations Engineer in
the Canary Islands and the Cayman Islands. He was promoted to Operations
Manager of Ocean Conversion (Cayman) Limited in 1991. In 1998, Mr.&nbsp;Crowley
transferred to DesalCo Limited to work on the design, construction and
operation of reverse osmosis water plants including high efficiency work
exchanger energy recovery systems in the Cayman Islands, the Bahamas, Barbados
and the British Virgin Islands with a combined capacity in excess of 9&nbsp;million
U.S. gallons per day.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Gregory S. McTaggart </B>is our Vice President-Operations (Cayman Islands).
Mr.&nbsp;McTaggart joined our company in January&nbsp;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 Executive Officer and a director
of our company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Robert B. Morrison </B>was appointed Vice President of Purchasing &#038;
Information Technology in March&nbsp;2003. Mr.&nbsp;Morrison holds the designation
Certified Professional Purchaser and has over twenty five years experience in
the purchasing and logistics field. He joined DesalCo Limited as Purchasing
Manager in June of 1996 in which position he also employed his more than 20
years of information technology experience as software and systems developer,
network administrator and end user support resource for PC and mainframe
environments. Prior to joining DesalCo Limited, Mr.&nbsp;Morrison was Principal
Purchasing Officer for the Ministry of Works &#038; Engineering of the Bermuda
government and Purchasing Manager for American-Standard in Toronto, Canada.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Gerard J. Pereira </B>was appointed Vice President of Engineering in March
2003. Mr.&nbsp;Pereira obtained his BS and MS in Chemical Engineering from the
University of Waterloo, Ontario, Canada and joined Ocean Conversion (Cayman)
Limited as Operations Engineer in 1995. He was promoted to Operations Manager
of Ocean Conversion (Cayman) Limited in 1998, which post he held until our
acquisition of the company.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Peter D. Ribbins </B>is our Director of Public Relations. In September&nbsp;2003,
Mr.&nbsp;Ribbins resigned as Company Secretary and as a director, a position he held
since 1989. Mr.&nbsp;Ribbins joined our company in 1983 as its General Manager, a
position he held until 1989, when he was appointed Managing Director. He was
appointed President and Chief Operating Officer in 1994 and resigned from that
position in October&nbsp;2000. Mr.&nbsp;Ribbins obtained his B.S. degree in
Kinanthropology from the University of Ottawa, Canada in 1971.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Brent J. Santha </B>joined our Company as Management Accountant in January
2001 and was appointed Vice President of Finance and Assistant Company
Secretary in March&nbsp;2003. In December&nbsp;2003, Mr.&nbsp;Santha resigned as Assistant
Company Secretary and was appointed Company Secretary. On January&nbsp;1, 2004, Mr.
Santha was appointed Chief Financial Officer. Mr.&nbsp;Santha is a member of the
Canadian Institute of Chartered Accountants having received his Chartered
Accountant designation in 1997. Previously, he was employed, for six years, by
Johnsen Archer Chartered Accountants leaving as Manager of Audit &#038; Business
Services.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>William T. Andrews </B>became a director of our company upon completion of our
acquisition of DesalCo Limited in February&nbsp;2003. 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 has been Managing
Director of DesalCo Limited. 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


<P align="center" style="font-size: 10pt">86
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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">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 had served as President until October 2003. He is a member of the European
Desalination Society and the Caribbean Water &#038; Wastewater Association.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>J.&nbsp;Bruce Bugg, Jr. </B>has been a director of our company since 1998 and in
2003 Mr.&nbsp;Bugg resigned as Vice-Chairman of the Board and member of the
Executive Committee, positions he has also held 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 Investment Banking Group.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Brian E. Butler </B>has been a director of our company since 1983. Since 1977,
Mr.&nbsp;Butler has been the principal of Butler Property Development Group, a
property development company specializing in luxury resort projects in the
Cayman Islands.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Steven A. Carr </B>has served as a director of the Company since 1998. Since
1994, Mr.&nbsp;Carr has been the President of Carr &#038; Associates, a private
investment firm located in Bryan, Texas. Mr.&nbsp;Carr received his Bachelor of
Science degree from Texas A&#038;M University in 1973 and his Master of Arts degree
from the University of Texas in 1980. Before joining Carr &#038; Associates, Mr.
Carr held executive positions and participated in the ownership and management
of a number of broadcast and telecommunications ventures throughout the United
States. From 1998 to 2000, Mr.&nbsp;Carr served as an alternate director on our
board of directors and was elected as a full director in May&nbsp;2000. Mr.&nbsp;Carr is
a director of the First National Bank of Bryan and Waterfields, Ltd. He is
Senior Lecturer at Texas A&#038;M University&#146;s Mays Business School, a councilor of
the Texas A&#038;M Research Foundation and serves on numerous other boards and
councils.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Carson K. Ebanks </B>became the Cayman Islands government nominated director
of our company in May of 2001. Mr.&nbsp;Ebanks was the Director of Planning for the
Cayman Islands from 1991 &#151; 1997. Since 1997, he has served the Cayman Islands
Government as a Permanent Secretary currently for the Ministry of Community
Services, Women&#146;s Affairs, Youth and Sports. 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 &#151; Peace and Conflict Studies Minor) from the
University of Waterloo and a Master of Arts &#151; Planning in Community and
Regional Planning from the University of British Columbia. He is a Director of
the Water Authority &#151; Cayman and 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 the Vice President of the Cayman
Islands Olympic Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Richard L. Finlay </B>has served as a director of our company since 1995. Mr.
Finlay is an attorney and partner with the Cayman Islands law firm of Conyers,
Dill and Pearman. Before joining this firm in 2003, he was a partner with Charles Adams, Ritchie and Duckworth since 1993.
Prior to that, Mr.&nbsp;Finlay 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.
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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Clarence B. Flowers, Jr. </B>has been a director of our company since 1991.
Mr.&nbsp;Flowers is, and has been since 1985, the principal of Orchid Development
Company, a real estate developer in the Cayman



<P align="center" style="font-size: 10pt">87
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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Islands. Mr.&nbsp;Flowers also serves as a director of C.L. Flowers &#038; Son, which is
the largest manufacturer of wall systems in the Cayman Islands, and Cayman
National Bank, a retail bank.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Wilmer Pergande </B>has been a director of our company since 1978. Mr.
Pergande is the Global Leader for Desalination and Process Equipment,
GE Water Technologies/GE Osmonics. Mr.&nbsp;Pergande previously held the position of Vice-President of
Special Projects of Osmonics, Inc. of Minnetonka, Minnesota. 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Raymond Whittaker </B>has served as a director of our company since 1988. Mr.
Whittaker was the Managing Director of TransOcean Bank &#038; Trust, Ltd., a bank
and trust company located in the Cayman Islands and a subsidiary of Johnson
International, Inc., a bank holding company located in Racine, Wisconsin from
1984 to December&nbsp;2000. He is now the principal of his own company and
management firm.


<P align="left" style="font-size: 10pt"><B>Composition of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="33%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Group 1</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Group 2</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Group 3</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William T. Andrews
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Carson K. Ebanks, JP
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmer Pergande</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">J. Bruce Bugg Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard Finlay
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Raymond Whittaker</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brian Butler
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Clarence Flowers, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Steven A. Carr
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Frederick McTaggart</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jeffrey M. Parker</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The directors of Group 3 were re-elected at our annual shareholders&#146;
meeting in May&nbsp;2003. The directors in Group 1 will be proposed for re-election
in 2004, Group 2 in 2005 and then Group 3 again in 2006.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
our Cayman Islands license which was transferred to our wholly-owned
subsidiary, Cayman Water Company Limited in July 2003, the Cayman Islands government may nominate three
persons to serve on the board of directors of Cayman Water Company
Limited. We must cause one of the persons
nominated by the government to be elected as a director. In May&nbsp;2001, Carson K.
Ebanks, JP was elected as the government&#146;s nominee but remains
on the board of Consolidated Water Co. Ltd. Government has not yet nominated their director for Cayman Water Company Limited.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the Share Sale Agreement between DesalCo Limited and
our company under which we acquired all of the issued and outstanding stock of
DesalCo Limited on February&nbsp;7, 2003, we appointed William T. Andrews to our
board of directors as a director in Group 1.


<P align="left" style="font-size: 10pt"><B>Committees of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The board of directors has established the following committees:


<P align="left" style="font-size: 10pt">Executive Committee



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has an Executive Committee, which is comprised of
Messrs.&nbsp;Frederick McTaggart, Finlay, Flowers, Parker and Whittaker. The
functions of the Executive Committee include


<P align="center" style="font-size: 10pt">88
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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">meeting on a regular basis to
review the operations of the Company, ensuring that any matters, which must be
dealt with before the next Board of Directors meeting, are addressed in a
timely matter.


<P align="left" style="font-size: 10pt">Compensation Committee



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has a Compensation Committee, which is comprised of
Messrs.&nbsp;Finlay, Flowers, and Pergande. Pursuant to the Compensation Committee
Charter, which is filed as Exhibit&nbsp;99.1 to this Annual Report, the Compensation
Committee is responsible for reviewing and approving the executive compensation
program for the Company and its subsidiaries, assessing executive performance,
making grants of salary and annual incentive compensation, and approving
certain employment agreements. The Board of Directors has determined that all
members of the Compensation Committee, except Mr.&nbsp;Finlay, are &#147;independent
directors,&#148; as such term is defined under the corporate governance rules of
Nasdaq. Mr.&nbsp;Finlay is not an &#147;independent director&#148; as defined in Nasdaq Rule
4200 because the Company paid a law firm in which he was a partner for part of
2003 in excess of $200,000 for legal services provided to the Company during
2003. Notwithstanding Mr.&nbsp;Finlay&#146;s previous relationship with that law firm,
the Board of Directors believes it is required in the best interest of the
Company and its shareholders for Mr.&nbsp;Finlay to serve as a member of the
Compensation Committee and the Audit Committee because of his experience as a
director or the Company since 1995 and his knowledge of corporate governance
matters relating to Cayman Islands&#146; corporations.


<P align="left" style="font-size: 10pt">Audit Committee



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has an Audit Committee, which is comprised of
Messrs.&nbsp;Butler, Carr, Finlay and Whittaker.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee assists the Board of Directors in monitoring the
financial reporting process, the internal control structure and the
independence and performance of the internal audit department and the
independent public accountants. Its primary duties are to serve as an
independent and objective party to monitor the Company&#146;s financial process and
internal control system, to review and appraise the audit effort of the
Company&#146;s independent accountants and to provide an open avenue of
communications among the independent accountants, financial, and senior
management and the Board of Directors. The Board of Directors has adopted a
written charter for the Audit Committee, which is filed as Exhibit&nbsp;99.2 to this
Annual Report. During the year, the Board of Directors examined the
composition of the Audit Committee in light of Nasdaq&#146;s corporate governance
rules and the regulations under the Securities Exchange Act of 1934 (&#147;Exchange
Act&#148;) applicable to audit committees. Based upon this examination, the Board
of Directors has determined that all members of the Audit Committee, except Mr.
Finlay, are &#147;independent directors&#148; within the meaning of Nasdaq&#146;s rules and
the Exchange Act and the rules and regulations thereunder. The Board of
Directors has also determined that Steven A. Carr qualifies as an &#147;audit
committee financial expert&#148; under the regulations of the Exchange Act.


<P align="left" style="font-size: 10pt">Nominations Committee



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has a Nominations Committee, which is comprised of
Messrs.&nbsp;Pergande, Carr and Parker. The Nominations Committee makes
recommendations to the Board of Directors regarding the size and composition of
the Board of Directors, establishes procedures for the nomination process,
recommends candidates for election to the Board of Directors and nominates
officers for election by the Board of Directors. The Board of Directors has
determined that all members of the Nominations Committee, except Mr.&nbsp;Parker,
are &#147;independent directors&#148;, as such term is defined under the corporate
governance rules of Nasdaq. Mr.&nbsp;Parker is not an &#147;independent director&#148; under
the Nasdaq&#146;s rules because he was Chief Executive Officer of the Company from
1994 until January&nbsp;1, 2004 and he received compensation for his services to the
Company in excess of $60,000. See Item&nbsp;11 of this Annual Report.
Notwithstanding Mr.&nbsp;Parker&#146;s employment relationship with the Company, the
Board of Directors


<P align="center" style="font-size: 10pt">89
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">believes that it is required in the best interest of the
Company and its shareholders for Mr.&nbsp;Parker to serve as a member of the
Nominations Committee because of his involvement with the Company since 1980
and his knowledge if corporate governance matters relating to Cayman Islands&#146;
corporations. The Nominations Committee Charter is filed as Exhibit&nbsp;99.3 to
this Annual Report.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To recommend a prospective nominee for the Nominations Committee&#146;s
consideration, a shareholder may submit the candidates name and qualifications
in writing to the Secretary of the Company, Trafalgar Place, West Bay Road,
Grand Cayman, Cayman Islands, B.W.I.


<P align="left" style="font-size: 10pt"><B>Code of Ethics</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Code of Ethics for the Chief Executive Officer and Chief Financial
Officer is filed as Exhibit&nbsp;14 to this Annual Report.


<P align="center" style="font-size: 10pt">90
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="116"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 11. EXECUTIVE COMPENSATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides summary information concerning the annual and
long-term compensation earned by the company&#146;s chief executive officer and each
of the four other most highly compensated executive officers of the company
during the fiscal years ended December&nbsp;31, 2003, 2002 and 2001:


<P align="left" style="font-size: 10pt"><B>Summary Compensation Table</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Annual Compensation</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Long-Term Compensation</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Other Annual</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>All Other</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Salary</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Bonus</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Underlying Options (2)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Compensation</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name and Principal Position</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Frederick W. McTaggart (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,533</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Director, President and
Chief Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,066</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,006.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">185,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,808</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gregory S. McTaggart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,759</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Vice President  &#151; Operations
(Cayman Islands)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,325</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Jeffrey M. Parker (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86,176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,507</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Chairman of the Board of
Directors</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,243</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95,895</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">316,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Peter D. Ribbins</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,646</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Director of Public Relations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,767</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,922</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Brent J. Santha</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77,040</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Chief Financial Officer and
Company Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">(1)&nbsp;Mr.&nbsp;Parker and Mr.&nbsp;McTaggart served as the Chief Executive Officer and
Chief Financial Officer, respectively, until January&nbsp;2004.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">(2)&nbsp;All options granted to Messrs.&nbsp;Frederick McTaggart, Gregory McTaggart,
Parker, Ribbins and Santha in 2001, 2002 and 2003 have an exercise price of
$10.84, $11.93 and $20.05 per share, respectively.


<P align="center" style="font-size: 10pt">91
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="font-size: 10pt"><B>Stock Option Grants</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides information, with respect to the chief
executive officer and the other named executive officers listed in the Summary
Compensation Table, concerning stock options granted on ordinary shares in
fiscal year 2003:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Potential Realizable Value</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% of Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>at Assumed Annual Rates</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Of Stock Price Appreciation</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>for Option Term</B></TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>To</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Employees</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise or</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>At 5% Annual</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>At 10% Annual</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Granted</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>in</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Base Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Growth Rate</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Growth Rate</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Fiscal Year</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($/Sh)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Date</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Frederick W. McTaggart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43,808</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">26</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/07/07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,138</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">282,275</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gregory S. McTaggart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">19</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/07/07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">204,483</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Jeffrey M. Parker</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">27</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/07/07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">290,710</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Peter D. Ribbins</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">21</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/07/07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225,244</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Brent J. Santha</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">04/07/07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,573</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>Stock Option Holdings</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2003:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="85%">
<!-- Begin Table Head -->

<TR valign="bottom">
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Number of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Value of Unexercised</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Underlying Unexercised</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>In-The-Money</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><BR>
<B>Acquired on</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Options at Fiscal Year End</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Options at Fiscal Year End</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Realized</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Unexercisable</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(#)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>($)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Frederick W. McTaggart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,607</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42,389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">477,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Gregory S. McTaggart</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Jeffrey M. Parker</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">823,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Peter D. Ribbins</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">536,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Brent J. Santha</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
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<P align="left" style="font-size: 10pt"><B>Incentive Compensation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Employee Share Incentive Plan</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since April&nbsp;8, 1987, we have maintained an employee share incentive plan
for our long-term employees who are not directors. To become eligible for the
employee share incentive plan, an employee must complete four years of service
with us and then retain the shares for an additional four years before he can
transfer or sell the shares. We may, at our option, offer to exchange the
redeemable preferred shares issued to the employee for an equal number of
freely tradable ordinary shares at any time during the four year holding
period. Within the four year holding period, if an employee ceases to be
employed by our company, our company, at the sole discretion of the board of
directors, may redeem the redeemable shares held by that employee for less than
four years at the price which the employee originally paid for the shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 using 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. The grant date is determined as 90&nbsp;days
after the date of the auditor&#146;s certificate on the financial statements for the
relevant year.. This option expires, unless exercised by the employee, within
thirty (30)&nbsp;days after the date of grant. Since we adopted the employee share
incentive plan, our employees have acquired 128,183 redeemable preferred
shares, of which 114,598 have been redeemed for an equal number of ordinary
shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Employee Share Option Plan</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2001, we established an employee share option plan for certain
long-term employees who participate in the share incentive plan. This plan was
introduced in order to compensate these employees for adjustments in the
employee share incentive plan. Under the share option plan, these employees
are granted in each calendar year, as long as the employee is a participant in
the employee share incentive plan, options to purchase ordinary shares of
common stock. The price at which the option may be exercised will be the
closing market price on the grant date, which is 90&nbsp;days after the date of the
auditor&#146;s certificate on the financial statements for the relevant year. 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 for
$nil consideration 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


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">commencing on the fourth anniversary of the grant date and
ending on the thirtieth day after the fourth
anniversary of the grant date.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Non-Executive Directors&#146; Share Plan</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1999, we implemented a 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. On January&nbsp;1, 2004, director&#146;s fees have been increased to take into
account the increasing responsibilities and duties of our directors, however
the share equivalent portion of these fees remains unchanged. Each board
meeting is worth the share equivalent of a $1,200 fee and each committee
meeting is worth the share equivalent of a $600 fee. Attendance fees are
accumulated throughout the year and then divided by the prevailing market price
on October 1st, or the next trading day if October 1st falls on a non-trading
day, of the preceding year to determine the number of shares to be granted for
the current year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the non-executive directors&#146; share plan, the directors, as
a group, as of December&nbsp;31, 2003, are entitled to receive 1,082 ordinary
shares, based upon the prevailing market price for the ordinary shares on
October&nbsp;1, 2003 of $17.75.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>Pension Plan</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As with every employer in the Cayman Islands, we are required by the
National Pension Law to provide a pension plan for our employees in the Cayman
Islands. We belong to both the Cayman Islands Chamber Pension Plan and the
Ocean Conversion Staff Pension Plan in the Cayman Islands. The Chamber Pension
Plan is a non-profit entity which is administered by the Bank of Butterfield
and the Ocean Conversion Staff Pension Plan has as its trustee, Colonial
Private Trustee Limited and is administered by the British Caymanian Insurance
Company Ltd.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Cayman Islands National Pensions Law, all employees between the
ages of 18 and 60 must contribute a specified minimum percentage of their
earnings to a 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 a pension
plan. An employee also has the option of contributing more than the prescribed
minimum. Our company is required to 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 various pension plans on a monthly basis.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Both plans are defined benefit plans, and as such 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 60 in the Cayman Islands), an employee
has the following options for receiving benefits:


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    <TD width="2%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Receive a cash payout if the employee&#146;s retirement savings is less
than $6,000;</TD>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the employee&#146;s
spouse&#146;s life if the employee is married at the time of retirement); or</TD>
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    <TD colspan="5">&nbsp;</TD>
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    <TD width="2%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
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</TABLE>


<P align="left" style="font-size: 10pt"><B>Employment Agreements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2004, we entered into a three-year employment agreement with
Jeffrey M. Parker, our Chairman of the Board of Directors. This agreement
supersedes all prior contracts and understandings between the parties save that
benefits earned or accrued under prior contracts shall not be extinguished or
affected. This agreement is subject to extension each year if the Board so
determines and shall be extended such that the term shall be for three years
from January 1st of the next following year. If we terminate Mr.&nbsp;Parker
without cause, he is entitled to twice the annual remuneration set out in this
agreement, adjusted for any annual increases received.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under a previous employment agreement for the year ended December&nbsp;31,
2003, which was amended to adjust the exercise price of his options from the
first seven trading days in the month of October of that year to December&nbsp;31st
of that year, Mr.&nbsp;Parker was granted an option to purchase 45,117 ordinary
shares at an exercise price of $20.05. For the year ended December&nbsp;31, 2002,
Mr.&nbsp;Parker was granted an option to purchase 26,159 ordinary shares at an
exercise price of $11.93 per share. All options granted to Mr.&nbsp;Parker after
March&nbsp;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. Under the terms of his
new employment agreement Mr.&nbsp;Parker will no longer be granted options.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2003, under the terms of his previous
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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each completed financial year beginning with the financial year 2004,
Mr.&nbsp;Parker will be paid a bonus calculated as (a)&nbsp;1.5% of the net profits for
that financial year, before charging this bonus, dividends, or crediting any
amounts arising from the re-valuation of our assets to a maximum of 40% of Mr.
Parkers annual remuneration 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. This
bonus shall be paid as to 75% in cash and , subject to approval of the members
of the Company at the Company&#146;s next annual general meeting, as to 25% in
ordinary shares of the Company valued at the market price at the close of
trading of the same on December&nbsp;31st of the relevant financial year. If such
approval is not obtained the bonus shall be paid entirely in cash.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;1, 2004, we entered into a three-year employment agreement with
Frederick W. McTaggart, our President and Chief Executive Officer. This
agreement supersedes all prior contracts and understandings between the parties
save that benefits earned or accrued under prior contracts shall not be
extinguished or affected. This agreement is subject to extension each year if
the Board so determines and shall be extended such that the term shall be for
three years from January 1st of the next following year. If we terminate Mr.
Frederick McTaggart without cause, he is entitled to twice the annual
remuneration set out in this agreement, adjusted for any annual increases
received.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under a previous employment agreement for the year ended December&nbsp;31,
2003, which was amended to adjust the exercise price of his options from the
first seven trading days in the month of


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">October of that year to December&nbsp;31st
of that year, Mr.&nbsp;Frederick McTaggart was granted an option to purchase 43,808
ordinary shares at an exercise price of $20.05. For the year ended December
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 the grant. Under the terms of his new employment
agreement Mr.&nbsp;Frederick McTaggart will no longer be granted options.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December&nbsp;31, 2003, 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each completed financial year beginning with the financial year 2004,
Mr.&nbsp;Frederick McTaggart will be paid a bonus calculated as (a)&nbsp;2% of the net
profits for that financial year, before charging this bonus, dividends, or
crediting any amounts arising from the re-valuation of our assets to a maximum
of 50% of Mr.&nbsp;Frederick McTaggart&#146;s annual remuneration 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. This bonus shall be paid as to 75% in cash and
subject to approval of the members of the Company at the Company&#146;s next annual
general meeting, as to 25% in ordinary shares of the Company valued at the
market price at the close of trading of the same on December&nbsp;31st of the
relevant financial year. If such approval is not obtained the bonus shall be
paid entirely in cash.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;30, 2003, we entered into an employment agreement with
Peter D. Ribbins, our former President and Chief Operating Officer and
currently Director of Public Relations. The agreement fixes the salary of
Mr.&nbsp;Ribbins until October&nbsp;31, 2005 and thereafter it will be determined by
mutual consent. For the financial year 2003 only, Mr.&nbsp;Ribbins will be
granted an option to purchase that number of ordinary shares which equals
5/6 of 1% of our net profit for the 2003&nbsp;year. The exercise price of the
options to be granted will be equal to the closing market price of the
ordinary shares on December&nbsp;31, 2003. For the year ended December&nbsp;31, 2003,
Mr.&nbsp;Ribbins was granted an option to purchase 34,957 ordinary shares at an
exercise price of $20.05 per share. For the year ended December&nbsp;31, 2002,
Mr.&nbsp;Ribbins was granted an option to purchase 25,767 ordinary shares at an
exercise price of $11.93 per share. 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. Mr.&nbsp;Ribbins&#146; employment
agreement will be terminated if he dies, becomes bankrupt, gives the Company
six months written notice or conducts himself in a manner that would justify
his dismissal under the Cayman Islands Labour Law. If his employment
agreement is terminated, any unvested options will automatically vest on a
pro rata basis based upon the number of months remaining in the year from
the date of termination. In addition, if the employment agreement is
terminated, Mr.&nbsp;Ribbins will be allowed to purchase the medical insurance
provided by us to our employees for the rest of his life.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We entered into a three-year employment agreement with Gregory McTaggart,
our Vice President of Operations. This agreement, as amended, 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.
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 was


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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">amended on December&nbsp;5, 2003 to be equal to the closing price of the Company&#146;s
ordinary shares on the 31st of December of the relevant financial year. For
the year ended December&nbsp;31, 2003, Mr.&nbsp;Gregory McTaggart was granted an option
to purchase 31,735 ordinary shares at an exercise price of $20.05 per share.
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 per share. 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of our recent acquisitions, we 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 as at the end of each fiscal year of
Ocean Conversion (BVI)&nbsp;Ltd. and DesalCo (Barbados) Ltd. (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 as at the
end of each fiscal year of Waterfields Company Limited and Belize Water
Limited (before charging this bonus, dividends or crediting any amounts
arising from the re-valuation of our assets).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also entered into a two-year employment agreement with Brent
Santha, our Vice President of Finance and Assistant Secretary. During 2003,
Mr.&nbsp;Santha was appointed Company Secretary and resigned from the position of
Assistant Company Secretary and on January&nbsp;1, 2004, Mr.&nbsp;Santha was appointed
Chief Financial Officer. Mr.&nbsp;Santha is currently in negotiations to amend
his employment agreement to incorporate his appointment of Chief Financial
Officer and is still working under the existing agreement. This agreement
will expire on January&nbsp;1, 2005, unless extended by agreement of the parties.
In addition to his salary, Mr.&nbsp;Santha is entitled to an annual bonus as
determined at the discretion of the President of our company 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. For the year ended
December&nbsp;31, 2003, Mr.&nbsp;Santha was granted an option to purchase 10,487
ordinary shares at an exercise price of $20.05 per share. 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.


<P align="left" style="font-size: 10pt"><B>Compensation Committee Interlocks and Insider Participation in Compensation Decisions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee of the Board of Directors consists of
Richard Finlay, Clarence Flowers, Jr., and Wilmer Pergande. No member of
the Compensation Committee is, or at any time in the past has been, an
officer or employee of the Company or any of its subsidiaries.


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<P align="left" style="font-size: 10pt"><B>Indemnification Provision</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to 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. Our Articles of Association do not indemnify 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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Company has approved that the Company enter
into indemnification agreements with each officer and director, pursuant to
which they would be indemnified from and against all actions, proceedings,
costs, charges, damages and expenses incurred in connection with the execution
of their duties on behalf of the Company, except for willful neglect or default
in connection with the exercise of their duties. The shareholders of the
Company must approve these agreements before they will be effective.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.


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<A name="117"></A>
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<P align="left" style="font-size: 10pt"><B>ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth the beneficial ownership of our ordinary
shares, par value CI$1.00 per share, of which 5,746,467 are outstanding as of
March&nbsp;29, 2004, and our redeemable preferred shares, par value CI$1.00 per
share, of which 13,585 are outstanding as of March&nbsp;29, 2004 by:


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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each person or entity that we know beneficially owns more
than 5% of our ordinary shares or redeemable preferred shares;</TD>
</TR>

</TABLE>


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    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>each of our executive officers and directors; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all of our officers and directors as a group.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Title of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Identity of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Class</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Person or Group</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Class</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jeffrey M. Parker,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">281,708</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.9</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Frederick W. McTaggart,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, President and</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">104,477</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.8</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Peter D. Ribbins,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director Public Relations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">193,579</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3.4</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Gregory S McTaggart,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President - Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Cayman Islands)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">102,866</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.8</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Kenneth R. Crowley,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Overseas</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Robert B. Morrison,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Purchasing</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">and Information Technology</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">100</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Gerard J. Pereira,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President of Engineering</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Brent J Santha,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer and</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Company Secretary</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11,687</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Bruce Bugg, Jr.,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,656</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">William T Andrews,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">254</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Brian E. Butler,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21,500</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Steven A. Carr,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">46,252</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Carson K. Ebanks,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&#151;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard L. Finlay,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10,574</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Clarence B. Flowers, Jr.,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,204</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">99
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Title of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Identity of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Percentage</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Class</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Person or Group</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of Class</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmer Pergande,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,803</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Raymond Whittaker,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12,953</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Ordinary Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Directors and Executive</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Officers as a Group</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(17 persons)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">800,613</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Gregory McTaggart</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">297</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Directors and Executive</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Officers as a group (1</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">person)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">297</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.1</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Abel Castillo</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations Manager</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,388</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17.6</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Margaret Julier,</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Office Manager</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,274</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16.7</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">William Banker</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations Manager</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,570</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18.9</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chet Ritch</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">887</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6.5</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Helbert Rodriquez</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">868</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6.4</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em; background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ivan Tabora</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">731</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5.4</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Redeemable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Elizabeth Triana</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Preferred Shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Customer Service</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">744</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5.5</TD>
    <TD nowrap valign="top">%</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An asterisk (*) in the above table indicates less than one percent


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address for Jeffrey Parker, Frederick McTaggart, Peter Ribbins,
Gregory McTaggart, Kenneth Crowley, Robert Morrison, Gerard Pereira, Brent
Santha Abel Castillo, Margaret Julier, William Banker, Chet Ritch, Helbert
Rodriquez, Ivan Tabora and Elizabeth Triana is as follows: c/o Consolidated
Water Co. Ltd., Trafalgar Place, West Bay Road, P.O. Box 1114GT, Grand Cayman,
B.W.I. The address for each of J. Bruce Bugg Jr. and Argyle/Cay-Water, Ltd. is
c/o Argyle Investment Corp., 1500 Nations Bank Plaza, 300 Convent Street, San
Antonio, Texas 78205. The address for William Andrews is &#147;De Salt House&#148;, 7
Salt Kettle Lane, Paget PG 01, Bermuda. The address for Brian Butler is P.O.
Box 2581GT, Grand Cayman, B.W.I. The address for Steven A. Carr c/o Carr &#038;
Associates, 4103 South Texas Avenue, Suite&nbsp;209, Bryan, Texas 77802. The
address for Caron Ebanks is Government Administration Building, Georgetown,
Grand Cayman, B.W.I. The address for Richard Finlay is P.O. Box 31442 SMB,
Grand Cayman, B.W.I. The address for Clarence Flowers, Jr. is P.O. Box 2581GT,
Grand Cayman, B.W.I. The address for Wilmer Pergande is 3724 Bengal Road, Gulf
Breeze, Florida 32561. The address for Raymond Whittaker is P.O. Box 1982GT,
Grand Cayman, B.W.I.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;18, 2004 are deemed outstanding for that
person but are not deemed outstanding for computing the percentage of ownership
of any other person. Of the 281,708 ordinary shares owned by Mr.&nbsp;Parker, 5,100
have shared investment power and 99,783 are ordinary shares underlying options
granted to Mr.&nbsp;Parker, which may be exercised within 60&nbsp;days after March&nbsp;18,
2004. Of the 104,477 ordinary shares owned by Mr.&nbsp;Frederick McTaggart, 98,768
are ordinary shares underlying options granted to Mr.&nbsp;Frederick McTaggart,
which may be exercised within 60&nbsp;days after
March&nbsp;18,


<P align="center" style="font-size: 10pt">100
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">2004. Of the 193,579 ordinary shares owned by Mr.&nbsp;Ribbins, 88,370
are ordinary shares underlying options granted to Mr.&nbsp;Ribbins, which may be
exercised within 60&nbsp;days after March&nbsp;18, 2004. Of the 102,866 ordinary shares
owned by Mr.&nbsp;Gregory McTaggart, 71,860 are ordinary shares underlying options
granted to Mr.&nbsp;Gregory McTaggart, which may be exercised within 60&nbsp;days after
March&nbsp;18, 2004 and 297 are redeemable preferred shares, which may be exercised
or converted within 60&nbsp;days after March&nbsp;18, 2004. Of the 11,687 ordinary
shares owned by Mr.&nbsp;Santha, 1,200 have shared investment power and 10,487 are
ordinary shares underlying options granted to Mr.&nbsp;Santha, which may be
exercised within 60&nbsp;days after March&nbsp;18, 2004. Of the 21,500 ordinary shares
owned by Mr.&nbsp;Butler, 3,500 have shared investment power.


<P align="left" style="font-size: 10pt"><B>Equity Compensation Plan Information</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information as of December&nbsp;31,
2003, with respect to compensation plans (including individual compensation
arrangements) under which our equity securities are authorized for issuance
under:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all compensation plans previously approved by our security holders; and</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all compensation plans not previously approved by our security holders.</TD>
</TR>

</TABLE>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of securities</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>remaining available for</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>future issuance under</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of securities to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Weighted-average</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>equity compensation</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>be issued upon exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>exercise price of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>plans (excluding</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>of outstanding options,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>outstanding options,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>securities reflected in</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>warrants and rights</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>warrants and rights</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>column (a))</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Plan category</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(b)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>(c)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Equity compensation
plans approved by
security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">428,373</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">14.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Equity compensation
plans not approved
by security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">51,045</TD>
    <TD nowrap>**</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12.47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">479,418</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">* Our equity compensation plans do not have any limits on the amount of shares
reserved for issuance under the plans.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">** Of these 51,045 shares, 51,045 are issuable pursuant to our employee stock
option plan. See Note 22 to the Notes to Consolidated Financial Statements.


<P align="center" style="font-size: 10pt">101
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="118"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For a discussion of the employment agreements we have with our executive
officers, see Part&nbsp;III, Item&nbsp;11 of this Annual Report.

<DIV align="left">
<A name="119"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the fees that the Company paid or accrued for
the audit and other services provided by KPMG and PricewaterhouseCoopers for
the fiscal years ended December&nbsp;31, 2003 and 2002.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Services</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollar Amount (2003)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Dollar Amount (2002)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Audit Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">122,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">134,652</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Audit-Related Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">121,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">273,956</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Tax Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">All Other Fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">288,372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">7,420</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">533,091</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">416,028</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The dollar amounts relating to KPMG for each of the fiscal years ended
December 31, 2003 and 2002 are $244,718 and $329,333, respectively. The dollar
amounts relating to PricewaterhouseCoopers for each of the fiscal years ended
December&nbsp;31, 2003 and 2002 are $nil and $86,695, respectively.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit Fees: This category includes the fees for the examination of the
Company&#146;s consolidated financial statements, review of the Company&#146;s Annual
Report on Form 10-K and the quarterly review of the interim financial
statements included in the Company&#146;s Quarterly Reports on Form 10-Q.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Audit-Related Fees: This category consists of services that are closely
related to the financial audit process and primarily consists of review of
reports filed and to be filed with the U.S. Securities and Exchange Commission
and accounting advice relating thereto.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Fees: This category relates to professional services for tax
compliance, tax advice, and tax planning. No such services were provided to
the Company during the years ended December&nbsp;31, 2003 and 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All Other Fees: During the year ended December&nbsp;31, 2003, KPMG and
PricewaterhouseCoopers provided non-audit services related to our recent
acquisitions and subsequent share offering. During the fiscal years ended
December&nbsp;31, 2002, KPMG and PricewaterhouseCoopers provided non-audit services
related to assistance with the implementation of FASB Statement No.&nbsp;123, a
United States standard for accounting for stock compensation expense and it
also includes fees from PricewaterhouseCoopers for successor auditor inquires
made by KPMG.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All audit and non-audit services performed by KPMG and
PricewaterhouseCoopers were approved by the Audit Committee. The Audit
Committee gives due consideration to the potential effect of non-audit services
on maintaining KPMG&#146;s audit independence.




<P align="center" style="font-size: 10pt">102
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="120"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PART IV</B>


<DIV align="left">
<A name="121"></A>
</DIV>

<P align="left" style="font-size: 10pt"><B>ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND
REPORTS ON FROM 8-K</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="79%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">(a)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Statements</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Consolidated Water Co. Ltd. financial statements found in ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA for the year ended December
31, 2003 are incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Pursuant to Rule&nbsp;3-09 of Regulation&nbsp;S-X, when either the first or third
condition set forth in Rule&nbsp;1-02(w), substituting 20&nbsp;percent for 10
percent, is met by a 50&nbsp;percent-or-less-owned person accounted for by the
equity method separate financial statements shall be filed. The Ocean
Conversion (BVI)&nbsp;Ltd. financial statements found in ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA for the year ended December&nbsp;31, 2003
are incorporated herein by reference.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2.</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Statement Schedules</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">None</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top"><B>3.</B></TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Exhibits</B></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Share Sale Agreement dated October&nbsp;4, 2002, among
Consolidated Water 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.
0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.
0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.
0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.
0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Share Sale Agreement dated October&nbsp;4, 2002, among
Consolidated Water Co. Ltd., North American Mortgage &#038; Finance
Corporation and Transcontinental</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">103
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Finance Corporation Ltd. (incorporated herein by reference to
the exhibit filed as a part of our Form&nbsp;8-K dated February
13, 2003, Commission File No.&nbsp;0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement to Amend Share Sale Agreement dated November&nbsp;29,
2002 among the Company North-American Mortgage &#038; 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement to Amend Share Sale Agreement dated December&nbsp;30,
2002 among the Company North-American Mortgage &#038; 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement to Amend Share Sale Agreement dated January&nbsp;31,
2003 among the Company North-American Mortgage &#038; 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement dated October&nbsp;8, 2002 between Consolidated Water
Co. Ltd. and Sage Water Holdings (BVI)&nbsp;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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amending Agreement dated November&nbsp;15, 2002 between the
Company and Sage Water Holdings (BVI)&nbsp;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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amending Agreement dated December&nbsp;18, 2002 between the
Company and Sage Water Holdings (BVI)&nbsp;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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amending Agreement dated January&nbsp;28, 2003 between the Company
and Sage Water Holdings (BVI)&nbsp;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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Share Sale Agreement dated December&nbsp;16, 2002 between
Consolidated Water Co. Ltd. and Bacardi &#038; 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement dated February&nbsp;7, 2003 between
Consolidated Water Co. Ltd. and North American Mortgage &#038; 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)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">104
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Memorandum of Association of
Consolidated Water 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Articles of Association of Consolidated
Water 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).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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).</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">An Amendment to a License to Produce Potable Water, dated
August&nbsp;15, 2001, between Consolidated Water 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fourth Amendment to a License to Produce Potable Water, dated
February&nbsp;1, 2003 between Consolidated Water 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement, dated December&nbsp;19, 2002, between Consolidated
Water Co. Ltd. (formerly Cayman Water Company Limited) and Safe
Haven 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top">Water Supply Agreement, dated December&nbsp;18, 2000, between
Consolidated Water Co. Ltd. and South Bimini International Ltd.
(incorporated herein by reference to the exhibit filed as a part of
our Form&nbsp;10-K dated March&nbsp;30, 2001, Commission File No.&nbsp;0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement, dated August&nbsp;30, 2000, between
Consolidated Water Co. Ltd. and Peter D. Ribbins (incorporated
herein by reference to the exhibit filed as a part of our Form&nbsp;10-K
dated March&nbsp;30, 2001, Commission File No.&nbsp;0-25248)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">105
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated September&nbsp;30, 2003 between Peter
Ribbins and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment of employment contract dated December&nbsp;5, 2003
between Peter Ribbins and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Engagement Agreement, dated December&nbsp;30, 1998 between
Consolidated Water Co. Ltd. and Jeffrey Parker (incorporated herein
by reference to the exhibit filed as part of our Registration
Statement on Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File No.
333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment of Engagement Agreement, dated October&nbsp;26, 1999,
between Consolidated Water Co. Ltd. and Jeffrey Parker (incorporated
herein by reference to the exhibit filed as part of our Registration
Statement on Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File No.
333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment of Engagement Agreement, dated March&nbsp;21,
2000, between Consolidated Water Co. Ltd. and Jeffrey Parker
(incorporated herein by reference to the exhibit filed as part of
our Registration Statement on Form&nbsp;F-2 dated May&nbsp;17, 2000,
Commission File No.&nbsp;333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated December&nbsp;5, 2003 between Jeffrey
Parker and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Contract, dated July&nbsp;12, 2000, between
Consolidated Water Co. Ltd. and Frederick W. McTaggart (incorporated
herein by reference to the exhibit filed as a part of our Form&nbsp;10-K
dated March&nbsp;30, 2001, Commission File No.&nbsp;0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated December&nbsp;5, 2003 between Frederick
McTaggart and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.
333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Employment Contract, dated April&nbsp;17,
2000, between Consolidated Water Co. Ltd. and Gregory Scott
McTaggart (incorporated herein by reference to the exhibit filed as
part of our Registration Statement on Form&nbsp;F-2 dated May&nbsp;17, 2000,
Commission File No.&nbsp;333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second amendment of employment contract dated December&nbsp;5,
2003 between Gregory McTaggart and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Service Agreement, between Cayman Water Company
Limited and consumers (incorporated herein by reference to the
exhibit filed as part of our Registration Statement on Form&nbsp;F-1
dated March&nbsp;26, 1996)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.
333-35356)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">106
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Option Deed, dated August&nbsp;6, 1997, between Cayman Water
Company Limited and American Stock Transfer &#038; Trust Company
(incorporated herein by reference to the exhibit filed on our Form
6-K, dated August&nbsp;7, 1997, Commission File No.&nbsp;0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase and Sale Agreement, dated December&nbsp;10, 2001,
between Consolidated Water Co. Ltd., Cayman Hotel and Golf Inc.,
Ellesmere Britannia Limited and Hyatt Britannia Corporation 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement, dated February&nbsp;1, 2002, between Consolidated
Water Co. Ltd. and Cayman Hotel and Golf Inc. (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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consulting Agreement, dated November&nbsp;17, 1998, between
Cayman Water Company Limited and R.J. Falkner &#038; Company, Inc.
(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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.29
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement, dated July&nbsp;24, 1995, between Cayman Water Company
Limited and Galleon Beach Resort Limited (incorporated herein by
reference to the exhibit filed as part of our Registration Statement
on Form&nbsp;F-2 dated May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement, dated February&nbsp;9, 1994, between Cayman Water
Company Limited and Widar Ltd. (incorporated herein by reference to
the exhibit filed as part of our Registration Statement on Form&nbsp;F-2
dated May&nbsp;17, 2000, Commission File No.&nbsp;333-35356)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease of Part, dated October&nbsp;13, 2000, between Consolidated
Water Co. Ltd. and Colmar Ltd. (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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease of Part, dated March&nbsp;1, 2003, between Consolidated
Water Co. Ltd. and Colmar Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.33
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease of Part, dated July&nbsp;1, 2003, between Consolidated
Water Co. Ltd. and Colmar Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.34
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease, dated December&nbsp;10, 2001, between Cayman Hotel and
Golf Inc. 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, 2001, Commission File No.&nbsp;0-25248)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">107
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.35
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease, dated April&nbsp;27, 1993, signed July&nbsp;18, 2001 between
Government of Belize and Belize Water 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, 2001, Commission File No.&nbsp;0-25248)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.36
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended lease, dated April&nbsp;27, 1993, signed January&nbsp;2, 2004
between Government of Belize and Belize Water Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.37
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Loan Agreement dated February&nbsp;7, 2003 between Consolidated
Water 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.38
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Contract dated February&nbsp;10, 2003 between Gerard
Pereira 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.39
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Contract dated February&nbsp;21, 2003 between Kenneth
Crowley 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.40
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Contract dated March&nbsp;7, 2003 between Robert
Morrison 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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.41
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.42
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.43
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to the Distributorship Agreement dated September
24, 2002 between DWEER Technologies Ltd. and DesalCo Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distributorship Agreement dated February&nbsp;26, 2004 between
Calder AG and DesalCo Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Abel Castillo and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Billy Banker and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.47
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Chet Ritch Consolidated Water Co. Ltd.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">108
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="9%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Exhibit Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.48
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between David Hooker and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Elizabeth Triana and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.50
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Helverth Rodriguez and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.51
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Ivan Tabora and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Luis Wood and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.53
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Maggie Julier and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Business Conduct and Ethics</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG (Cayman Islands) Chartered Accountants</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG (British Virgin Islands) Chartered Accountants</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Executive Officer pursuant to
Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Financial Officer pursuant to
Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Executive Officer pursuant to 18
U.S.C. Section&nbsp;1350, Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Financial Officer pursuant to 18
U.S.C. Section&nbsp;1350, Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Compensation Committee Charter</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Audit Committee Charter</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nominations Committee Charter</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">(b)&nbsp;Reports on Form&nbsp;8-K



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A report on Form 8-K was filed with the Securities and Exchange
Commission on November&nbsp;17, 2003 under Items 5 and 12.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">109
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>

<DIV align="left">
<A name="122"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="37%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>CONSOLIDATED WATER CO. LTD.</B></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: /s/ Jeffrey M. Parker</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jeffrey M. Parker</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board of directors</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Dated: April&nbsp;14, 2004



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Signature</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Jeffrey M. Parker</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Jeffrey M. Parker
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the board of directors
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Frederick W. McTaggart</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Frederick W. McTaggart
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Chief Executive Officer
and President (Principal Executive
Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Brent J. Santha</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Brent J. Santha
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Financial Officer (Principal
Financial and Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Peter D. Ribbins</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Peter D. Ribbins
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director of Public Relations
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ J. Bruce Bugg, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Bruce Bugg, Jr.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ William T. Andrews</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">William T. Andrews
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">110
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="13%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Signature</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Brian E. Butler</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Brian E. Butler
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Steven A. Carr</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Steven A. Carr
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Richard L. Finlay</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Richard L. Finlay
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Clarence B. Flowers, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Clarence B. Flowers, Jr.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Wilmer Pergande</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Wilmer Pergande
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Raymond Whittaker</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Raymond Whittaker
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Carson K. Ebanks</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Carson K. Ebanks
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">April&nbsp;14, 2004</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt">111


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

<P align="center" style="font-size: 10pt"><B>CONSOLIDATED WATER CO. LTD.</B>



<P align="center" style="font-size: 10pt"><B>INDEX TO EXHIBITS FILED WITH 10-K</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated September&nbsp;30, 2003 between Peter
Ribbins and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment of employment contract dated December&nbsp;5, 2003
between Peter Ribbins and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated December&nbsp;5, 2003 between Jeffrey
Parker and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment contract dated December&nbsp;5, 2003 between Frederick
McTaggart and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second amendment of employment contract dated December&nbsp;5,
2003 between Gregory McTaggart and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease of Part, dated March&nbsp;1, 2003, between Consolidated
Water Co. Ltd. and Colmar Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.33
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease of Part, dated July&nbsp;1, 2003, between Consolidated
Water Co. Ltd. and Colmar Ltd</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.36
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended lease, dated April&nbsp;27, 1993, signed January&nbsp;2, 2004
between Government of Belize and Belize Water Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.43
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to the Distributorship Agreement dated September
24, 2002 between DWEER Technologies Ltd. and DesalCo Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Distributorship Agreement dated February&nbsp;26, 2004 between
Calder AG and DesalCo Limited</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Abel Castillo and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Billy Banker and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.47
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Chet Ritch Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.48
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between David Hooker and Consolidated Water Co. Ltd.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Elizabeth Triana and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.50
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Helverth Rodriguez and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.51
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Ivan Tabora and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Luis Wood and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.53
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employee share option notice letter dated May&nbsp;26, 2003
between Maggie Julier and Consolidated Water Co. Ltd.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Code of Business Conduct and Ethics</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG (Cayman Islands) Chartered Accountants.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG (British Virgin Islands) Chartered Accountants</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Executive Officer pursuant to
Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Financial Officer pursuant to
Section&nbsp;302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Executive Officer pursuant to 18
U.S.C. Section&nbsp;1350, Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification by the Chief Financial Officer pursuant to 18
U.S.C. Section&nbsp;1350, Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Compensation Committee Charter</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Audit Committee Charter</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Nominations Committee Charter</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>3
<FILENAME>g88198exv10w11.txt
<DESCRIPTION>EMPLOYMENT CONTRACT/ PETER RIBBINS
<TEXT>
<PAGE>
                                                                   Exhibit 10.11


                               EMPLOYMENT CONTRACT


THIS AGREEMENT is made the 30th day of September, 2003

BETWEEN:          CONSOLIDATED WATER CO. LTD., a Cayman Islands company having
                  its registered office at Trafalgar Place, West Bay Road, P. O.
                  Box 1114GT, Grand Cayman, B.W.I. ("the Company")

AND:              PETER D. RIBBINS of P.O. Box 1114GT,
                  Grand Cayman, B.W.I. ("the Director of Public Relations")

IT IS AGREED as follows:-

EMPLOYMENT

1.                The Director of Public Relations is engaged and employed as an
                  Officer of the Company with responsibility for public
                  relations, excluding financial and investor relations, ("the
                  Capacities") commencing on the 16th day of October, 2000 but
                  subject to the termination provisions set out in Clause 15.

                  During the term of this Agreement the Board of Directors of
                  the Company ("the Board") will propose the appointment of the
                  Director of Public Relations as an Officer of the Company and
                  will vote in favor of such proposal.

REMUNERATION

2.                The salary of the Director of Public Relations is fixed until
                  October 31, 2005 at CI$50,000 per annum, payable monthly in
                  arrears, less deductions (other than for Medical Insurance)
                  and other amounts which the Company is, by law, entitled or
                  required to deduct from an employee's remuneration.

                  Thereafter, the salary of the Director of Public Relations
                  shall be as agreed between the parties hereto.

                  The Company will pay the full cost of providing Medical
                  Insurance, as generally provided for the Company's employees
                  from time to time, for the Director of Public Relations and
                  his family.



                                       1
<PAGE>
                  The Director of Public Relations will remain as a member of
                  the pension scheme provided for the Company's employees from
                  time to time and the Company will make contributions thereto
                  on behalf of the Director of Public Relations as it is
                  required to do pursuant to the law.

3.                The Director of Public Relations' salary will be reviewed as
                  of January 1st each year by the Company's Board who may grant
                  an increase (and/or make a payment by way of bonus) but who
                  shall not reduce the Director of Public Relations' salary
                  below the level set out in Clause 2 hereof.

AREA

4.                The Director of Public Relations' work will be performed
                  mainly in West Bay, Grand Cayman.

                  The Company reserves the right to transfer the Director of
                  Public Relations to any other place of business which it may
                  establish in the Cayman Islands.

RESPONSIBILITIES

5.                Until October 31, 2005, the Director of Public Relations must
                  devote substantially the whole of his time to the Company's
                  business and must use his best endeavors to promote the
                  Company's interests and welfare.

                  Except where such information is a matter of public record or
                  when required to do so by law, the Director of Public
                  Relations must not, either before or after this Agreement
                  ends, disclose to any person any information relating to the
                  Company, its business, customers, suppliers or employees or
                  any other confidential information of which he becomes
                  possessed while acting in the Capacities.

6.                The Director of Public Relations must perform the duties
                  reasonably required of and assigned to him by the President or
                  the Board.

                  The Director of Public Relations must perform his duties under
                  this Agreement during normal business hours from Monday to
                  Friday inclusive (save on bank holidays) but he accepts that
                  his duties, which include travelling on the company's business
                  both within the



                                       2
<PAGE>

                  Cayman Islands and abroad, may, from time to time, require
                  work to be undertaken on Saturdays, Sundays and bank and
                  public holidays.

                  The Director of Public Relations must report to the President,
                  diligently follow and implement all management policies and
                  decisions which the Board communicates to him and prepare and
                  forward in a timely manner all reports and accountings the
                  President or the Board requests.

                  The Director of Public Relations will not directly or
                  indirectly engage in any activities or work which are deemed
                  by the Board to be detrimental to the best interests of the
                  Company, provided, however, that the Company consents to the
                  Director of Public Relations continued involvement as a
                  shareholder and director of Eats Limited.

7.                In the case of inability to work due to illness or injury, the
                  Director of Public Relations must notify the Company
                  immediately and produce a medical certificate for any absence
                  longer than ten working days.

                  The Company may have the Director of Public Relations examined
                  by a doctor approved by it.

                  The Director of Public Relations agrees to submit to any
                  medical examination that the Company requires.

8.                The Director of Public Relations will be entitled to up to ten
                  (10) days sick leave per year without a medical certificate.

HOLIDAYS

9.                The Director of Public Relations is entitled, during every
                  twelve (12) month period of employment to the following
                  holidays:-

                  (a)      all public holidays in the Cayman Islands, and

                  (b)      six (6) weeks vacation at a time to be approved by
                           the President.


                                       3
<PAGE>

REIMBURSEMENT OF EXPENSES

10.               All expenses for which the Director of Public Relations claims
                  reimbursement must be within pre-approved budgets. Subject to
                  this, the Company must reimburse the Director of Public
                  Relations for the cost of entertaining the Company's customers
                  and travelling on the Company's business on the production of
                  the necessary vouchers or on the Director of Public Relations'
                  proving to the Company's satisfaction the amount that he has
                  spent for those purposes, even though he is unable to produce
                  vouchers.

NON-SOLICITATION

11.               The Director of Public Relations must not at any time while he
                  is acting in the Capacities or afterwards either on his own
                  account or for any other person, firm or company solicit,
                  interfere with or endeavor to entice away from the Company any
                  person, firm or company who at any time during or at the date
                  when his employment ends were employees or customers of or
                  were in the habit of dealing with the Company.

COMPANY DOCUMENTS

12.               All books, records, notes, files, memoranda, reports, customer
                  lists and other documents, and all copies of them, relating to
                  the Company's business which the Director of Public Relations
                  keeps, prepares or conceives or which become known to him or
                  which are delivered or disclosed to him or by any means come
                  into his possession, and all the Company's property and
                  equipment are and will remain the Company's sole and exclusive
                  property.

                  If the Director of Public Relations' employment is terminated
                  for any reason whether voluntarily or involuntarily or if the
                  Company at any time requests, the Director of Public Relations
                  must promptly deliver to the Company the originals and all
                  copies of all relevant documents that are in his possession,
                  custody or control, and any other property belonging to the
                  Company.

TERMINATION

13.               Except as provided herein and to the extent previously
                  accrued, all rights and obligations of the Company and the
                  Director of Public Relations shall cease if any of the
                  following events occurs:-



                                       4
<PAGE>

                  (a)      The Director of Public Relations dies.

                  (b)      The Director of Public Relations is adjudicated
                           bankrupt or makes any composition with his creditors.

                  (c)      The Director of Public Relations gives six (6) months
                           written notice to the Company to terminate this
                           Agreement.

                  (d)      with immediate effect if the Director of Public
                           Relations conducts himself in a manner which would
                           justify dismissal in accordance with the Labour Law.

                  Provided, however, that the Director of Public Relations shall
                  remain an employee of the Company during his life and be
                  entitled to participate, at his own expense, in any Medical
                  Insurance provided for the Company's Employees from time to
                  time.

NOTICES

14.               Any notice to be served under this Agreement must be in
                  writing and will be deemed duly served if, in the case of a
                  notice addressed to the Company, it is sent by registered post
                  or left at the Company's registered office, or, in the case of
                  a notice sent to the Director of Public Relations, it is
                  handed to him personally or is delivered to his last known
                  residential address in the Cayman Islands.

                  A notice sent by post will be deemed to be served on the third
                  day following the date on which it is posted.

PREVIOUS AGREEMENTS SUPERSEDED

15.               This Agreement supersedes all prior contracts and
                  understandings between the parties and may not be changed or
                  terminated orally.

                  No change or attempted waiver of any provision of this
                  Agreement will be binding unless in writing and signed by the
                  party against it is sought to be enforced.

CLAUSE HEADINGS

16.               Clause headings are included herein for convenience only and
                  have no legal effect.



                                       5
<PAGE>

APPLICABLE LAW AND JURISDICTION

17.               This Agreement will be construed and the legal relations
                  between the parties determined in accordance with the laws of
                  the Cayman Islands and the parties agree to submit to the
                  jurisdiction of the Cayman Island's courts.


                  Whenever possible, each provision of this Agreement will be
                  interpreted in such manner as to be effective and valid, but
                  if any provision of this Agreement or the application of it is
                  prohibited or held to be invalid, that prohibition or
                  invalidity will not affect any other provision, or the
                  application of any other provision which can be given effect
                  without the invalid provision or application, and, to this
                  end, the provisions of this Agreement are declared to be
                  severable.



EXECUTED by and on behalf of                CONSOLIDATED WATER CO. LTD.
The Company by

In the presence of:-

/s/ Tracey Ebanks                           /s/ Frederick McTaggart
- -----------------------------               ------------------------------------
Witness                                     Director
Tracey Ebanks                               Frederick McTaggart

EXECUTED by the
Director of Public Relations
In the presence of:-

/s/ Tracey Ebanks                           /s/ Peter Ribbins
- -----------------------------               ------------------------------------
Witness                                     Peter D. Ribbins
Tracey Ebanks                               Peter Ribbins





                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>4
<FILENAME>g88198exv10w12.txt
<DESCRIPTION>AMENDMENT TO EMPLOYMENT CONTRACT/ PETER RIBBINS
<TEXT>
<PAGE>
                                                                   Exhibit 10.12

                        AMENDMENT OF EMPLOYMENT CONTRACT


THIS AGREEMENT is made this 5th day of December, 2003

BETWEEN:          CONSOLIDATED WATER CO. LTD., a Cayman Islands company having
                  its registered office at Trafalgar Place, West Bay Road, P.O.
                  Box 1114 GT, Grand Cayman, BWI ("the Company")

AND:              Peter D. Ribbins of P.O. Box 1114GT, Grand Cayman, BWI ("the
                  Director of Public Relations")

WHEREAS:

         A.       The Company and the Director of Public Relations entered into
                  an employment contract dated the 30th of September 2003("the
                  Employment Contract")

         B.       The parties are now desirous of amending the same, in
                  accordance with the terms of this Agreement.

NOW IN CONSIDERATION of the mutual covenants contained herein the parties agreed
that the Employment Contract shall be amended and/or rectified as follows:

                  By adding the following paragraph as the second paragraph of
                  Clause 3; "For the financial year 2003 only, the Director of
                  Public Relations shall be granted an option to purchase for
                  cash payable in full upon the exercise of the option, a number
                  of Ordinary Shares which equals the number of US$ which
                  represents 5/6 x 1% of the net profit of the Company for the
                  2003 financial year at the closing market price of the
                  Company's Ordinary Shares on December 31, 2003. The options
                  may be exercised at any time after they are granted and before
                  the close of business on the day before the third anniversary
                  of the Auditor's Report on the financial statements for the
                  2003 financial year."

THE PARTIES HERETO have set their hands and seals the day and date first above
written.



<PAGE>



SIGNED AND SEALED in the presence of:)     CONSOLIDATED WATER CO. LTD.
                                     )
                                     )     /s/ Frederick McTaggart
                                     )     -------------------------------------
                                     )
/s/ Brent Santha                     )     Frederick McTaggart
- -----------------------------------  )     -------------------------------
witness
Brent Santha

SIGNED AND SEALED in the presence of:)
                                     )
                                     )
                                     )
                                     )
/s/ Brent Santha                     )     /s/ Peter Ribbins
- -----------------------------------  )     -------------------------------------
witness                                    Peter D Ribbins
Brent Santha


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>5
<FILENAME>g88198exv10w16.txt
<DESCRIPTION>EMPLOYMENT CONTRACT/ JEFFREY PARKER
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.16

                              ENGAGEMENT AGREEMENT


THIS AGREEMENT is made the 5th day of December 2003


BETWEEN: CONSOLIDATED WATER CO. LTD.,
                  a Cayman Islands company having its registered office at
                  Trafalgar Place, West Bay Road
                  P.O. Box 1114 GT, Grand Cayman, B.W.I.
                  ("the Company")

AND               JEFFREY M. PARKER
                  of 81 Drake Quay, Governors Harbour,
                  P. O. Box 30749 SMB, Grand Cayman, B.W.I.
                  ("the Chairman")


IT IS HEREBY AGREED:-

ENGAGEMENT

1.       Subject to satisfaction of the condition precedent in Clause 11 on or
         before December 31, 2003, the Chairman is engaged as Chairman of the
         Company for three (3) years commencing on the 1st day of January, 2004
         subject to the termination provisions set out in Clauses 17 and 18
         hereof and to the extension provisions set out in Clause 19 hereof.

REMUNERATION

2.       The Chairman's remuneration will be US$165,000.00 per annum, payable
         monthly in arrears.

3.       In addition, during the term of this Agreement, the Company will pay
         the full cost of providing medical insurance, as generally provided for
         the Company's employees from time to time, for the Chairman and his
         spouse.

4.       In addition, during the term of this Agreement, the Company will make
         contributions to a pension scheme, of the Chairman's choice but
         approved pursuant to the National Pensions Law (1998 Revision) of the
         Cayman Islands, in the same manner and on the same basis as it makes
         contributions, from time to time, in respect of its other employees
         pursuant to the National Pensions Law.



<PAGE>

5.       The Chairman's remuneration will be reviewed by the Company's Board of
         Directors (the "Board") as of January 1st each year who may grant an
         increase but shall not reduce the Chairman's salary below the level set
         out in Clause 2 hereof.

6.       Further, for each completed financial year beginning with the financial
         year 2004, not later than 28th February following the end of each
         financial year, the Chairman will be paid a bonus calculated as
         follows;

         (a)      PERFORMANCE BONUS

                  1.5% of the net profit of the Company (calculated before
                  charging this bonus and before charging dividends or crediting
                  any amount accruing from the re-valuation of the Company's
                  assets) to a maximum of 40% of the remuneration set out in
                  Clause 2 (as adjusted by Clause 5); and

         (b)      INCREMENTAL BONUS

                  15% of the amount, if any, by which the net profits
                  (calculated as in clause 6(a)) of the Company for that
                  financial year exceeds the highest annual net profit earned by
                  the Company in any prior financial year.

         The aggregate of the Performance Bonus and the Incremental Bonus, if
         any, calculated aforesaid shall be paid as to 75% in cash and, subject
         to approval of the members of the Company at the Company's next annual
         general meeting, as to 25% in ordinary shares of the Company valued at
         the market price at the close of trading of the same on December 31st
         of the relevant financial year (or if such day is not a trading day, at
         the close of trading on the preceding trading day). If such approval is
         not obtained, the aggregate of the Performance Bonus and the
         Incremental Bonus shall be paid entirely in cash.

RESPONSIBILITIES

7.       The Chairman shall use his best endeavors to promote the Company's
         interests and welfare.

8.       The Chairman shall perform the duties commonly performed by a Chairman
         of a publicly listed company and also the duties reasonably required of
         and assigned to him by the Board including, without limiting the
         generality of the foregoing, management of corporate governance issues,
         financial public relations and identification and initial investigation
         of new projects.




                                       2
<PAGE>

         The Chairman shall discharge his duties in accordance with the
         directions of the Board. The Chairman accepts that his duties, which
         include traveling on the Company's business, both within the Cayman
         Islands and abroad, may from time to time require work to be undertaken
         on Saturdays, Sundays, bank and public holidays. The Chairman shall
         not, directly or indirectly, engage in any activities or work which are
         deemed by the Board to be detrimental to the best interests of the
         Company. The Board hereby consents to the Chairman's continued
         involvement with Moore Stephens, Chartered Accountants.

9.       In case of inability to work due to illness or injury, the Chairman
         shall notify the Company immediately and produce a medical certificate
         for any absence longer than ten working days.

10.      The Chairman is entitled to up to ten (10) days sick leave per year
         without a medical certificate.

11.      This Agreement is conditional upon the Chairman undergoing a medical
         examination in such form as is usual and customary in the Cayman
         Islands, the results of which demonstrate to the Board's satisfaction
         that the Chairman is capable of performing the responsibilities set
         forth in Clauses 7 and 8.

HOLIDAYS

12.      The Chairman is entitled, during every calendar year to the following
         holidays during which his remuneration will continue to be payable:-

         (a)      all public holidays in the Cayman Islands, and

         (b)      five (5) weeks vacation to be taken at a time to be approved
                  by the Board.

REIMBURSEMENT OF EXPENSES/FEES

13.      (a)      All expenses for which the Chairman claims reimbursement
                  shall be in accordance with any policies established by the
                  Board from time to time and shall be within the operating
                  budgets approved by the Board. The Company shall reimburse the
                  Chairman for the costs incurred by the Chairman in his
                  performance of the Capacity on production of the necessary
                  vouchers or, if he is unable to produce vouchers, on the
                  Chairman proving, to the Board's satisfaction, the amount he
                  has spent for those purposes.

                                       3
<PAGE>


         (b)      All fees and payments received by the Chairman for or in
                  relation to acting as director or officer of a subsidiary or
                  affiliate of the Company shall be retained by the Chairman who
                  shall not be required to account to the Company for the same.

NON-COMPETITION

14.      Providing that the Chairman may make investments in quoted companies
         not exceeding 1% of the issued share capital thereof, the Chairman
         agrees, as a separate and independent agreement, that he will not,
         during any period for which he has been remunerated hereunder, whether
         for his own account or for the account of any other person, either
         alone or jointly with or as manager, agent for or employee of or as
         consultant to any person, company or firm, directly or indirectly,
         carry on or be engaged or concerned or interested in any person firm or
         entity who conducts business identical to or similar to that conducted
         by the Company in any jurisdiction in which the Company carries on
         business (whether directly or indirectly).

COMPANY INFORMATION, DOCUMENTS, CONFIDENTIALITY AND NON-SOLICITATION

15.      (a)      All information, documents, books, records, notes, files,
                  memoranda, reports, customer lists and other documents, and
                  all copies of them, relating to the Company's business or
                  opportunities which the Chairman keeps, prepares or conceives
                  or which become known to him or which are delivered or
                  disclosed to him or which, by any means come into his
                  possession, and all the Company's property and equipment are
                  and will remain the Company's sole and exclusive property both
                  during the term of this Agreement and after the termination or
                  expiration hereof;

         (b)      If this Agreement is terminated for any reason, or if the
                  Company at any time requests, the Chairman must promptly
                  deliver to the Company the originals and all copies of all
                  relevant documents that are in his possession, custody or
                  control together with any other property belonging to the
                  Company.

         (c)      The Chairman shall not, at any time during the term of this
                  Agreement or after it's termination or expiration, either for
                  his own account or for the account of any other person, firm
                  or company, solicit or endeavor to entice away from the
                  Company any person, firm or company who, at any time during
                  the currency of this Agreement were employees, customers or
                  suppliers of or were in the habit of dealing with the Company.

16.      Except where such information is a matter of public record or when
         required to do so by law, the Chairman must not, either before or after


                                       4
<PAGE>

         this Agreement ends, disclose to any person any information relating to
         the Company or its customers of which he becomes possessed while acting
         as Chairman.

TERMINATION

17.      This Agreement shall terminate and, except to the extent previously
         accrued, all rights and obligations of both parties under it shall
         cease if any of the following events occurs:-

         (a)      The Chairman dies.

         (b)      The Chairman is adjudicated bankrupt or makes any arrangement
                  or composition with his creditors.

         (c)      In any year, the company does not extend the term of this
                  Agreement in accordance with Clause 19 hereof.

         (d)      The Chairman gives six (6) months written notice of
                  termination to the Company.

18.      (a)      The Company may, by written notice, terminate this Agreement
                  with immediate effect if the Chairman conducts himself in a
                  manner that would justify immediate dismissal of an employee
                  in accordance with the Labour Law and, except to the extent
                  previously accrued, all rights and obligations of both parties
                  under this Agreement shall cease.

         (b)      If through physical or mental illness, the Chairman is unable
                  to discharge his duties for sixty (60) successive days, as to
                  which a certificate by any doctor appointed by the Company
                  shall be conclusive, the Chairman shall be relieved of his
                  duties and his salary shall be reduced to US$1,000.00 per
                  annum and his bonus entitlement suspended, and the Company
                  shall continue to pay the full cost of providing medical
                  insurance for the Chairman and his immediate family together
                  with pension contributions (such contributions to be based on
                  the pension contribution made on behalf of the Chairman for
                  the previous financial year of the Company) for a period of
                  two years at which time his employment shall be terminated.

Extension

19.      On or before June 30th of each year during the term of this Agreement
         (or any extension thereof), the Board shall determine whether to extend
         the term of this Agreement, and if the Board so determines the term of


                                       5
<PAGE>

         this Agreement shall be extended such that the term shall be for three
         years from January 1st of the next following year.

         In the event that the Board determines not to extend the Agreement in
         any year, the term of the Agreement shall expire on December 31stof
         that year and the Company, on that date, shall pay to the Chairman, in
         cash, twice the annual remuneration as set out in Clause 2 as adjusted
         by Clause 5 hereof.

NOTICES

20.      Any notice to be served under this Agreement must be in writing and
         shall be deemed to be duly served if it is handed personally to the
         Secretary of the Company or to the Chairman as the case may be, or if
         it is sent by registered post to the address at the head of this
         Agreement. A notice sent by post shall be deemed to be served on the
         third day following the date on which it was posted.

PREVIOUS AGREEMENTS SUPERCEDED

21.      This Agreement supersedes all prior contracts and understandings
         between the parties save that benefits earned or accrued under prior
         contracts shall not be extinguished or affected except to the extent
         that the words `each of the first seven trading days in the month of
         October' in clause 8(b)(ii) of the Second Amendment of Engagement
         Agreement dated March 21, 2000 shall be deleted and replaced with the
         words `December 31st' as they relate only to the options granted in
         respect of the calendar year 2003.

         No change or attempted waiver of any of the provisions hereof shall be
         binding unless in writing and signed by the party against whom it is
         sought to be enforced.

HEADINGS

22.      The headings herein are included for convenience only and have no legal
         effect.

APPLICABLE LAW AND JURISDICTION

23.      This Agreement shall be construed and the legal relations between the
         parties determined in accordance with the laws of the Cayman Islands to
         the jurisdiction of the courts of which the parties hereby agree to
         submit. Whenever possible, each provision of this Agreement shall be
         interpreted in such manner as to be effective and valid. If any
         provision of this Agreement or the application of it is prohibited or
         is held to be invalid, that prohibition or invalidity shall not affect
         any other provision, or the application of any other provision which
         can be given effect without the invalid provision or prohibited
         application and, to this end, the provisions of this Agreement are
         declared to be severable.




                                       6
<PAGE>


EXECUTED FOR AND ON BEHALF OF             CONSOLIDATED WATER CO.
CONSOLIDATED WATER CO LTD.                LTD.
BY:
IN THE PRESENCE OF:

/s/ illegible                              /s/ Richard Finlay
- -----------------------------              -----------------------------------
WITNESS


EXECUTED BY JEFFREY M. PARKER
IN THE PRESENCE OF:


/s/ illegible                              /s/ Jeffrey Parker
- -----------------------------              -----------------------------------
WITNESS                                    JEFFREY M. PARKER




                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>6
<FILENAME>g88198exv10w18.txt
<DESCRIPTION>EMPLOYMENT CONTRACT/ FREDERICK MCTAGGART
<TEXT>
<PAGE>
                                                                   Exhibit 10.18


                                    ENGAGEMENT AGREEMENT


THIS AGREEMENT is made the 5th day of December 2003


BETWEEN:          CONSOLIDATED WATER CO. LTD.,
                  a Cayman Islands company having its registered office at
                  Trafalgar Place, West Bay Road P.O. Box 1114 GT, Grand Cayman,
                  B.W.I.
                  ("the Company")

AND:              FREDERICK W. MCTAGGART
                  of P. O. Box 321SAV, Grand Cayman, B.W.I.
                  ("the President")


IT IS HEREBY AGREED:-

ENGAGEMENT

1.       Subject to satisfaction of the condition precedent in Clause 11 on or
         before December 31, 2003, the President is engaged as President and
         Chief Executive Officer of the Company for three (3) years commencing
         on the 1st day of January, 2004 subject to the termination provisions
         set out in Clauses 18 and 19 hereof and to the extension provisions set
         out in Clause 19 hereof.

REMUNERATION

2.       The President's remuneration will be US$200,000.00 per annum, payable
         monthly in arrears.

3.       In addition, during the term of this Agreement, the Company will pay
         the full cost of providing medical Insurance, as generally provided for
         the Company's employees from time to time, for the President and his
         immediate family.

4.       In addition, during the term of this Agreement, the Company will make
         contributions to a pension scheme, of the President's choice but
         approved pursuant to the National Pensions Law of the Cayman Islands,
         in the same manner and on the same basis as it makes contributions,
         from time to time, in respect of its other employees pursuant to the
         National Pensions Law.



<PAGE>

5.       The President's remuneration will be reviewed by the Company's Board of
         Directors (the "Board") as of January 1st each year who may grant an
         increase but shall not reduce the President's salary below the level
         set out in Clause 2 hereof.

6.       Further, for each completed financial year beginning with the financial
         year 2004, not later than 28th February following the end of each
         financial year, the President will be paid a bonus calculated as
         follows;

         (a)      PERFORMANCE BONUS
                  2% of the net profit of the Company (calculated before
                  charging this bonus and before charging dividends or crediting
                  any amount accruing from the re-valuation of the Company's
                  assets) to a maximum of 50% of the remuneration set out in
                  Clause 2 (as adjusted by Clause 5); and

         (b)      INCREMENTAL BONUS
                  5% of the amount, if any, by which the net profits (calculated
                  as in clause 6(a)) of the Company for that financial year
                  exceeds the highest annual net profit earned by the Company in
                  any prior financial year.

         The aggregate of the Performance Bonus and the Incremental Bonus, if
         any, calculated aforesaid shall be paid as to 75% in cash and, subject
         to approval of the members of the Company at the Company's next annual
         general meeting, as to 25% in ordinary shares of the Company valued at
         the market price at the close of trading of the same on December 31st
         of the relevant financial year (or if such day is not a trading day, at
         the close of trading on the preceding trading day). If such approval is
         not obtained, the aggregate of the Performance Bonus and the
         Incremental Bonus shall be paid entirely in cash.

RESPONSIBILITIES

7.       The President's work will be performed mainly in West Bay, Grand
         Cayman.

         The Company reserves the right to transfer the President to any other
         place of business which it may establish in the Cayman Islands.

         The Company will provide the President with a motor vehicle which, in
         the sole opinion of the Company, is suitable for the discharge of the
         President's duties hereunder.




                                       2
<PAGE>

8.       The President shall devote substantially the whole of his time as is
         necessary to perform his functions hereunder and shall use his best
         endeavors to promote the Company's interests and welfare.

         The President shall perform the duties commonly performed by a
         President/Chief Executive Officer of a publicly listed company and also
         the duties reasonably required of and assigned to him by the Board
         which he shall discharge in accordance with directions of the Board.
         Without limiting the generality of the foregoing, the President shall
         serve on the board of directors of such subsidiaries or affiliates of
         the Company as the Board may direct.

         The President shall perform his duties under this Agreement during
         normal business hours from Monday to Friday inclusive (save on bank
         holidays) but he accepts that his duties, which include traveling on
         the Company's business both within the Cayman Islands and abroad, may,
         from time to time, require work to be undertaken on Saturdays, Sundays
         and bank and public holidays.

         The President shall report to the Board, diligently follow and
         implement all management policies and decisions which the Board
         communicates to him, prepare and forward in a timely manner all reports
         and accountings the Board requests and generally be responsible for the
         effective operation of the Company in accordance with pre-agreed
         financial and operating budgets.

         The President shall not directly or indirectly engage in any activities
         or work which are deemed by the Board to be detrimental to the best
         interests of the Company.

9.       In case of inability to work due to illness or injury, the President
         shall notify the Company immediately and produce a medical certificate
         for any absence longer than ten working days.

10.      The President is entitled to up to ten (10) days sick leave per year
         without a medical certificate.

11.      This Agreement is conditional upon the President undergoing a medical
         examination in such form as is usual and customary in the Cayman
         Islands, the results of which demonstrate to the Board's satisfaction
         that the President is capable of performing the responsibilities set
         forth in Clauses 7 and 8. The Company will meet the cost of such
         medical




                                       3
<PAGE>

         examination, or any amounts not covered by the Company's health
         insurance plan.

HOLIDAYS

12.      The President is entitled, during every calendar year to the following
         holidays during which his remuneration will continue to be payable:-

         (a)      all public holidays in the Cayman Islands, and

         (b)      four (4) weeks vacation to be taken at a time to be approved
                  by the Board.

REIMBURSEMENT OF EXPENSES/FEES EARNED

13.      (a)      All expenses for which the President claims reimbursement
                  shall be in accordance with any policies established by the
                  Board from time to time and shall be within the operating
                  budgets approved by the Board. The Company shall reimburse the
                  President for the costs incurred by the President in his
                  performance of the Capacity on production of the necessary
                  vouchers or, if he is unable to produce vouchers, on the
                  President proving, to the Board's satisfaction, the amount he
                  has spent for those purposes.

         (b)      All fees and payments received by the President for or in
                  relation to acting as director or officer of a subsidiary or
                  affiliate of the Company shall be the property of the Company
                  and the President shall account to the Company for the same.

NON-COMPETITION

14.      The President agrees, as a separate and independent agreement, that he
         will not during any period for which he has been remunerated hereunder,
         whether for his own account or for the account of any other person,
         firm or company during the term of this Agreement, either alone or
         jointly with or as manager, agent for or employee of or as consultant
         to any person, company or firm, directly or indirectly, carry on or be
         engaged or concerned or interested in any person firm or entity who
         conducts business identical to or similar to that conducted by the
         Company in any jurisdiction in which the Company carries on business
         (whether directly or indirectly).




                                       4
<PAGE>

COMPANY INFORMATION, DOCUMENTS, CONFIDENTIALITY, AND NON-SOLICITATION

15       (a) All information, documents, books, records, notes, files,
         memoranda, reports, customer lists and other documents, and all copies
         of them, relating to the Company's business or opportunities which the
         President keeps, prepares or conceives or which become known to him or
         which are delivered or disclosed to him or which, by any means come
         into his possession, and all the Company's property and equipment are
         and will remain the Company's sole and exclusive property both during
         the term of this Agreement and after the termination or expiration
         hereof;

         (b)      If this Agreement is terminated for any reason, or if the
                  Company at any time requests, the President must promptly
                  deliver to the Company the originals and all copies of all
                  relevant documents that are in his possession, custody or
                  control together with any other property belonging to the
                  Company, provided, however, that should the President require
                  access to copies of such documents for any reasonable purpose,
                  the Company shall provide the same at his request;

         (c)      The President shall not, at any time during the term of this
                  Agreement or after it's termination or expiration, either for
                  his own account or for the account of any other person, firm
                  or company, solicit, interfere with or endeavour to entice
                  away from the Company any person, firm or company who, at any
                  time during the currency of this Agreement were employees,
                  customers or suppliers of or were in the habit of dealing with
                  the Company.

16.      Except where such information is a matter of public record or when
         required to do so by law, the President must not, either before or
         after this Agreement ends, disclose to any person any information
         relating to the Company or its customers of which he becomes possessed
         while acting as President.

TERMINATION

17.      This Agreement shall terminate and, except to the extent previously
         accrued, all rights and obligations of both parties under it shall
         cease if any of the following events occurs:-

         (a)      The President dies.

         (b)      The President is adjudicated bankrupt or makes any arrangement
                  or composition with his creditors.



                                       5
<PAGE>

         (c)      On the 31st of December of any year in which the Company does
                  not extend the term of this Agreement in accordance with
                  Clause 19 hereof.

         (d)      The President gives six (6) months written notice of
                  termination to the Company.

18.      (a)      The Company may, by written notice, terminate this Agreement
                  with immediate effect if the President conducts himself in a
                  manner that would justify immediate dismissal of an employee
                  in accordance with the Labour Law and, except to the extent
                  previously accrued, all rights and obligations of both parties
                  under this Agreement shall cease.

         (b)      If through physical or mental illness, the President is unable
                  to discharge his duties for sixty (60) successive days, as to
                  which a certificate by any doctor appointed by the Company
                  shall be conclusive, the President shall be relieved of his
                  duties and his salary shall be reduced to US$1,000.00 per
                  annum and his bonus entitlement suspended, and the Company
                  shall continue to pay the full cost of providing medical
                  insurance for the President and his immediate family together
                  with pension contributions (such contributions to be based on
                  the pension contribution made on behalf of the President for
                  the previous financial year of the Company) for a period of
                  two years at which time his employment shall be terminated.;

EXTENSION

19.      On or before June 30th of each year during the term of this Agreement
         (or any extension thereof), the Board shall determine whether to extend
         the term of this Agreement, and if the Board so determines, the term of
         this Agreement shall be extended such that the term shall be for three
         (3) years from January 1st of the next following year.

         In the event that the Board determines not to extend the Agreement in
         any year, the term of the Agreement shall expire on December 31st of
         that year and the Company, on that date, shall pay to the President, in
         cash, twice the annual remuneration as set out in Clause 2 as adjusted
         by Clause 5 hereof.



                                       6
<PAGE>

NOTICES

20.      Any notice to be served under this Agreement must be in writing and
         shall be deemed to be duly served if it is handed personally to the
         Secretary of the Company or to the President as the case may be, or if
         it is sent by registered post to the address at the head of this
         Agreement. A notice sent by post shall be deemed to be served on the
         third day following the date on which it was posted.

PREVIOUS AGREEMENTS SUPERCEDED

21.      This Agreement supersedes all prior contracts and understandings
         between the parties save that benefits earned or accrued under prior
         contracts shall not be extinguished or affected except that the words
         "average closing market price of the Company's Ordinary Shares on each
         of the first seven trading days in the month of October" in Clause 5 of
         the Engagement Agreement dated July 12, 2000 shall be replaced with the
         words "closing market price of the Company's Ordinary Shares on
         December 31st" as they relate only to the options granted pursuant to
         that Engagement Agreement in respect of the calendar year 2003.

         No change or attempted waiver of any of the provisions hereof shall be
         binding unless in writing and signed by the party against whom it is
         sought to be enforced.

HEADINGS

22.      The headings herein are included for convenience only and have no legal
         effect.

APPLICABLE LAW AND JURISDICTION

23.      This Agreement shall be construed and the legal relations between the
         parties determined in accordance with the laws of the Cayman Islands to
         the jurisdiction of the courts of which the parties hereby agree to
         submit. Whenever possible, each provision of this Agreement shall be
         interpreted in such manner as to be effective and valid. If any
         provision of this Agreement or the application of it is prohibited or
         is held to be invalid, that prohibition or invalidity shall not affect
         any other provision, or the application of any other provision which
         can be given effect without the invalid provision or prohibited
         application and, to this end, the provisions of this Agreement are
         declared to be severable.



                                       7
<PAGE>

EXECUTED FOR AND ON BEHALF OF          CONSOLIDATED WATER CO.
CONSOLIDATED WATER CO LTD.             LTD.

BY:
IN THE PRESENCE OF:

/s/ illegible                          /s/ Rick Finlay
- ----------------------------------     -----------------------------------------
WITNESS                                DIRECTOR


EXECUTED BY FREDERICK W. MCTAGGART
IN THE PRESENCE OF:


/s/ Tracey Ebanks                      /s/ Frederick McTaggart
- ----------------------------------     -----------------------------------------
WITNESS                                FREDERICK W. MCTAGGART
Tracey Ebanks






                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.21
<SEQUENCE>7
<FILENAME>g88198exv10w21.txt
<DESCRIPTION>2ND AMENDT. EMPLOYMENT CONTRACT/ GREGORY MCTAGGART
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.21

                     SECOND AMENDMENT OF EMPLOYMENT CONTRACT


THIS AGREEMENT is made this 5th day of December 2003

BETWEEN:          CONSOLIDATED WATER CO. LTD., a Cayman Islands company having
                  its registered office at Trafalgar Place, West Bay Road, P.O.
                  Box 1114 GT, Grand Cayman, BWI ("the Company")

AND:              GREGORY S. MCTAGGART of 422 Ocean Club, P.O. Box 30984 SMB,
                  Grand Cayman, BWI ("the Vice President")

WHEREAS:

         A.       The Company and the Vice President entered into an employment
                  contract dated the 19th of August 1998, which was amended by
                  amendment of the employment contract dated the 7th of April
                  2000 ("the Employment Contract")

         B.       The parties are now desirous of amending the same, in
                  accordance with the terms of this Agreement, in order to
                  change the date on which the exercise price of options to
                  purchase Ordinary Shares granted to the Vice President is
                  established.

NOW IN CONSIDERATION of the mutual covenants contained herein the parties agreed
that the Employment Contract shall be amended and/or rectified as follows:

                  1. Clause 4 (c) of the First Amendment of the Employment
                  Contract shall be amended as follows;

                  Delete the words "average of the closing market price of the
                  Company's Ordinary shares on each of the first seven trading
                  days in the month of October of that financial year" and
                  substitute "closing price of the Company's Ordinary shares on
                  the 31st of December of the relevant financial year".

THE PARTIES HERETO have set their hands and seals the day and date first above
written.



<PAGE>



SIGNED AND SEALED in the presence of: )     CONSOLIDATED WATER CO. LTD.
                                      )
                                      )
                                      )     /s/ Frederick McTaggart
                                      )     -------------------------------
/s/ Brent Santa                       )     Frederick McTaggart
- -----------------------------------   )     -------------------------------
witness
Brent Santha

SIGNED AND SEALED in the presence of: )
                                      )
                                      )
                                      )
                                      )
/s/ Brent Santha                      )     /s/ Gregory McTaggart
- -----------------------------------   )     -------------------------------
witness                                     Gregory S. McTaggart
Brent Santha



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>8
<FILENAME>g88198exv10w32.txt
<DESCRIPTION>LEASE OF PART DATED MARCH 1, 2003
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.32

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 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


<PAGE>

                  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 colour 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 things 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.

         2.9.     Not to use or permit the Demised Premises to be used for
                  residential purposes or for overnight accommodation.



                                       3
<PAGE>

         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-enter upon the Demised Premises and if the Landlord shall
                  do so the term hereby created shall terminate absolutely.



                                       4
<PAGE>

         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 of 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.

         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


                                       5
<PAGE>

                  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.

         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.



                                       6
<PAGE>

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 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


                                       7
<PAGE>

                  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 include
                           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.

         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


                                       8
<PAGE>

                  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 or 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.

                               PERIOD OF EXTENSION
            FEBRUARY 1ST 2004 TO JANUARY 31ST 2005 CI$25,565.00 P.A.

Ref: Lease - Consolidated Water (B5 & C4) 2003

IN WITNESS WHEREOF the parties hereto have caused 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       )
acknowledged by                )
                               )                 /s/ Andrew Johnson
                               )                 ------------------------------
         Andrew N. Johnson     )                 Alternate Director
                               )
                               )                 /s/ Christopher Whorms
and                            )                 ------------------------------
         Christopher M. Whorms )                 Assistant Secretary
                               )


                                       9
<PAGE>

in the presence of:            )
                               )
/s/ illegible                  )
- ------------------------------ )



THE COMMON SEAL OF             )
CONSOLIDATED WATER CO. LTD.    )
was hereunto affixed by        )
                               )                 /s/ Frederick McTaggart
Frederick McTaggart            )                 ------------------------------
                               )                 Director
         and                   )
                               )                 /s/ Peter Ribbins
Peter Ribbins                  )                 ------------------------------
                               )                 Secretary
in the presence of:            )
                               )
/s/ Jeffrey Parker             )
- ------------------------------ )






                          CERTIFICATE OF IDENTIFICATION
                                   COLMAR LTD.
                   By: ANDREW N. JOHNSON - ALTERNATE DIRECTOR
               and by: CHRISTOPHER M. WHORMS - ASSISTANT SECRETARY

I HEREBY CERTIFY that the above named persons appeared before me on the
....10th.. day of......March..... 2003 and being known to me acknowledged the
above signature or mark to be theirs and that they had freely and voluntarily
executed this instrument and understood its contents.

                                  /s/ illegible
                 ----------------------------------------------
                 Signature and designation of person certifying


                                       10
<PAGE>

                          CERTIFICATE OF IDENTIFICATION
                           CONSOLIDATED WATER CO. LTD.

                     By:          PETER RIBBINS
                        ---------------------------------------


                     and by:        FREDERICK MCTAGGART
                             ----------------------------------

I HEREBY CERTIFY that the above named persons appeared before me on the
....4th... day of...March.. 2003 and being known to me acknowledged the above
signature or mark to be theirs and that they had freely and voluntarily executed
this instrument and understood its contents.

                                 Jeffrey Parker
                 ----------------------------------------------
                 Signature and designation of person certifying



                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>9
<FILENAME>g88198exv10w33.txt
<DESCRIPTION>LEASE OF PART DATED JULY 1, 2003
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.33

THIS LEASE is made the 1st day of July, 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 Nyi a 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
         February 1st 2005 ("the Commencement Date") to January 31st 2008
         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 February 1st 2005.

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 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.



<PAGE>

         2.2.     To pay to the Landlord on exchange and delivery of this Lease
                  a security deposit ("the Deposit") of CI$8,290.58 of which
                  CI$7,115.16 has already been paid and CI$1,175.42 shall be due
                  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 prorated amount equal to the amount
                  assessed by the Department of Environmental Health or other
                  government department responsible for the assessment and
                  collection of garbage fees 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
                  the Landlord's agents or contractors on its behalf to clean,
                  paint or treat as the case may be the outside of all doors


                                       2
<PAGE>

                  entering into corridors from the Demised Premises and the
                  outside of all window frames and glass in the Demised Premises
                  in such colour 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 things 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.

         2.9.     Not to use or permit the Demised Premises to be used for
                  residential purposes or for overnight accommodation.


                                       3
<PAGE>

         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-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


                                       4
<PAGE>

                  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 of 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.

         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


                                       5
<PAGE>

                  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.

         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


                                       6
<PAGE>

                  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 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


                                       7
<PAGE>

                  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 include
                           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.

         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 2 years ending on January 31, 2010
                  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.



                                       8
<PAGE>



                               THE FIRST SCHEDULE

ALL THOSE premises comprising 6 separate units of 640 square feet and 1 separate
unit of 512 square feet in Trafalgar Place ("the Building") known as B1 and B2
on the ground floor of Building B, B5 through B8 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 or 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

            FEBRUARY 1ST 2005 TO JANUARY 31ST 2006 CI$99,487.00 P.A.
            FEBRUARY 1ST 2006 TO JANUARY 31ST 2007 CI$99,487.00 P.A.
            FEBRUARY 1ST 2007 TO JANUARY 31ST 2008 CI$99,487.00 P.A.

                               PERIOD OF EXTENSION

            FEBRUARY 1ST 2008 TO JANUARY 31ST 2009 CI$102,471.00 P.A.
            FEBRUARY 1ST 2009 TO JANUARY 31ST 2010 CI$105,545.00 P.A.


Ref: Lease - Consolidated Water 2005


IN WITNESS WHEREOF the parties hereto have caused this Deed to be executed as
their respective acts and deeds the day and year before written.

                                       9
<PAGE>





THE COMMON SEAL OF                 )
COLMAR LTD.                        )
was hereunto affixed and           )
acknowledged by                    )
                                   )                 /s/ Andrew Johnson
                                   )                 --------------------------
         Andrew N. Johnson         )                 Alternate Director
                                   )
                                   )                 /s/ Christopher Whorms
and                                )                 --------------------------
         Christopher M. Whorms     )                 Assistant Secretary
                                   )
in the presence of:                )
/s/ illegible                      )
- ---------------------------------- )



THE COMMON SEAL OF                 )
CONSOLIDATED WATER CO. LTD.        )
was hereunto affixed by            )
                                   )                 /s/ Frederick McTaggart
Frederick McTaggart                )                 --------------------------
                                   )                 Director
         and                       )
                                   )                 /s/ Brent Santha
Brent Santha                       )                 --------------------------
                                   )                 Secretary
in the presence of:                )
/s/ Stephen Jacoby                 )
- ---------------------------------- )
Stephen Jacoby





                                       10
<PAGE>





                          CERTIFICATE OF IDENTIFICATION
                                   COLMAR LTD.
                   By: ANDREW N. JOHNSON - ALTERNATE DIRECTOR
               and by: CHRISTOPHER M. WHORMS - ASSISTANT SECRETARY

I HEREBY CERTIFY that the above named persons appeared before me on the
....29th.. day of......August.. 2003 and being known to me acknowledged the above
signature or mark to be theirs and that they had freely and voluntarily executed
this instrument and understood its contents.

                                  /s/ illegible
                 ----------------------------------------------
                 Signature and designation of person certifying


                          CERTIFICATE OF IDENTIFICATION
                           CONSOLIDATED WATER CO. LTD.

                     By:    FREDERICK MCTAGGART - DIRECTOR
                         --------------------------------------

                    and by:     BRENT SANTHA - SECRETARY
                           ------------------------------------

I HEREBY CERTIFY that the above named persons appeared before me on the ...19th.
day of...August.. 2003 and being known to me acknowledged the above signature or
mark to be theirs and that they had freely and voluntarily executed this
instrument and understood its contents.

                                 Jeffrey Parker
                 ----------------------------------------------
                 Signature and designation of person certifying



                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>10
<FILENAME>g88198exv10w36.txt
<DESCRIPTION>AMENDED LEASE
<TEXT>
<PAGE>
                                                                   Exhibit 10.36


                                     BELIZE
                              CERTIFICATE OF LEASE
                          THE REGISTERED LAND ACT, 1980
                          CHAPTER 194, REVISED EDITION
                                 LAWS OF BELIZE

                                LEASE / SUB-LEASE

REGISTERED SECTION                          BLOCK                      PARCEL
San Pedro                                     7                        1870/1
- ---------                                  -------                     ------

Area: 1.186 Acres

LESSOR            Government of Belize

RENT              $1.00 p.a.

TERM              33 years          27/4/93

THIS IS TO CERTIFY THAT    BELIZE WATER LTD.

of                     #37 Regent Street, Belize City, Belize District

Is now registered as the proprietor of the leasehold interest above referred to,
subject to the agreements and other matters contained in the registered lease,
to the entries in the register relating to the lease and to such of the
overriding interests set forth in section 31 of the Registered Land Ord. 1977 as
may for the time being subsist and affect the land comprised in the lease.

At the date thereof the following entries appear in the register relating to the
lease:

PART A- Property Section (EASEMENTS, ETC.)


PART B- Proprietorship Section (INHIBITIONS, CAUTIONS AND RESTRICTIONS)
- -----------------------------------------------------------------------
Not to transfer the land, lease or charge without written consent of Lessor.
Hereinafter subject to the lease conditions attached.


PART C- Incumbrances Section (LEASES, CHARGES,ETC.)


         GIVEN UNDER MY HAND AND THE SEAL OF THE LAND REGISTRY
                           THIS 2nd DAY OF January, 2004

                                           /s/ E. WELCH
                                           -------------------------------------
                                           REGISTRAR OF LANDS


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.43
<SEQUENCE>11
<FILENAME>g88198exv10w43.txt
<DESCRIPTION>AMENDMENT TO DISTRIBUTION AGREEMENT
<TEXT>
<PAGE>
                                                                   Exhibit 10.43


                             DATED FEBRUARY 26, 2004





                              DWEER TECHNOLOGY LTD.

                                      -AND-

                                 DESALCO LIMITED




               ---------------------------------------------------

                   Amendment to the Distributorship Agreement
                         dated 24 September 2002 between
                    DWEER Technology Ltd. and DesalCo Limited
                                   relating to
                                 DWEER Products

               ---------------------------------------------------







                                [Campbells Logo]
                         4th Floor, Scotiabank Building
                                 P.O. Box 884GT
                                  Grand Cayman
                                 Cayman Islands

<PAGE>
THIS AGREEMENT is made on February 26, 2004

BETWEEN:

(1)            DWEER TECHNOLOGY LTD., a Cayman Islands exempted company, the
               registered office of which is c/o Campbell Corporate Services
               Limited, 4th Floor, Scotiabank Building, P.O. Box 268GT, Grand
               Cayman, Cayman Islands (hereinafter "DWEER-Tech"); and

(2)            DESALCO LIMITED, a Cayman Islands company duly incorporated in
               the Cayman Islands, the registered office of which is Trafalgar
               Place, 1428A West Bay Road, Grand Cayman, Cayman Islands
               (hereinafter "DESALCO").

WHEREAS:

(A)            Pursuant to and upon the terms of a Distributorship Agreement
               dated 24 September 2002 between DWEER-Tech and DesalCo (the
               "DWEER-Tech Distributorship Agreement"), DWEER-Tech appointed
               DesalCo as its exclusive distributor for Products in the
               Territory (both terms as defined in the DWEER-Tech
               Distributorship Agreement) and gave DesalCo the exclusive right
               to sell and distribute the Products in the Territory.

(B)            Pursuant to and upon the terms of a Technology Licence relating
               to the manufacturing, marketing and sale of DWEER and LinX
               products, work exchangers and related products dated 30 April
               2003 ("the Technology Licence") between DWEER-Tech and Calder AG,
               a Swiss company, the registered office of which is
               Binzenholzstrasse 447, Industrie Nord, Ch-5704 Egliswil,
               Switzerland (hereinafter "Calder") DWEER-Tech granted Calder the
               exclusive right to, inter alia, design, manufacture and sell,
               inter alia, the Products worldwide, excluding the rights granted
               to DesalCo under the DWEER-Tech Distributorship Agreement which
               were reserved to DWEER-Tech.

(C)            By virtue of the fact that Calder has the exclusive right to
               manufacture the Products worldwide pursuant to the Technology
               Licence and will, during the term of the Technology Licence, be
               manufacturing and supplying Products on a worldwide basis, the
               parties hereto wish to suspend the DWEER-Tech Distributorship
               Agreement in order to allow Calder and DesalCo to enter into a
               new distribution agreement in the form of that attached at the
               Schedule hereto ("the Calder Distributorship Agreement"), in
               order to enable DesalCo to deal directly with Calder with respect
               to the

                                       1

<PAGE>

               distribution of Products in the Territory so long as the
               Technology Licence is in effect.

(D)            Concurrent with the execution of this Agreement, the Technology
               Licence has been amended to remove the exclusion of rights
               mentioned in recital B above and so as to permit and enable
               Calder and DesalCo to enter into the Calder Distributorship
               Agreement.

(E)            Pursuant to this Agreement, the DWEER-Tech Distributorship
               Agreement is to be suspended for so long as the Technology
               Licence is in effect, on the basis that, inter alia, all clauses
               thereof that are intended to survive termination (e.g. 6.5 -
               Confidentiality) remain in effect, that DWEER-Tech undertakes to
               inform DesalCo of termination of the Technology Licence, and that
               the suspension is to be lifted immediately upon termination of
               the Technology Licence.


NOW IT IS HEREBY AGREED as follows:-

1.       INTERPRETATION

         1.1      In this Agreement, save where otherwise provided or where the
                  context otherwise requires or admits, capitalised terms and
                  expressions defined in the DWEER-Tech Distributorship
                  Agreement shall have the same meaning herein.

         1.2      In this Agreement, save where otherwise provided or where the
                  context otherwise requires or admits:

                  (a)      references to any law or provision of law shall
                           include a reference to any law or provision of any
                           law which amends or replaces, or has amended or
                           replaced, it;

                  (b)      references to this Agreement or any other agreement
                           or document shall be construed as a reference to this
                           Agreement as the same may from time to time be
                           amended, varied or supplemented;

                  (c)      a "clause" or "schedule" is a reference to a clause
                           hereof or schedule hereto;

                  (d)      a "sub-clause" is a reference to a sub-clause of the
                           clause in which the reference appears;



                                       2
<PAGE>

                  (e)      any word, term or expression (including defined terms
                           and expressions) that imports any gender shall
                           include all genders and words and terms (including
                           defined terms and expressions) importing the singular
                           shall include the plural and vice versa.

         1.3      In this Agreement the headings are inserted for convenience
                  only and shall not affect the construction hereof.

2.       DWEER-TECH DISTRIBUTORSHIP AGREEMENT

         2.1      The DWEER-Tech Distributorship Agreement is hereby suspended
                  for so long as the Technology Licence remains in full force
                  and effect. In the event that the Technology Licence is
                  terminated, the DWEER-Tech Distributorship Agreement shall
                  revive.

         2.2      During the period that the DWEER-Tech Distributorship
                  Agreement is suspended:-

                  2.2.1    Neither party shall exercise any rights or perform
                           any obligations it has under the DWEER-Tech
                           Distributorship Agreement excepting only such rights
                           and obligations that have accrued or arisen prior to
                           the date of this Agreement; and

                  2.2.2    Notwithstanding the foregoing, the provisions of
                           clauses 6 and 10 of the DWEER-Tech Distributorship
                           Agreement shall continue to apply.

         2.3      In the event that the DWEER-Tech Distributorship Agreement
                  revives:

                  2.3.1    The DWEER-Tech Distributorship Agreement shall
                           thereafter apply and continue in force and effect as
                           if this Agreement had not been entered into and
                           executed by the parties hereto; and

                  2.3.2    Any rights, remedies or obligations of Calder which
                           are expressed or intended to continue after
                           termination of the Calder Distributorship Agreement
                           that are intended to protect the intellectual
                           property rights and interests of DWEER-Tech
                           (including without limitation the provisions of
                           clause 6 thereof) shall be enforceable by DWEER-Tech
                           instead of Calder.




                                       3
<PAGE>

         2.4      In the event that the Technology Licence is terminated
                  DWEER-Tech shall give DesalCo notice in writing thereof within
                  14 days of such termination.

         2.5      DWEER-Tech hereby advises DesalCo that the Technology Licence
                  includes a provision that Calder may not amend, waive or vary
                  any of the provisions of the Calder Distributorship Agreement
                  without DWEER-Tech's prior written permission (which may be
                  given or withheld at its exclusive discretion). Any amendment
                  to the Calder Distributorship Agreement shall not in any way
                  be deemed to vary the DWEER Distributorship Agreement.

         2.6      DesalCo shall use its best endeavours to enable DWEER-Tech to
                  conduct testing and experimentation of Products on plants
                  owned or operated by DesalCo or its Affiliates at which
                  Products are installed provided that DWEER-Tech shall
                  indemnify and save harmless DesalCo from any costs, expenses,
                  loss or damage, of whatever type and howsoever caused arising
                  from or relating to such tests or experiments.

3.       TERMINATION


         The DWEER-Tech Distributorship Agreement shall terminate forthwith upon
         termination of the Calder Distributorship Agreement unless the latter
         is caused by the termination of the Technology Agreement, but, for the
         avoidance of doubt, such termination shall be without prejudice to any
         rights, remedies or obligations that have accrued or arisen under or
         pursuant to the DWEER-Tech Distributorship Agreement prior to
         termination thereof and any rights, remedies or obligations which are
         expressed or intended to continue after termination thereof. For the
         avoidance of doubt and notwithstanding the foregoing, in the event that
         the Technology Licence is terminated (following which the Calder
         Distributorship Agreement is terminated pursuant to clause 9.4
         thereof), the DWEER-Tech Distributorship Agreement shall revive in
         accordance with Clause 2.1 of this Agreement.

4.       MISCELLANEOUS PROVISIONS

         4.1      Nothing in this Agreement shall create or be deemed to create
                  a partnership or relationship of principal and agent or
                  employer and employee between the parties.

         4.2      This Agreement together with the DWEER-Tech Distributorship
                  Agreement contains the entire agreement between the parties
                  with respect to the subject




                                       4
<PAGE>

                  matter hereof, supersede all previous agreements and
                  understandings between the parties with respect hereto, and
                  may not be modified except by an instrument in writing signed
                  by the duly authorised representatives of the parties.

         4.3      Each party acknowledges that in entering into this Agreement
                  it does not do so on the basis of, and does not rely on, any
                  representation, warranty or other provision except as
                  expressly provided herein, and all conditions, warranties, or
                  other terms implied by statute or common law are hereby
                  excluded to the fullest extent permitted by law.

         4.4      If any provision of this Agreement or any agreement entered
                  into pursuant hereto is or becomes illegal, invalid or
                  unenforceable in any jurisdiction, that shall not affect:-


                  (a)      the validity or enforceability in that jurisdiction
                           of any other provision of this Agreement or such
                           other agreement; or


                  (b)      the validity or enforceability in other jurisdictions
                           of that or any other provision of this Agreement or
                           such other agreement.

5.       JURISDICTION


         This Agreement shall be governed by and construed in all respects in
         accordance with the laws of the Cayman Islands and each party hereby
         submits to the non-exclusive jurisdiction of the Cayman Islands Courts.

6.       NOTICES


         All notices or other communications required or permitted to be given
         hereunder shall be in writing and shall be served by delivering the
         same by hand or by sending the same by facsimile or reputable courier
         service and shall be deemed given, if sent by hand, when delivered, if
         sent by facsimile, upon the date stated in the transmission report or,
         if sent by courier service, on delivery by the relevant courier
         service, in each case, to the address set out below or such other
         address as is notified by the relevant person from time to time,
         provided that a notice given in accordance with the above but received
         on a non-working day or after business hours in the place of receipt
         shall only be deemed to be given on the next working day in that place:





                                       5
<PAGE>

6.1      if to DWEER-Tech:

                  48 Par-la-Ville Road, Suite 1231
                  Hamilton HM 11, Bermuda
                  Attention:  Managing Director
                  Facsimile No:+1 (441) 292-2024

6.2      if to DesalCo:

                  Trafalgar Place
                  1428A West Bay Road
                  Grand Cayman, Cayman Islands
                  Attention:  President
                  Facsimile No:+1 (345) 949-2957

AS WITNESS whereof the parties have hereto set their hands the day and year
first before written.





                                       6
<PAGE>



                                  THE SCHEDULE


                      The Calder Distributorship Agreement







                                       7
<PAGE>





SIGNED FOR AND ON BEHALF OF              )
DESALCO LIMITED by                       )
Frederick W. McTaggart, Director         )     /s/ Frederick McTaggart
in the presence of:                      )     ---------------------------------
                                               Frederick W. McTaggart, Director

Witness: /s/ ERNST KUNDIG
         -----------------------------
Witness name: Ernst Kundig
Address: CH-J704 Egliswil, Switzerland
Occupation: Managing Director




SIGNED FOR AND ON BEHALF OF              )
DWEER TECHNOLOGY LTD. by                 )
William T. Andrews, Director             )     /s/ William Andrews
in the presence of:                      )     ---------------------------------
                                               William T. Andrews, Director

Witness: /s/ ERNST KUNDIG
         -----------------------------
Witness name: Ernst Kundig
Address: CH-5704 Egliswil, Switzerland
Occupation: Managing Director






                                       8

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.44
<SEQUENCE>12
<FILENAME>g88198exv10w44.txt
<DESCRIPTION>DISTRIBUTION AGREEMENT
<TEXT>
<PAGE>
                                                                   Exhibit 10.44



                             DATED FEBRUARY 26, 2004





                                    CALDER AG



                                      -AND-



                                 DESALCO LIMITED




                    ---------------------------------------


                            Distributorship Agreement
                                   relating to
                                 DWEER Products


                    ---------------------------------------








                                [Campbells Logo]
                         4th Floor, Scotiabank Building
                                 P.O. Box 884GT
                                  Grand Cayman
                                 Cayman Islands



<PAGE>






THIS DISTRIBUTORSHIP AGREEMENT is made on February 26, 2004

BETWEEN:

(1)            CALDER AG, a Swiss company, the registered office of which is
               Binzenholzstrasse 447, Industrie Nord, Ch-5704 Egliswil,
               Switzerland (hereinafter "CALDER"); and

(2)            DESALCO LIMITED, a Cayman Islands company duly incorporated in
               the Cayman Islands, the registered office of which is Trafalgar
               Place, 1428A West Bay Road, Grand Cayman, Cayman Islands
               (hereinafter "DESALCO").


WHEREAS:

(A)            Pursuant to and upon the terms of a Distributorship Agreement
               dated 24 September 2002 between DWEER Technology Ltd., a Cayman
               Islands company ("DWEER-Tech") and DesalCo (the " Original
               Distributorship Agreement"), DWEER-Tech appointed DesalCo as its
               exclusive distributor for Products in the Territory (both terms
               as defined in this Agreement) and gave DesalCo the exclusive
               right to sell and distribute the Products in the Territory.

(B)            Pursuant to and upon the terms of a Technology Licence relating
               to the manufacturing, marketing and sale of DWEER and LinX
               products, work exchangers and related products dated 30 April
               2003 between DWEER-Tech and Calder ("the Technology Licence")
               DWEER-Tech granted Calder the exclusive right to, inter alia,
               design, manufacture and sell, inter alia, the Products worldwide,
               excluding the rights granted to DesalCo under the Original
               Distributorship Agreement which were reserved to DWEER-Tech.

(C)            By virtue of the fact that Calder has the exclusive right to
               manufacture the Products worldwide pursuant to the Technology
               Licence and will, during the term of the Technology Licence, be
               manufacturing and supplying Products on a worldwide basis,
               DWEER-Tech and the parties hereto wish to suspend the Original
               Distributorship Agreement and enter into this Agreement, in order
               to enable DesalCo to deal directly with Calder with respect to
               the distribution of Products in the Territory so long as the
               Technology Licence is in effect.



                                       1
<PAGE>

(D)            Concurrent with the execution of this Agreement, the Technology
               Licence has been amended to remove the exclusion of rights
               mentioned in recital B above and so as to permit and enable
               Calder and DesalCo to enter into this Agreement.

(E)            Concurrent with the execution of this Agreement, the Original
               Distributorship Agreement has been suspended for so long as the
               Technology Licence is in effect, on the basis that, inter alia,
               all clauses thereof that are intended to survive termination
               (e.g. 6.5 - Confidentiality) remain in effect, that DWEER-Tech
               undertakes to immediately inform DesalCo of termination of the
               Technology Licence, and that the suspension is to be lifted
               immediately upon termination of the Technology Licence.


NOW IT IS HEREBY AGREED as follows:-

1.       INTERPRETATION

         1.1      In this Agreement, save where otherwise provided or where the
                  context otherwise requires or admits, the following terms and
                  expressions shall have the meaning set out below:


                  "AFFILIATE"               means at any time during the term of
                                            this Agreement or extension thereof
                                            with respect to a person, another
                                            person that directly, or indirectly
                                            through one or more intermediaries,
                                            controls, or is controlled by, or is
                                            under common control with, such
                                            person;


                  "DWEER
                  INTELLECTUAL
                  PROPERTY"                 any patent, copyright, registered or
                                            unregistered design, trade mark, or
                                            other industrial or intellectual
                                            property right subsisting worldwide
                                            in respect of the Products, and any
                                            applications for the same;


                  "ORIGINAL
                  DISTRIBUTORSHIP
                  AGREEMENT"                means the Original Distributorship
                                            Agreement as defined in the recitals
                                            hereto.

                  "PERSON"                  includes an individual, partnership,
                                            firm, company, association,
                                            unincorporated association or
                                            organisation or




                                       2
<PAGE>

                                            any entity or body of whatsoever
                                            nature including a governmental,
                                            quasi governmental, judicial or
                                            regulatory entity or any department,
                                            agency, or political subdivision
                                            thereof;


                  "PRODUCTS"                means the work-exchanger (also
                                            called pressure-exchanger)
                                            energy-recovery systems, components
                                            and sub-components thereof for use
                                            for water desalination using the
                                            reverse osmosis process manufactured
                                            and sold by Calder pursuant to the
                                            Technology Licence;


                  "TECHNOLOGY               means the Technology Licence as
                  LICENCE"                  defined in the recitals hereto.


                  "TERRITORY"               means:

                                            (a)   all countries, territories and
                                                  protectorates in or bordering
                                                  on the Gulf of Mexico and the
                                                  Caribbean Sea excluding,
                                                  except as provided for in
                                                  sub-clause (c) hereof, the
                                                  mainland of Mexico, Belize,
                                                  Guatemala, Honduras,
                                                  Nicaragua, Costa Rica, Panama,
                                                  Colombia and Venezuela; and


                                            (b)   the Bahamas, Barbados, and the
                                                  Turks and Caicos Islands; and

                                            (c)   the mainland territory within
                                                  30 miles of the Gulf of Mexico
                                                  or Caribbean Sea coasts of
                                                  Mexico, Belize, Guatemala,
                                                  Honduras, Nicaragua, Costa
                                                  Rica, Panama, Colombia and
                                                  Venezuela

                                            save that the continental United
                                            States and associated United States
                                            coastal islands (e.g. Florida Keys,
                                            but not the U.S. Virgin Islands or
                                            Puerto Rico) are specifically
                                            excluded;


                  "TRADE                    MARKS" the trademarks "DWEER" and
                                            "LinX" and all other names, symbols,
                                            trade and service marks (whether
                                            registered or unregistered) used by
                                            DWEER-Tech or Calder in




                                       3
<PAGE>

                                            connection with or in relation to
                                            the Products from time to time.

         1.2      In this Agreement, save where otherwise provided or where the
                  context otherwise requires or admits:

                  (a)      references to any law or provision of law shall
                           include a reference to any law or provision of any
                           law which amends or replaces, or has amended or
                           replaced, it;

                  (b)      references to this Agreement or any other agreement
                           or document shall be construed as a reference to this
                           Agreement as the same may from time to time be
                           amended, varied or supplemented;

                  (c)      a "clause" or "schedule" is a reference to a clause
                           hereof or schedule hereto;

                  (d)      a "sub-clause" is a reference to a sub-clause of the
                           clause in which the reference appears;

                  (e)      any word, term or expression (including defined terms
                           and expressions) that imports any gender shall
                           include all genders and words and terms (including
                           defined terms and expressions) importing the singular
                           shall include the plural and vice versa.

         1.3      In this Agreement the headings are inserted for convenience
                  only and shall not affect the construction hereof.

2.       DISTRIBUTION OF PRODUCTS IN THE TERRITORY

         2.1      For the period set out in clause 9 below, Calder hereby grants
                  DesalCo the exclusive right to distribute and sell the
                  Products in the Territory, and DesalCo agrees to act in such
                  capacity, subject to and upon the terms and conditions of this
                  Agreement. For the avoidance of doubt, DesalCo may sell and/or
                  deliver the Products purchased under this Agreement inside or
                  outside of the Territory, provided that such Products are to
                  be installed and used within the Territory.

         2.2      For the period that DesalCo has the exclusive right to
                  distribute and sell the Products in the Territory, Calder:



                                       4
<PAGE>

                  (a)      shall not appoint any other person as a distributor
                           or agent for the Products in the Territory;

                  (b)      shall not supply the Products to any person other
                           than DesalCo or, at the request of DesalCo,
                           Affiliates of DesalCo, who, to the knowledge of
                           Calder, intends to use or install such Products in
                           the Territory or intends to resell such Products to
                           any person who intends to use or install such
                           Products in the Territory without the prior written
                           consent of DesalCo; and

                  (c)      shall obtain a written undertaking, from all persons
                           to whom it sells the Products (other than DesalCo and
                           Affiliates of DesalCo which it supplies at the
                           request of DesalCo) that they (1) shall not use or
                           install such Products within the Territory and (2)
                           shall not resell such Products to any person who
                           intends to use or install such Products inside the
                           Territory.

         2.3      DesalCo and its Affiliates shall during the term of this
                  Agreement:

                  (a)      not obtain the Products from any person other than
                           Calder for use or installation inside the Territory;

                  (b)      not obtain any goods which compete with the Products;

                  (c)      not be concerned or interested, either directly or
                           indirectly, in the design, manufacture, distribution,
                           marketing or sale of any goods which compete with the
                           Products;

                  (d)      not sell the Products purchased from Calder under
                           this Agreement to any person who, to the knowledge of
                           DesalCo or its Affiliates, intends to use or install
                           such Products in any country which is outside the
                           Territory or intends to resell such Products to any
                           person who intends to use or install such Products
                           outside the Territory; and

                  (e)      obtain a written undertaking from all persons to whom
                           it sells the Products purchased from Calder under
                           this Agreement that they (1) shall not use or install
                           such Products outside the Territory and (2) shall not
                           resell such Products to any person who intends to use
                           or install such Products outside the Territory.



                                       5
<PAGE>

         2.4      For so long as this Agreement is in force:

                  (a)      in the event that DesalCo wishes to purchase any
                           Products from Calder for use or installation outside
                           the Territory, it shall place an order for such
                           Products with Calder stating that such Products are
                           intended for use or installation outside the
                           Territory and stating where such Products are
                           intended to be used, or installed; and

                  (b)      in the event that Calder agrees to supply such
                           Products, DesalCo may purchase such Products for use
                           or installation outside the Territory, free of any of
                           the restrictions contained in this Agreement, and the
                           provisions of this Agreement shall not apply to any
                           Products so purchased by DesalCo or any Affiliate
                           thereof Provided That, notwithstanding this, clause 6
                           of this Agreement shall apply to all information
                           disclosed to DesalCo by DWEER-Tech or Calder or which
                           relates to the Products and which comes into the
                           knowledge, possession or control of DesalCo whether
                           pursuant to or in connection with this Agreement or
                           pursuant to or in connection with the Original
                           Distributorship Agreement, and the provisions of
                           clauses 5.4 5.5, 5.7 and 5.8 of this Agreement shall
                           also apply outside the Territory.

         2.5      Any energy-recovery devices (including pressure-exchangers or
                  work-exchangers) for water desalination using the reverse
                  osmosis process to be installed on reverse osmosis
                  desalination units with a brine flowrate of less than 880 US
                  gallons per minute (200 m3/hour) shall be deemed to be goods
                  which do not compete with the Products.

         2.6      DesalCo shall be entitled to describe itself as the
                  "authorised exclusive distributor" for the Products in the
                  Territory but it shall not hold itself out as DWEER-Tech's or
                  Calder's agent for sales of the Products or as being entitled
                  to bind DWEER-Tech or Calder in any way.

         2.7      DesalCo shall not without the express written permission of
                  Calder sell through a sales agent or to a sub-distributor any
                  Products which it purchases from Calder under this Agreement.

         2.8      Nothing in this Agreement shall entitle DesalCo to;

                  (a)      any priority of supply in relation to the Products as
                           against Calder's other distributors or customers;



                                       6
<PAGE>

                  (b)      any right or remedy against Calder if any Product
                           supplied by Calder or its Affiliates is sold,
                           installed, or used in the Territory by any person
                           other than DesalCo or its Affiliates, provided that
                           Calder can show that it has obtained the written
                           undertaking required by sub-clause 2.2(c) above from
                           the person to whom Calder supplied the Product and
                           further provided that Calder shall, at the request
                           and expense of DesalCo, take all such steps as
                           DesalCo may reasonably require to assist DesalCo in
                           preventing the installation, use or resale of such
                           Products in the Territory.

         2.9      Calder shall not have any right or remedy against DesalCo if
                  any Product supplied by DesalCo or its Affiliates is sold,
                  installed or used outside the Territory by any person other
                  than DesalCo or its Affiliates, provided that DesalCo can show
                  that it has obtained the written undertaking required by
                  clause 2.3(e) above from the person to whom DesalCo supplied
                  the Product and further provided that DesalCo shall, at the
                  request and expense of Calder, take all such steps as Calder
                  may reasonably require to assist Calder in preventing the
                  installation, use or resale of such Products outside the
                  Territory.

3.       SUPPLY OF PRODUCTS

         3.1      Calder shall use its reasonable endeavours to supply the
                  Products to DesalCo in accordance with DesalCo's orders from
                  time to time and to deliver the same in accordance with
                  DesalCo's directions.

         3.2      Calder shall not be under any obligation to continue the
                  manufacture of all or any of the Products, and shall be
                  entitled to make such alterations to the specifications of the
                  Products as it may think fit from time to time and may, as it
                  thinks fit from time to time, change, amend or replace any
                  trademark used in relation to the Products (including, without
                  limitation, the Trade Marks).

         3.3      The prices for each order of Products to be supplied under
                  this Agreement shall be at least as good as and shall not be
                  more than the lowest price charged by Calder for comparable
                  orders of Products by other persons.

         3.4      Each order for Products by DesalCo shall be in writing and
                  shall constitute a separate contract and payment for such
                  Products shall be made by DesalCo without deduction or
                  set-off. The standard terms and conditions of sale of Calder
                  from time to time shall apply to all sales of the Products to
                  DesalCo under this



                                       7
<PAGE>

                  Agreement except to the extent that any of the same is
                  inconsistent with any of the provisions of this Agreement, in
                  which case the latter shall prevail, and subject to any
                  modifications thereto agreed to in writing between DesalCo and
                  Calder.

         3.5      Prior to acceptance of an order, DesalCo shall provide Calder
                  with comprehensive accurate drawings and plans showing the
                  manner in which Products will be incorporated into and
                  installed in the relevant desalination plant. DesalCo shall
                  give due regard to any observations or comments made by Calder
                  in relation thereto provided that Calder shall not thereby
                  incur any liability to DesalCo. Calder's observations and
                  comments shall be limited to compatibility of the Products
                  with the relevant desalination plant. Save as agreed in
                  writing by Calder, Calder shall not be liable or responsible
                  for the design, operation or functioning of any desalination
                  plants.

4.       MARKETING AND USE OF THE PRODUCTS

         4.1      DesalCo shall use its best endeavours to promote the sale and
                  use of the Products throughout the Territory and to satisfy
                  market demand therefor.

         4.2      DesalCo shall be entitled, subject to the terms of this
                  Agreement, to promote and market the Products in the Territory
                  in such manner as it may think fit, and in particular shall be
                  entitled to resell the Products to its customers on such terms
                  and at such prices as it may determine.

         4.3      DesalCo shall maintain such stocks of parts for the Products
                  as may be necessary to meet its customers' requirements.

         4.4      In connection with the promotion, marketing and the sale of
                  the Products, DesalCo shall:

                  (a)      make clear, in all dealings with its customers and
                           prospective customers, that it is acting as
                           distributor of the Products and not as agent of
                           Calder or DWEER-Tech;

                  (b)      comply with all legal requirements from time to time
                           in force relating to the storage and sale of the
                           Products;

                  (c)      use only such advertising, promotional, and selling
                           materials as are approved in writing by Calder;




                                       8
<PAGE>

                  (d)      provide an after sale service for customers in
                           relation to the Products on terms to be agreed from
                           time to time between DesalCo and Calder; and

                  (e)      advise Calder of projected sales of Products as early
                           as reasonably possible.

         4.5      Calder shall, from time to time, provide DesalCo with such
                  samples, catalogues, brochures, and up to date information
                  concerning the Products as Calder may consider reasonably
                  appropriate in connection with the sale of the Products in the
                  Territory, and Calder shall endeavour to answer as soon as
                  practicable any technical enquiries concerning the Products
                  which are made by DesalCo or its customers.

         4.6      DesalCo shall use its best endeavours to enable Calder to
                  conduct testing and experimentation of Products on plants
                  owned or operated by DesalCo or its Affiliates at which
                  Products are installed provided that Calder shall indemnify
                  and save harmless DesalCo from any costs, expenses, loss or
                  damage, of whatever type and howsoever caused arising from or
                  relating to such tests or experiments.

5.       INTELLECTUAL PROPERTY

         5.1      Calder hereby authorises DesalCo to use the Trade Marks in the
                  Territory on or in relation to the Products for the purposes
                  only of exercising its rights in performing its obligations
                  under this Agreement and Calder shall not so authorise any
                  other person, firm or company for such use provided that
                  Calder and/or DWEER-Tech may prohibit by notice in writing to
                  DesalCo any particular use of the Trade Marks which in the
                  opinion of Calder damages the goodwill of Calder or DWEER-Tech
                  in such Trade Marks.

         5.2      DesalCo shall ensure that each reference to and use of any of
                  the Trade Marks by DesalCo is in a manner, from time to time,
                  approved by Calder and, if requested, accompanied by an
                  acknowledgement, in a form approved by Calder, that the same
                  is a trade mark (or registered trade mark as the case may be)
                  of Calder or DWEER-Tech as the case may be.

         5.3      DesalCo shall not:

                  (a)      make any unauthorised modifications to the Products;



                                       9
<PAGE>

                  (b)      alter, remove, or tamper with any Trade Marks,
                           numbers or other means of identification used on or
                           in relation to the Products;

                  (c)      use any of the Trade Marks in any way that might
                           prejudice their distinctiveness or validity;

                  (d)      use in relation to the Products any trade marks other
                           than the Trade Marks without first obtaining the
                           prior written consent of Calder; or

                  (e)      use in the Territory any trade marks or trade names
                           so resembling any Trade Marks or the trade names of
                           DWEER-Tech or Calder as to be likely to cause
                           confusion or deception.

         5.4      Except as provided in clause 5.1, DesalCo shall have no rights
                  in relation to any of the Trade Marks or the goodwill
                  associated therewith, and DesalCo hereby acknowledges that,
                  except as expressly provided in this Agreement, it shall not
                  acquire any rights in respect thereof and that all such rights
                  and goodwill are, and shall remain, vested in DWEER-Tech or
                  Calder, as the case may be, and that all rights and benefits
                  arising from the use of the Trade Marks by DesalCo shall
                  accrue to and be for the benefit of Calder or DWEER-Tech as
                  the case may be.

         5.5      DesalCo shall, at the request and expense of Calder, take all
                  such reasonable steps as Calder may reasonably require to
                  assist Calder in maintaining the validity and enforceability
                  of any DWEER Intellectual Property during the term of this
                  Agreement.

         5.6      DesalCo shall, at the request and expense of Calder, execute
                  such agreements or licences in respect of the use of the Trade
                  Marks in the Territory as Calder may reasonably require,
                  provided that the provisions thereof shall not be more onerous
                  or restrictive than the provisions of this Agreement.

         5.7      DesalCo shall not, during the term of this Agreement,
                  challenge the validity of any DWEER Intellectual Property.

         5.8      DesalCo shall not do or authorise any third party to do any
                  act which would or might invalidate or be inconsistent with
                  any DWEER Intellectual Property and shall not omit or
                  authorise any third party to omit to do any act which, by its
                  omission, would have that effect or character.



                                       10
<PAGE>

         5.9      DesalCo shall promptly and fully notify Calder of any actual
                  threatened or suspected infringement in the Territory of any
                  DWEER Intellectual Property which comes to DesalCo's notice,
                  and of any claim by any third party so coming to its notice
                  that the importation of the Products into the Territory, or
                  their sale therein, infringes any rights of any other person,
                  and DesalCo shall at the request and expense of Calder do all
                  such things as may be reasonably required to assist Calder or
                  DWEER-Tech in taking or resisting any proceedings in relation
                  to any such infringement or claim.

6.       CONFIDENTIALITY

         6.1      Except as provided by clauses 6.3 and 6.4 below, DesalCo and
                  any Affiliate thereof shall at all times during the
                  continuance of this Agreement and thereafter:

                  (a)      use its best endeavours to keep all Restricted
                           Information (as defined below) confidential and
                           accordingly shall not disclose any Restricted
                           Information to any other person; and

                  (b)      not use any Restricted Information for any purpose
                           other than the performance of its obligations under
                           this Agreement or any other agreement for the sale of
                           the Products.

         6.2      "Restricted Information" means any information:

                  (a)      which is disclosed to DesalCo by Calder or DWEER-Tech
                           pursuant to or in connection with this Agreement or
                           the Original Distributorship Agreement or any other
                           agreement for the sale of the Products; (whether
                           orally or in writing); or

                  (b)      which relates to the Products and which comes into
                           the knowledge, possession or control of DesalCo
                           pursuant to this Agreement or the Original
                           Distributorship Agreement or any other agreement for
                           the sale of the Products;


                  regardless of whether or not such information is expressly
                  stated to be confidential or marked as such.

         6.3      Notwithstanding clauses 6.1 and 6.2 above, any Restricted
                  Information may be disclosed by DesalCo to:



                                       11
<PAGE>

                  (a)      any customers or prospective customers;

                  (b)      any governmental or other authority or regulatory
                           body;

                  (c)      any employees or Affiliates of DesalCo;


                  to the extent only as is required for the purposes
                  contemplated by this Agreement, or as is required by law and
                  subject in each case to DesalCo using its best endeavours to
                  ensure that the person in question keeps the same confidential
                  and does not use the same except for the purposes for which
                  the disclosure is made.

         6.4      Any Restricted Information may be used by DesalCo or its
                  Affiliates for any purpose, or disclosed by DesalCo to any
                  other person, to the extent only that it is, at the date
                  hereof, or hereafter, is or becomes public knowledge through
                  no fault of DesalCo or its Affiliates (provided that in doing
                  so DesalCo and its Affiliates shall not disclose any
                  Restricted Information which is not public knowledge).

         6.5      Any press releases, learned papers or similar publications
                  made by Calder that make reference to DesalCo or its
                  Affiliates or plants owned or operated by DesalCo or its
                  Affiliates shall be approved in advance by DesalCo provided
                  that such approval shall not be unreasonably withheld and
                  shall be given in a sufficiently timely manner.

7.       REPRESENTATIONS, WARRANTIES AND LIABILITY

         7.1      Subject as herein provided Calder warrants to DesalCo that:

                  (a)      all the Products supplied hereunder shall be of
                           satisfactory quality and shall comply with any legal
                           or other specification, agreed for them;

                  (b)      it is not aware of any rights of any third party in
                           the Territory which would or might render the sale of
                           the Products, or the use of any of the Trade Marks on
                           or in relation to the Products, unlawful.

         7.2      In the event of any breach of Calder's warranty in clause 7.1
                  above (whether by reason of defective materials, production
                  faults or otherwise) Calder's liability shall be limited to:

                  (a)      replacement of the Products in question; or




                                       12
<PAGE>

                  (b)      at Calder's option, repayment of the purchase price
                           therefor (where this has been paid).

         7.3      Notwithstanding anything to the contrary in this Agreement,
                  DWEER-Tech and/or Calder shall not be liable to DesalCo by
                  reason of any representation or implied warranty, condition or
                  other term or any duty at common law, or under the express
                  terms of this Agreement, for any consequential loss or damage
                  (whether for loss of profit or otherwise and whether
                  occasioned by the negligence of DWEER-Tech and/or Calder or
                  its employees or agents or otherwise) arising out of or in
                  connection with any act or omission of DWEER-Tech and/or
                  Calder relating to the manufacture or supply of the Products,
                  their resale by DesalCo or their use by any customer.

         7.4      Each party hereto represents and warrants to the other that:

                  (a)      It is a validly existing company in good standing
                           under the laws of its jurisdiction of incorporation
                           and is duly qualified as necessary to carry on its
                           business in the jurisdictions in which such business
                           is carried on; and

                  (b)      this Agreement has been duly authorised, executed and
                           delivered by it and is a valid and legally binding
                           obligation of it enforceable in accordance with its
                           terms.

8.       FORCE MAJEURE

         8.1      If either party's performance of this Agreement is affected by
                  Force Majeure (as defined below) it shall forthwith notify the
                  other party of the nature and extent thereof.

         8.2      Neither party shall be held to be in breach of this Agreement,
                  or otherwise be liable to the other, by reason of any delay in
                  its performance, or non performance, of any of its obligations
                  under this Agreement to the extent that such delay or non
                  performance is due to Force Majeure of which it is notified to
                  the other party, and the time for performance of such
                  obligations shall be extended accordingly.

         8.3      If the Force Majeure in question prevails for a continuous
                  period in excess of 180 days, the parties shall enter into
                  bona fide negotiations with a view to alleviating its effects,
                  or to agreeing such alternative arrangements as may be fair
                  and



                                       13
<PAGE>

                  reasonable, and if no agreement is reached between the parties
                  with respect thereto within 30 days, then either party may
                  upon giving written notice to the other, terminate this
                  Agreement without prejudice to any rights, remedies or
                  obligations which have accrued prior to termination.

         8.4      "Force Majeure" means, in relation to either party, any
                  circumstances beyond the reasonable control of that party
                  (including, without limitation, acts of god, war, strike, lock
                  out, go slow, work to rule or other form of industrial action,
                  fire, flood, civil disturbance, or government intervention or
                  government failure to act).

9.       DURATION AND TERMINATION

         9.1      This Agreement shall come into force on the date of this
                  Agreement and, subject as provided in clauses 9.2, 9.3, 9.4
                  and 9.5 below, shall continue in force until 31st October,
                  2009 whereupon it shall terminate unless previously renewed or
                  extended by the mutual written agreement of the parties
                  hereto.

         9.2      Calder shall be entitled to terminate this Agreement if:

                  (a)      DesalCo fails to diligently promote the sale of and
                           the use of the Products throughout the Territory
                           provided that DesalCo does not have to offer to sell
                           or sell the Products to competitors that are bidding
                           in connection with the construction or expansion of
                           desalination projects in the Territory in connection
                           with which DesalCo or any of its Affiliates is also
                           bidding (but DesalCo may do so at its sole and
                           absolute discretion); or

                  (b)      DesalCo at any time challenges the validity of all of
                           any of the DWEER Intellectual Property;


                  provided that DesalCo fails to remedy the same within 30 days
                  after receipt of written notice giving full particulars of the
                  breach and requiring it to be remedied.

         9.3      DesalCo may, at any time, terminate this Agreement upon one
                  (1) month's prior written notice to Calder.

         9.4      This Agreement shall automatically terminate upon termination
                  of the Technology Licence.



                                       14
<PAGE>

         9.5      Either party shall be entitled forthwith to terminate this
                  Agreement by written notice to the other (provided that such
                  termination shall not affect any orders accepted by and
                  binding on Calder as provided in clause 3.4 above) if:

                  (a)      that other party commits any material breach of any
                           of the provisions of this Agreement and, in the case
                           of a breach capable of remedy, fails to remedy the
                           same within 30 days after receipt of a written notice
                           giving full particulars of the breach and requiring
                           it to be remedied;

                  (b)      an encumbrancer takes possession or a receiver is
                           appointed over any of the property or assets of that
                           other party;

                  (c)      that other party makes any voluntary arrangement with
                           its creditors or goes into winding up or liquidation
                           (except for the purposes of amalgamation or
                           reconstruction and in such manner that the company
                           resulting therefrom effectively agrees to be bound by
                           or assume the obligations imposed on that other party
                           under this Agreement);

                  (d)      anything analogous to any of the foregoing under the
                           law of any jurisdiction occurs in relation to that
                           other party; or

                  (e)      that other party ceases, or threatens to cease, to
                           carry on business.

         9.6      For the purposes of clause 9.5 above, a breach shall be
                  considered capable of remedy if the party in breach can comply
                  with the provision in question in all respects other than as
                  to the time of performance (provided that time of performance
                  is not of the essence).

         9.7      Any waiver by either party of a breach of any provision of
                  this Agreement shall not be considered as a waiver of any
                  subsequent breach of the same or any other provision thereof.

         9.8      The rights to terminate this Agreement given by this clause 9
                  shall be without prejudice to any other right or remedy of
                  either party in respect of the breach concerned (if any) or
                  any other breach.

10.      CONSEQUENCE OF TERMINATION OR EXPIRATION


         Upon termination of this Agreement for any reason:




                                       15
<PAGE>

         10.1     the terms of this Agreement shall continue in full force for
                  so long as is required and to the extent and insofar as is
                  necessary to allow DesalCo to complete any binding contracts
                  for the sale of the Products in effect at the date of
                  termination and any bids, offers, quotations and/or proposals
                  made by DesalCo to other persons prior to termination of this
                  Agreement which have been accepted before termination of this
                  Agreement or are capable of being accepted after termination
                  of this Agreement provided that, for the avoidance of doubt
                  and notwithstanding the foregoing, the provisions of clauses
                  2.1, 2.2 and 2.6 above shall cease to apply forthwith upon
                  termination of this Agreement;

         10.2     DesalCo shall cease to promote, market or advertise the
                  Products or to make any use of the Trade Marks other than for
                  the purpose of selling existing stock consisting of the
                  Products and for such purpose only and to such extent the
                  provisions of this Agreement shall continue in full force and
                  effect;

         10.3     the provisions of clause 6, and any other clauses which are
                  intended to survive the termination of this Agreement, shall
                  continue in force in accordance with their respective terms
                  notwithstanding termination of this Agreement;

         10.4     DesalCo shall have no claim against Calder for compensation
                  for loss of distribution rights, loss of goodwill or any
                  similar loss;

         10.5     subject to as otherwise provided herein and to any rights,
                  remedies or obligations which have accrued prior to
                  termination, neither party shall have any further obligation
                  to the other under this Agreement.

11.      MISCELLANEOUS PROVISIONS

         11.1     Calder shall be entitled to perform any of the obligations
                  undertaken by it and to exercise any of the rights granted to
                  it under this Agreement through any Affiliate and any act or
                  omission of any such Affiliate shall for the purposes of this
                  Agreement be deemed to be the act or omission of Calder.

         11.2     DesalCo may assign this Agreement to any Affiliate, but
                  otherwise DesalCo may not without the prior written consent of
                  Calder assign, mortgage, charge (otherwise than by floating
                  charge) or dispose of any of its rights hereunder, or
                  subcontract or otherwise delegate any of its obligations
                  hereunder.



                                       16
<PAGE>

         11.3     Nothing in this Agreement shall create or be deemed to create
                  a partnership or relationship of principal and agent or
                  employer and employee between the parties.

         11.4     This Agreement contains the entire agreement between the
                  parties with respect to the subject matter hereof, supersedes
                  all previous agreements and understandings between the parties
                  with respect hereto, and may not be modified except by an
                  instrument in writing signed by the duly authorised
                  representatives of the parties.

         11.5     Each party acknowledges that in entering into this Agreement
                  it does not do so on the basis of, and does not rely on, any
                  representation, warranty or other provision except as
                  expressly provided herein, and all conditions, warranties, or
                  other terms implied by statute or common law are hereby
                  excluded to the fullest extent permitted by law.

         11.6     If any provision of this Agreement or any agreement entered
                  into pursuant hereto is or becomes illegal, invalid or
                  unenforceable in any jurisdiction, that shall not affect:-


                  (a)      the validity or enforceability in that jurisdiction
                           of any other provision of this Agreement or such
                           other agreement; or


                  (b)      the validity or enforceability in other jurisdictions
                           of that or any other provision of this Agreement or
                           such other agreement.

12.      JURISDICTION


         This Agreement shall be governed by and construed in all respects in
         accordance with the laws of the Cayman Islands and each party hereby
         submits to the non-exclusive jurisdiction of the Cayman Islands Courts.

13.      NOTICES


         All notices or other communications required or permitted to be given
         hereunder shall be in writing and shall be served by delivering the
         same by hand or by sending the same by facsimile or reputable courier
         service and shall be deemed given, if sent by hand, when delivered, if
         sent by facsimile, upon the date stated in the transmission report or,
         if sent by courier service, on delivery by the relevant courier
         service, in each case, to the address set out below or such other
         address as is notified by the relevant person from time to time,
         provided that a notice given in accordance with the above but received
         on a non-working




                                       17
<PAGE>

         day or after business hours in the place of receipt shall only be
         deemed to be given on the next working day in that place:

         13.1     if to Calder:

                  Binzenholzstrasse 447, Industrie Nord
                  CH-5704 Egliswil
                  Switzerland
                  Attention:  President
                  Facsimile No:+(41) 62 769 60 70

         13.2     if to DesalCo:

                  Trafalgar Place
                  1428A West Bay Road
                  Grand Cayman, Cayman Islands
                  Attention:  President
                  Facsimile No:+1 (345) 949-2957





                                       18
<PAGE>

AS WITNESS whereof the parties have hereto set their hands the day and year
first before written.


SIGNED FOR AND ON BEHALF OF          )
DESALCO LIMITED by                   )
Frederick W. McTaggart, Director     )      /s/ Frederick McTaggart
in the presence of:                  )      ------------------------------------
                                            Frederick W. McTaggart,  Director
/s/ William Andrews
- ------------------------------------
Witness

Witness name: William Andrews

Address: Bermuda

Occupation: Managing Director


SIGNED FOR AND ON BEHALF OF          )
CALDER AG by                         )
Ernst Kundig, Director and President )      /s/ Ernst Kundig
in the presence of:                  )      ------------------------------------
                                            Ernst Kundig, Director and President
/s/ William Andrews
- ------------------------------------
Witness

Witness name: William Andrews

Address: Bermuda

Occupation: Managing Director





                                       19

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>13
<FILENAME>g88198exv10w45.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ ABEL CASTILLO
<TEXT>
<PAGE>
                                                                   Exhibit 10.45


May 26, 2003


Abel Castillo


Dear Abel,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 400 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 2,000 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,


/s/ Frederick McTaggart

Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.46
<SEQUENCE>14
<FILENAME>g88198exv10w46.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ BILLY BANKER
<TEXT>
<PAGE>
                                                                   Exhibit 10.46


May 26, 2003


Billy Banker


Dear Billy,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 315 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 1,575 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,


/s/ Frederick McTaggart

Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.47
<SEQUENCE>15
<FILENAME>g88198exv10w47.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ CHET RITCH
<TEXT>
<PAGE>
                                                                   Exhibit 10.47

May 26, 2003


Chet Ritch


Dear Chet,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 194 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 970 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.48
<SEQUENCE>16
<FILENAME>g88198exv10w48.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ DAVID HOOKER
<TEXT>
<PAGE>
                                                                   Exhibit 10.48


May 26, 2003


Dave Hooker


Dear David,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 146 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 730 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.49
<SEQUENCE>17
<FILENAME>g88198exv10w49.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION LETTER/ ELIZABETH TRIANA
<TEXT>
<PAGE>
                                                                   Exhibit 10.49


May 26, 2003


Elizabeth Triana


Dear Elizabeth,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 197 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 985 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.50
<SEQUENCE>18
<FILENAME>g88198exv10w50.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION LETTER/ HELVERT RODRIGUEZ
<TEXT>
<PAGE>
                                                                   Exhibit 10.50


May 26, 2003


Helverth Rodriguez


Dear Helverth,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 243 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 1,215 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.51
<SEQUENCE>19
<FILENAME>g88198exv10w51.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ IVAN TABORA
<TEXT>
<PAGE>
                                                                   Exhibit 10.51


May 26, 2003


Ivan Tabora


Dear Ivan,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 185 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 925 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.52
<SEQUENCE>20
<FILENAME>g88198exv10w52.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ LUIS WOOD
<TEXT>
<PAGE>
                                                                   Exhibit 10.52


May 26, 2003


Luis Wood


Dear Luis,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 146 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 730 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,



/s/ Frederick McTaggart
Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.53
<SEQUENCE>21
<FILENAME>g88198exv10w53.txt
<DESCRIPTION>EMPLOYEE SHARE OPTION NOTICE LETTER/ MAGGIE JULIER
<TEXT>
<PAGE>
                                                                   Exhibit 10.53


May 26, 2003


Maggie Julier


Dear Maggie,

RE:      EMPLOYEE SHARE INCENTIVE PLAN AND EMPLOYEE SHARE OPTION PLAN

In accordance with the Employee Share Incentive Plan ("the Preference Share
Plan"), you are hereby advised that the Grant Date is June 4, 2003 for benefits
you have accrued during the year ended 31 December 2002.

Accordingly you are granted 279 Preference Shares in the Company. You have the
option to purchase an equal number of Preference Shares at a price of CI$7.46
each, which has been calculated in accordance to the terms of the Preference
Share Plan. If you intend to exercise this option, then payment must be received
in full no later than the close of business on July 4, 2003.

As a member of the Employee Share Option Plan ("the Option Plan"), you will also
be granted, as of June 30, 2003, the option to purchase 1,395 Ordinary Shares in
the Company. These options are exercisable in accordance to the terms of the
Option Plan. You furthermore have the opportunity to obtain an equal amount of
options to purchase Ordinary Shares of the Company, in accordance to the terms
of the Option Plan, if you exercise your right to purchase the above additional
Preference Shares before June 30, 2003.

Your continued dedication and hard work have contributed to another successful
year for Consolidated Water, and I look forward to a very bright future.

Yours sincerely,


/s/ Frederick McTaggart

Frederick W. McTaggart
President and COO



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14
<SEQUENCE>22
<FILENAME>g88198exv14.txt
<DESCRIPTION>CODE OF BUSINESS CONDUCT & ETHICS
<TEXT>
<PAGE>
                                                                      Exhibit 14


                           CONSOLIDATED WATER CO. LTD.

                       CODE OF BUSINESS CONDUCT AND ETHICS

                        ADOPTED BY THE BOARD OF DIRECTORS
                              ON FEBRUARY 10, 2004


         This Code of Business Conduct and Ethics covers a wide range of
business practices and procedures. It does not cover every issue that may arise,
but it sets out basic principles to guide all directors, officers, and employees
(collectively, "affiliates") of Consolidated Water Co. Ltd. (the "Company"). All
of our affiliates must conduct themselves accordingly and seek to avoid even the
appearance of improper behavior. The Code will also be provided to and followed
by the Company's agents and representatives, including consultants.

         If a law conflicts with a policy in this Code, you must comply with the
law. If you have any questions about these conflicts, you should ask the
Company's Ethics Officer, whose contact information is attached to this Code.

         Each affiliate must sign the attached acknowledgement of receipt of
this Code and confirm that the affiliate has carefully read and understands this
Code.

         Those who violate the standards in this Code will be subject to
disciplinary action, up to and including termination of employment and may be
subject to legal action and/or prosecution. IF YOU ARE AWARE OF OR IN A
SITUATION WHICH YOU BELIEVE MAY VIOLATE OR LEAD TO A VIOLATION OF THIS CODE,
FOLLOW THE GUIDELINES DESCRIBED IN SECTION 14 OF THIS CODE.

         In the event this Code is modified, then every affiliate will be
provided with a copy of the modified Code and will be deemed to have accepted
and will abide by the modified Code.

1.       COMPLIANCE WITH LAWS, RULES AND REGULATIONS

         Obeying the law, both in letter and in spirit, is the foundation on
which this Company's ethical standards are built. All affiliates must respect
and obey the laws of the countries in which we operate. Although not all
affiliates are expected to know the details of these laws, it is important to
know enough to determine when to seek advice from supervisors, managers or other
appropriate personnel.

         If requested, the Company will hold information and training sessions
to promote compliance with laws, rules and regulations, including
insider-trading laws.




<PAGE>

2.       DUTY TO PROMOTE THE COMPANY'S INTERESTS AND TO AVOID CONFLICTS OF
         INTEREST

         It is the responsibility of each affiliate to act in a manner which
promotes, and is consistent with, the Company's interests and welfare.

         It is also the responsibility of each affiliate to avoid "conflicts of
interest". A conflict of interest exists when a person's private interest
interferes in any way with the interests of the Company. A conflict situation
can arise when affiliates take actions or have interests that may make it
difficult to perform their Company work objectively and effectively. Such
situations may include any financial, romantic or nepotistic relationship with
another affiliate, supplier, competitor or anyone who represents, does work for,
or on behalf of, the Company, or any relationship that, by its nature, may
appear to interfere with the affiliate's ability to dispassionately and
objectively act in the best interests of the Company, its employees, customers
or shareholders. Conflicts of interest may also arise when affiliates or members
of their family, receive improper personal benefits as a result of their
position in the Company. Loans to, or guarantees of obligations of, affiliates
and their family members may create conflicts of interest and shall not be
permitted without the express prior approval of the Audit Committee.

         It is almost always a conflict of interest for a Company affiliate to
work simultaneously for a competitor, customer or supplier. You are not allowed
to work for a competitor, customer or supplier as an employee consultant or
board member. The best policy is to avoid any direct or indirect business
connection with our customers, suppliers or competitors, except on our behalf.
Conflicts of interest are prohibited as a matter of Company policy, except when
specifically approved by the Audit Committee. Conflicts of interest may not
always be clear-cut, so if you have a question, you should, in the first
instance, consult with the Company's Ethics Officer.

         The following are some general principles that should be kept in mind:

                  o        Avoid situations where your personal interests
                           conflict, or appear to conflict with, those of the
                           Company.

                  o        An affiliate may own up to 1% of the stock in a
                           competitor, customer or supplier without seeking
                           prior approval from the Audit Committee so long as
                           the stock is in a public company and the affiliate
                           does not have discretionary authority in dealing with
                           that company. If an affiliate wants to purchase more
                           than 1% of the stock in a customer, competitor or
                           supplier, or the company is nonpublic or the
                           affiliate has discretionary authority in dealing with
                           that company, then the stock may be purchased only
                           with prior approval of the Audit Committee.

                  o        If an affiliate has a financial interest in a
                           transaction between the Company and a third party -
                           even an indirect interest through, for example, a
                           family member - that interest must be approved by the
                           Audit Committee. However, if an affiliate has a
                           financial interest in a




                                      -2-
<PAGE>

                           supplier or customer only because someone in the
                           affiliate's family works there, then you do not need
                           to seek prior approval unless the affiliate deals
                           with the supplier or customer or your family member
                           deals with the Company.

                  o        For any transactions that would require reporting
                           under SEC rules, directors of the Company must obtain
                           written confirmation from the Audit Committee that
                           the proposed transaction is fair to the Company.

                  o        Loans from, or guarantees of obligations by, the
                           Company to directors or executive officers of the
                           Company are prohibited. Loans from the Company to
                           other officers and employees must be approved in
                           advance by the Audit Committee.

         Please keep in mind, that this Code does not specifically address every
potential conflict, so use your conscience and common sense. When questions
arise, seek guidance from the Ethics Officer.

         Any affiliate who becomes aware of a conflict or potential conflict
should bring it to the attention of the Ethics Officer. Consult the procedures
described in Section 14 of this Code.

3.       INSIDER TRADING

         It is the Company's goal and policy to protect shareholder investments
through strict enforcement of the prohibition against insider trading set forth
in the United States securities laws and regulations. Affiliates who are aware
of material non-public information about the Company are not permitted to use or
share that information for stock trading purposes or for any other purpose
except the conduct of our business. All non-public information about the Company
should be considered confidential information. To use material non-public
information for personal financial benefit or to "tip" others who might make an
investment decision on the basis of this information is both unethical and
illegal and will be dealt with firmly by the Company and may be subject to
criminal prosecution.

         Material information has been defined differently by different courts,
but one of the most commonly referenced definitions is from a U.S. Supreme Court
case which suggested that information is material if "there is a substantial
likelihood that a reasonable shareholder would consider it important" in making
an investment decision. Importantly, this definition does not require an
investor to show actual reliance on the information in connection with a trade,
but only to consider it important. This standard has been articulated elsewhere
as a requirement that, for information to be material, there must be a
substantial likelihood that a fact "would have been viewed by a reasonable
investor as having significantly altered the `total mix' of information made
available." Of course, information will also be considered material if its
disclosure would be expected to alter significantly the market price of the
Company's stock. Obviously, it is




                                      -3-
<PAGE>

very difficult to determine materiality, and the facts in each case must be
carefully weighed. Furthermore, it should be remembered that plaintiffs who
challenge and judges who rule on particular transactions or activities have the
benefit of hindsight. Accordingly, if you have any questions, in the first
instance, please consult the Ethics Officer.

         Examples of information that may be considered confidential information
in some circumstances are:

                  o        Undisclosed annual, quarterly or monthly financial
                           results, a change in earnings or earnings
                           projections, or unexpected or unusual gains or losses
                           in major operations;

                  o        Undisclosed negotiations and agreements regarding
                           mergers, concessions, joint ventures, acquisitions,
                           divestitures, business combinations or tender offers;

                  o        An undisclosed increase or decrease in dividends on
                           the Company's ordinary shares;

                  o        Undisclosed major management changes;

                  o        A substantial contract award or termination that has
                           not been publicly disclosed;

                  o        A major lawsuit or claim that has not been publicly
                           disclosed;

                  o        The gain or loss of a significant customer or
                           supplier that has not been publicly disclosed;

                  o        An undisclosed filing of a bankruptcy petition by the
                           Company or a significant subsidiary;

                  o        Information that is considered confidential; and

                  o        Any other undisclosed information that could affect
                           the Company's stock price.

4.       CORPORATE OPPORTUNITIES

         Affiliates are prohibited from taking for themselves personally,
opportunities that are discovered through the use of corporate property,
information or position without the consent of the Audit Committee. No affiliate
may use corporate property, including but not limited to vehicles, tools,
supplies, vendor charge accounts, credit cards, parts, computers, telephones or
any other Company asset not specifically authorized by the Company for personal
use, information, or position for improper personal gain or benefit,



                                      -4-
<PAGE>

and no affiliate may compete with the Company directly or indirectly. Affiliates
owe a duty to the Company to advance its legitimate interests when the
opportunity to do so arises.

5.       COMPETITION AND FAIR DEALING

         We seek to outperform our competition fairly and honestly. Stealing
proprietary information, possessing trade secret information that was obtained
without the owner's consent, or inducing such disclosures by past or present
employees of other companies is prohibited. Each employee should endeavor to
respect the rights of and deal fairly with the Company's customers, suppliers,
competitors and employees. No employee should take unfair advantage of anyone
through manipulation, concealment, abuse of privileged information,
misrepresentation of material facts, or any other intentional unfair-dealing
practice.

         All affiliates shall ensure that they do not disclose to the Company
any proprietary information or trade secrets that they may have obtained in a
previous employment or relationship.

         The purpose of business entertainment and gifts in a commercial setting
is to create good will and sound working relationships, not to gain unfair
advantage with customers. No gift or entertainment should ever be offered,
given, provided or accepted by any affiliate, family member of an affiliate or
agent unless it: (1) is not a cash gift, (2) is consistent with customary
business practices, (3) is not excessive in value, (4) cannot be construed as a
bribe or payoff and (5) does not violate any laws or regulations or could, in
any way, influence the affiliate's ability to interact with the giver or
recipient in a dispassionate, objective way. Please discuss with the Ethics
Officer any gifts or proposed gifts which you are not certain are appropriate.

6.       DISCRIMINATION AND HARASSMENT

         The diversity of the Company's employees is a tremendous asset. We are
firmly committed to providing equal opportunity in all aspects of employment and
will not tolerate any illegal discrimination or harassment of any kind. Examples
include derogatory comments based on racial or ethnic characteristics and
unwelcome sexual advances. Any instances of such behavior, whether the affiliate
is a participant or observer, should be immediately reported to the Ethics
Officer.

7.       HEALTH AND SAFETY

         The Company strives to provide each affiliate with a safe and healthy
work environment. Each affiliate has responsibility for maintaining a safe and
healthy workplace for all affiliates by following safety and health rules and
practices and reporting accidents, injuries and unsafe equipment, practices or
conditions.

         Violence and threatening behavior are not permitted. Affiliates should
report to




                                      -5-
<PAGE>

work in condition to perform their duties, free from the influence of illegal
drugs or alcohol. The use of illegal drugs or alcohol in the workplace will not
be tolerated and may result in disciplinary action up to and including
termination.

8.       ACCOUNTING POLICIES/RECORD-KEEPING

         The Company and each of its subsidiaries will make and keep books,
records and accounts, which in reasonable detail accurately and fairly present
the transactions and disposition of the assets of the Company. All of the
Company's books, records, accounts and financial statements must appropriately
reflect the Company's transactions and must conform both to applicable legal
requirements and to the Company's system of internal controls. Unrecorded or
"off the books" funds, assets or liabilities shall not be maintained.

         All affiliates and other persons are prohibited from directly or
indirectly falsifying or causing to be false or misleading any financial or
accounting book, record or account. Affiliates are expressly prohibited from
directly or indirectly manipulating an audit, and from destroying or tampering
with any record, document or tangible object with the intent to obstruct a
pending or contemplated audit, review or investigation. The commission of, or
participation in, one of these prohibited activities or other illegal conduct
will subject affiliates to criminal penalties, as well as punishment of up to
and including termination of employment.

         No affiliate of the Company may directly or indirectly:

                  o        make or cause to be made a materially false or
                           misleading statement, or

                  o        omit to state, or cause another person to omit to
                           state, any material fact necessary to make statements
                           made not misleading

in connection with the audit of financial statements by independent accountants,
the preparation of any required reports whether by independent or internal
accountants, or any other work which involves or relates to the filing of a
document with the U.S. Securities and Exchange Commission.

         Many affiliates regularly use business expense accounts, which must be
documented and recorded accurately. If you are not sure whether a certain
expense is legitimate, ask the Ethics Officer.

         Business records and communications often become public, and we should
avoid exaggeration, derogatory remarks, guesswork, or inappropriate
characterizations of people and companies that can be misunderstood. This
applies equally to e-mail, internal memos, and formal reports.

         Records should always be retained or destroyed according to the
Company's record retention policies. In accordance with those policies, in the
event of litigation or governmental investigation please consult the Ethics
Officer.



                                      -6-
<PAGE>

9.       CONFIDENTIALITY

         Affiliates must maintain the confidentiality of confidential
information entrusted to them by the Company, except when disclosure is
authorized by the Audit Committee or required by laws or regulations.
Confidential information includes all non-public information that might be of
use to competitors, or harmful to the Company or its customers, if disclosed. It
also includes information that suppliers and customers have entrusted to us. The
obligation to preserve confidential information continues even after employment
or other relationship with the Company ends.

10.      PROTECTION AND PROPER USE OF COMPANY ASSETS

         All affiliates should endeavor to protect the Company's assets and
ensure their efficient use. Theft, fraud, and waste have a direct impact on the
Company's profitability. Any suspected incident of theft, fraud or waste should
be immediately reported to the Audit Committee for investigation. Company
equipment should not be used for non-Company business, though incidental
personal use may be permitted.

         The obligation of affiliates to protect the Company's assets includes
its proprietary information. Proprietary information includes intellectual
property such as trade secrets, patents, trademarks, and copyrights, as well as
business, marketing and service plans, engineering and manufacturing ideas,
designs, databases, records, salary information and any unpublished financial
data and reports. Unauthorized use or distribution of this information is a
violation of Company policy and could be illegal and result in civil or even
criminal penalties.

11.      PAYMENTS TO GOVERNMENT PERSONNEL

         As we are a publicly-held company in the United States, and as such
under the laws of the United States, we are subject the provisions of the U.S.
Foreign Corrupt Practices Act. The U.S. Foreign Corrupt Practices Act prohibits
giving anything of value, directly or indirectly, to officials of governments or
political candidates in order to obtain or retain business. It is strictly
prohibited to make illegal payments to government officials of any country.

12.      WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

         Any waiver of this Code may be made only by the Board of Directors or
the Audit Committee of the Board of Directors and will be promptly disclosed as
required by law or stock exchange regulation.

13.      REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

         Affiliates are encouraged to communicate, anonymously if desired, with
the



                                      -7-
<PAGE>

Ethics Officer about perceived illegal or unethical behavior and when in
doubt about the best course of action in a particular situation. It is the
policy of the Company not to allow retaliation for reports of misconduct by
others made in good faith by affiliates. The most important point is that
possible violations should be reported and we support all means of reporting
them. Affiliates are expected to cooperate in internal investigations of
misconduct.



14.      COMPLIANCE PROCEDURES

         We must all work to ensure prompt and consistent action against
violations of this Code. However, in some situations it is difficult to know if
a violation has occurred. Since we cannot anticipate every situation that will
arise, it is important that we have a way to approach a new question or problem.
These are the steps to keep in mind:

         o        MAKE SURE YOU HAVE AS MANY FACTS AS POSSIBLE BUT DO NOT DELAY
                  YOUR ACTION IN COLLECTING FACTS. In order to reach the right
                  solutions, we must be as fully informed as possible.

         o        ASK YOURSELF WHAT SPECIFICALLY AM I BEING ASKED TO DO? DOES IT
                  SEEM UNETHICAL OR IMPROPER? This will enable you to focus on
                  the specific question you are faced with, and the alternatives
                  you have. Use your judgment and common sense; if something
                  seems unethical or improper, it probably is.

         o        CLARIFY YOUR RESPONSIBILITY AND ROLE. In most situations,
                  there is shared responsibility. Are your colleagues informed?
                  It may help to get others involved and discuss the problem.

         o        DISCUSS THE PROBLEM WITH THE ETHICS OFFICER. This is the basic
                  guidance for all situations, except as otherwise specified in
                  this Code. In many cases, the Ethics Officer will be more
                  knowledgeable about the question, and will appreciate being
                  brought into the decision-making process. Remember that it is
                  the Ethics Officer's responsibility to help solve problems.

         o        SEEK HELP FROM COMPANY RESOURCES. In the rare case where it
                  may not be appropriate to discuss an issue with the Ethics
                  Officer, or where you do not feel comfortable approaching the
                  Ethics Officer with your question, discuss it with the
                  Chairman of the Audit Committee of the Board of Directors
                  whose contact information is attached to this Code.

         o        YOU MAY REPORT ETHICAL VIOLATIONS IN CONFIDENCE AND WITHOUT
                  FEAR OF RETALIATION. If your situation requires that your
                  identity be kept secret, your anonymity will be protected.
                  TELEPHONE, FAX OR WRITE TO THE ETHICS OFFICER WHOSE CONTACT
                  INFORMATION IS ATTACHED TO THIS CODE The Company does not
                  permit retaliation of any kind against affiliates for good
                  faith reports of ethical violations.



                                      -8-
<PAGE>

         o        ALWAYS ASK FIRST, ACT LATER: If you are unsure of what to do
                  in any situation, seek guidance from the Ethics Officer BEFORE
                  YOU ACT.






                                      -9-
<PAGE>
                                    APPENDIX

              CODE OF ETHICS FOR CEO AND SENIOR FINANCIAL OFFICERS

         The Company has a Code of Business Conduct and Ethics applicable to all
affiliates of the Company. The CEO and all senior financial officers, including
the CFO and principal accounting officers, are bound by the provisions set forth
therein relating to ethical conduct, conflicts of interest and compliance with
law. In addition to the Code of Business Conduct and Ethics, the CEO and senior
financial officers are subject to the following additional specific policies:

l.       The CEO and all senior financial officers are responsible for full,
         fair, accurate, timely and understandable disclosure in the periodic
         reports required to be filed by the Company with the U.S. Securities
         and Exchange Commission. Accordingly, it is the responsibility of the
         CEO and each senior financial officer promptly to bring to the
         attention of the Chairman of the Audit Committee any material
         information of which he or she may become aware that affects the
         disclosures made by the Company in its public filings or otherwise
         assist the Audit Committee in fulfilling its responsibilities as
         specified in the Audit Committee's Charter.

2.       The CEO and each senior financial officer shall promptly bring to the
         attention of the Chairman of the Audit Committee any information he or
         she may have concerning (a) significant deficiencies in the design or
         operation of internal controls which could adversely affect the
         Company's ability to record, process, summarize and report financial
         data or (b) any theft or fraud, whether or not material, that involves
         affiliates who have a significant role in the Company's financial
         reporting, disclosures or internal controls.

3.       The CEO and each senior financial officer shall promptly bring to the
         attention of the chairman of the Audit Committee any information he or
         she may have concerning any violation of the Company's Code of Business
         Conduct and Ethics or of these additional policies, including any
         actual or apparent conflicts of interest between personal and
         professional relationships, involving any affiliate who has a
         significant role in the Company's financial reporting, disclosures or
         internal controls.

4.       The CEO and each senior financial officer shall promptly bring to the
         attention of the Chairman of the Audit Committee any information he or
         she may have concerning evidence of a material violation of the
         securities or other laws, rules or regulations applicable to the
         Company and the operation of its business, by the Company or any agent
         thereof.

5.       The Board of Directors shall determine, or designate appropriate
         persons to determine appropriate actions to be taken in the event of
         violations of the Code of




                                      -10-
<PAGE>

         Business Conduct and Ethics or of these additional procedures by the
         CEO and the Company's senior financial officers. Such actions shall be
         reasonably designed to deter wrongdoing and to promote accountability
         for adherence to the Code of Business Conduct and Ethics and to these
         additional policies, and shall include written notices to the
         individual involved that the Board has determined that there has been a
         violation, censure by the Board, demotion or re-assignment of the
         individual involved, suspension with or without pay or benefits (as
         determined by the Board) and termination of the individual's
         employment. In determining what action is appropriate in a particular
         case, the Board of Directors or such designee shall take into account
         all relevant information, including the nature and severity of the
         violation, whether the violation was a single occurrence or repeated
         occurrences, whether the violation appears to have been intentional or
         inadvertent, whether the individual in question had been advised prior
         to the violation as to the proper course of action and whether or not
         the individual in question had committed other violations in the past.




                                      -11-
<PAGE>

                               CONTACT INFORMATION


ETHICS OFFICER

Richard L. Finlay
c/o Conyers Dill & Pearman Cayman
Attorneys At Law
Century Yard, Cricket Square
P.O. BOX 2681GT
Grand Cayman
Telephone:     345 945 3901
Fax:           345 945 3902



CHAIRMAN OF AUDIT COMMITTEE

Brian E. Butler
P.O. Box 30864 SMB
Grand Cayman
Telephone:     345 945 4977
Fax:           345 945 5012







                                      -12-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>23
<FILENAME>g88198exv21.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>

                                                                      Exhibit 21

              CONSOLIDATED WATER CO. LTD. AND SUBSIDIARY COMPANIES

                         SUBSIDIARIES OF THE REGISTRANT

         The following list includes all of the Registrant's wholly-owned
subsidiaries as of December 31, 2003. All subsidiaries of the Registrant
appearing in the following table are included in the consolidated financial
statements of the Registrant.

<TABLE>
<CAPTION>
Name of Subsidiary                             Jurisdiction of Incorporation
- ------------------                             -----------------------------
<S>                                            <C>
Belize Water Limited                           Belize
Cayman Water Company Limited                   Cayman Islands
DesalCo Limited                                Cayman Islands
DesalCo (Barbados) Ltd.                        Barbados
Ocean Conversion (Cayman) Limited              Cayman Islands
Waterfields Company Limited                    Commonwealth of the Bahamas
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>24
<FILENAME>g88198exv23w1.txt
<DESCRIPTION>CONSENT OF KPMG (CAYMAN ISLANDS)
<TEXT>
<PAGE>

                                                                    Exhibit 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

         We consent to the incorporation by reference in the Registration
Statement on Form S-8 (Registration No. 333-10206) and the Registration
Statement on Form F-3 (Registration No. 333-104902) of Consolidated Water Co.
Ltd. of our report dated April 7, 2004 relating to the financial statements
which appear in this Form 10-K.

/s/ KPMG Chartered Accountants

Cayman Islands
April 14, 2004


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>25
<FILENAME>g88198exv23w2.txt
<DESCRIPTION>CONSENT OF KPMG (BRITISH VIRGIN ISLANDS)
<TEXT>
<PAGE>

                                                                    Exhibit 23.2

                       CONSENT OF INDEPENDENT ACCOUNTANTS

         We consent to the incorporation by reference in the Registration
Statement on Form S-8 (Registration No. 333-10206) and the Registration
Statement on Form F-3 (Registration No. 333-104902) of Consolidated Water Co.
Ltd. of our report dated March 12, 2004 relating to the financial statements
which appear in this Form 10-K.

/s/ KPMG Chartered Accountants

British Virgin Islands
April 14, 2004


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>26
<FILENAME>g88198exv31w1.txt
<DESCRIPTION>CERTIFICATION BY THE CEO PURSUANT SECTION 302
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.1

               CERTIFICATION PURSUANT TO RULE 13A-14(a)/15D-14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         In connection with the Annual Report of Consolidated Water Co. Ltd.
(the "Company") on Form 10-K for the year ended December 31, 2003, as filed with
the Securities and Exchange Commission on the date hereof, I, Frederick W.
McTaggart, the Chief Executive Officer of the Company, certify, pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, that:

         1.       I have reviewed the Annual Report on Form 10-K of the Company
for the year ended December 31, 2003;

         2.       Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

         3.       Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

         4.       The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:

                  (a) designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

                  (c) disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

         5.       The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

                  (a) all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and

                  (b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal control over financial reporting.

Date: April 14, 2004

                                              By: /s/ Frederick W. McTaggart
                                                  -----------------------------
                                              Name: Frederick W. McTaggart
                                              Title: Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>27
<FILENAME>g88198exv31w2.txt
<DESCRIPTION>CERTIFICATION BY THE CFO PURSUANT SECTION 302
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.2

               CERTIFICATION PURSUANT TO RULE 13A-14(a)/15D-14(a)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         In connection with the Annual Report of Consolidated Water Co. Ltd.
(the "Company") on Form 10-K for the year ended December 31, 2003, as filed with
the Securities and Exchange Commission on the date hereof, I, Brent Santha, the
Chief Financial Officer of the Company, certify, pursuant to Rule 13a-14(a) of
the Securities Exchange Act of 1934, that:

         1.       I have reviewed the Annual Report on Form 10-K of the Company
for the year ended December 31, 2003;

         2.       Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

         3.       Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;

         4.       The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:

                  (a) designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being
prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

                  (c) disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

         5.       The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):

                  (a) all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and

                  (b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal control over financial reporting.

Date: April 14, 2004

                                         By: /s/ Brent Santha
                                             -----------------------------------
                                         Name: Brent Santha
                                         Title: Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>28
<FILENAME>g88198exv32w1.txt
<DESCRIPTION>CERTIFICATION BY THE CEO PURSUANT SECTION 906
<TEXT>
<PAGE>

                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Consolidated Water Co. Ltd. (the
"Company") on Form 10-K for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Frederick W. McTaggart, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.

Date: April 14, 2004                    By: /s/ Frederick W. McTaggart
                                            ------------------------------------
                                                 Name: Frederick W. McTaggart
                                                 Title: Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>29
<FILENAME>g88198exv32w2.txt
<DESCRIPTION>CERTIFICATION BY THE CFO PURSUANT SECTION 906
<TEXT>
<PAGE>

                                                                    EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Consolidated Water Co. Ltd. (the
"Company") on Form 10-K for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Brent
Santha, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

         (1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.

Date: April 14, 2004                        By: /s/ Brent Santha
                                                --------------------------------
                                            Name: Brent Santha
                                            Title: Chief Financial Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>30
<FILENAME>g88198exv99w1.txt
<DESCRIPTION>COMPENSATION COMMITTEE CHARTER
<TEXT>
<PAGE>
                                                                    Exhibit 99.1

                         COMPENSATION COMMITTEE CHARTER
                                       OF
                          CONSOLIDATED WATER CO. LTD.



I.       COMPOSITION AND QUALIFICATIONS

         The Compensation Committee (the "Committee") of the Board of Directors
         (the "Board) of Consolidated Water Co. Ltd. (the "Company") shall be
         comprised of not less than three (3) members of the Board, each of whom
         is determined by the Board to be "independent" under the rules of the
         Nasdaq Stock Market, Inc. ("Nasdaq"). However, one (1) member of the
         Board may serve as a member of the Committee for a period of no longer
         than two (2) years who does not qualify as "independent" under Nasdaq
         Rule 4200 if the Board determines that such person's membership on the
         Committee is required in the best interest of the Company and its
         stockholders.

II.      APPOINTMENT AND REMOVAL

         The members of the Committee shall be appointed by the Board and shall
         serve until such member's successor is duly elected and qualified or
         until such member's earlier resignation or removal. A member of the
         Committee may be removed, with or without cause, by a majority vote of
         the Board.


III.     DUTIES

         The duties of the Committee are as follows:

         1.       Discharge the Board's responsibilities to the stockholders and
                  investment community relating to the compensation of the
                  Company's executive officers;

         2.       Review and approve corporate goals and objectives relevant to
                  the compensation of the Chief Executive Officer and other
                  executive officers;

         3.       Review and evaluate the performance of the Chief Executive
                  Officer and other executive officers and other key employees
                  of the Company in light of the goals and objectives of the
                  Company, and either as a committee or together with the other
                  independent directors (as directed by the Board) determine and
                  approve their annual compensation packages, including base
                  salaries, cash bonuses, stock options and other stock-based
                  incentives, based on these evaluation;



<PAGE>

         4.       Monitor the effectiveness of benefit plan offerings and
                  approve changes where appropriate;

         5.       Make an annual report on executive compensation in the
                  Company's annual proxy statement or annual report on Form 10-K
                  as required by the rules of the U.S. Securities and Exchange
                  Commission and other regulatory bodies;

         6.       Review and approve, or recommend to the full Board, its annual
                  retainer and compensation plans and equity-based plans in
                  which non-executive members of the Board are eligible to
                  participate;

         7.       Supervise and oversee the administration of the Company's
                  incentive compensation programs.

         8.       Review management proposals to;

                  A.       designate employees for incentive compensation
                           programs; and

                  B.       approve new benefit plans;

         9.       Report regularly to the Board;

                  A.       following meetings of the Committee;

                  B.       with respect to those matters that are relevant to
                           the Committee's discharge of its responsibilities;
                           and

                  C.       with respect to those recommendations that the
                           Committee may deem appropriate.

                  The report to the Board may take the form of an oral report by
                  the Chairman of the Committee or any other member of the
                  Committee designated by the Committee to make such report.

         10.      The Committee shall review and reassess periodically the
                  adequacy of this Charter and recommend to the Board any
                  improvements to this Charter that the Committee considers
                  necessary or valuable.


IV.      MEETINGS

         The Committee shall meet at such times as the Committee shall consider
         appropriate to fulfill its duties and responsibilities.




                                       2
<PAGE>

V.       ADVISORS

         The Committee shall have the exclusive authority, at the expense of the
Company, to retain and terminate:

         1.       executive compensation consultants, including the fees and
                  other terms of their engagements, to advise on the evaluation
                  and compensation of the members of the Board, the Chief
                  Executive Office and other executive officers of the Company;
                  and

         2.       such outside counsel and other advisors as it deems
                  appropriate in its sole discretion.













                                       3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>31
<FILENAME>g88198exv99w2.txt
<DESCRIPTION>AUDIT COMMITTEE CHARTER
<TEXT>
<PAGE>
                                                                    Exhibit 99.2

                           CONSOLIDATED WATER CO. LTD.
                             AUDIT COMMITTEE CHARTER
 PURPOSE

         The purpose of the Audit Committee of Consolidated Water Co. Ltd. (the
"Corporation") is to act on behalf of the board of directors and to oversee all
material aspects of the organization's financial reporting, control and audit
functions, including but not limited to, reviewing the financial information to
be provided to the Corporation's shareholders, reviewing the systems of internal
controls established by the Corporation's officers and board of directors and
selecting and evaluating the Corporation's independent accountants. The Audit
Committee does not itself prepare financial statements or perform audits, and
its members are not auditors or certifiers of the Corporation's financial
statements. Consistent with this purpose, the Audit Committee shall encourage
continuous improvement of, and foster adherence to, the Corporation's policies,
procedures and practices at all levels. The Audit Committee shall provide
assistance to the directors of the Corporation in fulfilling their
responsibility to the shareholders and investment community relating to
corporate accounting, reporting practices of the Corporation, and the quality
and integrity of the financial reports of the Corporation. In so doing, it is
the responsibility of the Audit Committee to maintain free and open means of
communication between the directors, the independent auditors, and the financial
management of the Corporation. In discharging its oversight role, the Audit
Committee is empowered to investigate any matter brought to its attention with
full access to all books, records, facilities and personnel of the Corporation.

MEMBERSHIP

         The Audit Committee shall be composed of not less than three (3)
directors of the Corporation, each of whom is "independent" as such term is
described in the rules of the Nasdaq Stock Market, Inc. ("Nasdaq") and the
Securities Exchange Act of 1934 (the "Act") and the rules and regulations
thereunder, as in effect from time to time. However, one (1) director may serve
as a member of the Audit Committee for a period of no longer than two (2) years
who does not qualify as "independent" under Nasdaq Rule 4200, if the
Corporation's board of directors determines that such person's membership on the
Audit Committee is required in the best interest of the Corporation and its
shareholders. Each member of the Audit Committee shall be able to read and
understand fundamental financial statements at the time of his or her
appointment. All Audit Committee members will be financially literate, and at
least one member shall qualify as an "audit committee financial expert," as such
term is defined in the Instructions to paragraph (h)(1) of Item 401 of
Regulation S-K, as in effect from time to time.

         The members of the Audit Committee shall be elected by the board of
directors of the Corporation following each annual general meeting of
shareholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation and removal. Unless the chairperson
of the Audit Committee is elected by the full board of directors of the
Corporation, the members of the Audit Committee may designate a chairperson by a
majority vote of the full Audit Committee membership. The Chairperson of the
Audit Committee shall be an "independent" director under the Nasdaq rules, as
well as the Act and the rules and regulations promulgated thereunder.


<PAGE>

MEETINGS

         The Audit Committee shall generally hold regular meetings at least
quarterly but more frequently if circumstances make that preferable. The
chairperson of the Audit Committee has the power to call an Audit Committee
meeting in person or by conference call whenever he or she thinks there is a
need. Audit Committee agendas shall be the responsibility of the chairperson,
with input from the other members of the Audit Committee. The Audit Committee
may designate subcommittees of one or more of its members to report to the full
Audit Committee. The majority of the members of the Audit Committee shall
constitute a quorum.

         Minutes of the meetings of the Audit Committee shall be prepared by the
chairperson or his or her designee and maintained at the Corporation. Draft
minutes shall be circulated to members for approval. Resolutions by the Audit
Committee may also be adopted by unanimous written consent of all members.

DUTIES AND RESPONSIBILITIES

         In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the Corporation are in
accordance with all requirements and are of the highest quality.

         In carrying out these responsibilities, the Audit Committee will:

         o        Obtain the full board of directors' approval of this Charter
                  and review and reassess this Charter as conditions dictate (at
                  least annually).

         o        Select the independent auditors to audit the financial
                  statements of the Corporation and its divisions and
                  subsidiaries. The Audit Committee will also review and set any
                  fees paid to the independent auditor and review and approve
                  dismissal of the independent auditor.

         o        Analyze and discuss with the independent auditors the fees
                  charged to the Corporation for services rendered by the
                  independent auditor.

         o        Conduct an annual evaluation of the independence of the
                  outside auditor, based in part on review and discussion of a
                  formal written statement delineating all relationships between
                  the auditor and the Corporation and any other relationships
                  that may adversely affect the independence of the auditor.

         o        Have a clear understanding with the independent auditors that
                  they are ultimately accountable to the board of directors and
                  the Audit Committee, as the shareholders' representatives, who
                  have the ultimate authority in deciding to engage, evaluate,
                  and if appropriate, terminate their services.

         o        Meet with the independent auditors and financial management of
                  the Corporation to




                                      -2-
<PAGE>

                  review the scope of the proposed audit for the current year
                  and timely review of the Corporation's quarterly reports, and
                  the audit procedures to be utilized, and at the conclusion
                  thereof review such audit or review, including any comments or
                  recommendations of the independent auditors.

         o        Review with the independent auditors and the Corporation's
                  financial and accounting personnel, the adequacy and
                  effectiveness of the accounting and financial controls of the
                  Corporation, and elicit any recommendations for the
                  improvement of such internal control procedures or particular
                  areas where new or more detailed controls or procedures are
                  desirable. Particular emphasis should be given to the adequacy
                  of such internal controls to expose any payments,
                  transactions, or procedures that might be deemed illegal or
                  otherwise improper. Further, the Audit Committee should
                  periodically review the Corporation's policy statements to
                  determine their adherence to the Corporation's code of
                  conduct.

         o        Provide sufficient opportunity for the independent auditors to
                  meet with the members of the Audit Committee without members
                  of management present. Among the items to be discussed in
                  these meetings are the independent auditors' evaluation of the
                  Corporation's financial, accounting, and auditing personnel,
                  and the cooperation that the independent auditors received
                  during the course of the audit.

         o        Establish policies and procedures for the engagement of
                  outside auditors to provide non-audit services, including
                  procedures for pre-approval of non-audit services permitted by
                  law to be performed by the independent auditor outside the
                  scope of the engagement letter, and consider whether the
                  independent auditor's performance of such services, together
                  with any other non-audit services being performed, is
                  compatible with the auditor's independence.

         o        Set clear hiring policies for employees or former employees of
                  the independent auditors that meet the requirements set forth
                  in Rule 2-01(c)(2)(ii) of Regulation S-X, as amended from time
                  to time, and all applicable stock exchange or NASDAQ listing
                  standards.

         o        Review any material pending legal proceedings involving the
                  Corporation and other contingent liabilities.

         o        Review accounting and financial human resources and succession
                  planning within the Corporation.

         o        Submit the minutes of all meetings of the Audit Committee to,
                  or discuss the matters discussed at each Audit Committee
                  meeting with, the board of directors.

         o        Investigate any matters brought to its attention within the
                  scope of its duties, with the power to retain outside counsel
                  and other experts for this purpose if, in its judgment, that
                  is appropriate.



                                      -3-
<PAGE>

         o        Review management's assertion on its assessment of the
                  effectiveness of internal controls as of the end of the most
                  recent fiscal year and the independent auditors' report on
                  management's assertion.

         o        Establish policies and procedures to receive and process: (1)
                  complaints received by the Corporation concerning accounting,
                  internal accounting controls or auditing matters, and (2) the
                  confidential anonymous submissions by employees of the
                  Corporation of concerns regarding questionable accounting or
                  auditing matters.

         o        Review the quarterly financial statements with financial
                  management and the independent auditors prior to the filing of
                  the Form 10-Q (or prior to the press release of results, if
                  possible) to determine that the independent auditors do not
                  take exception to the disclosure and content of the financial
                  statements, and discuss any other matters required to be
                  communicated to the committee by the auditors. The chair of
                  the committee may represent the entire committee for purposes
                  of this review.

         o        Review the financial statements contained in the annual report
                  to shareholders with management and the independent auditors
                  to determine that the independent auditors are satisfied with
                  the disclosure and content of the financial statements to be
                  presented to the shareholders. Review with financial
                  management and the independent auditors the results of their
                  timely analysis of significant financial reporting issues and
                  practices, including changes in, or adoptions of, accounting
                  principals and disclosure practices, and discuss any other
                  matters required to be communicated to the committee by the
                  auditors. Also review with financial management and the
                  independent auditors their judgments about the quality, not
                  just acceptability, of accounting principles and the clarity
                  of the financial disclosure practices used or proposed to be
                  used, and particularly, the degree of aggressiveness or
                  conservatism of the organization's accounting principles and
                  underlying estimates, and other significant decisions made in
                  preparing the financial statements.

         o        Review and discuss with management and the independent auditor
                  any material financial or other arrangements of the
                  Corporation which do not appear on the financial statements of
                  the Corporation.

         o        Establish policies and procedures providing for Audit
                  Committee review and approval of all "related party
                  transactions" for potential conflicts of interest. For
                  purposes of this provision, "related party transactions" refer
                  to transactions required to be disclosed pursuant to Item 404
                  of Regulation S-K promulgated under the Securities Exchange
                  Act of 1934.

         o        Review and discuss with management and the independent
                  auditors any accounting policies and estimates which may be
                  viewed as critical to the Corporation and any significant
                  changes in the accounting policies of the Corporation and
                  accounting and financial proposals that may have a significant
                  impact on the Corporation's financial reports.



                                      -4-
<PAGE>

         o        On an annual basis, obtain from the independent auditors a
                  written communication delineating all their relationships and
                  professional services as required by Independence Standards
                  Board Standard No. 1, Independence Discussions with Audit
                  Committees. In addition, review with the independent auditors
                  the nature and scope of any disclosed relationships or
                  professional services and take, or recommend that the board of
                  directors take, appropriate action to ensure the continuing
                  independence of the auditors.

         o        Review the report of the Audit Committee in the annual report
                  to shareholders and the Annual Report on Form 10-K disclosing
                  whether or not the committee had reviewed and discussed with
                  management and the independent auditors, as well as discussed
                  within the Audit Committee (without management or the
                  Independent auditors present), the financial statements and
                  the quality of accounting principles and significant judgments
                  affecting the financial statements. In addition, disclose the
                  Audit Committee's conclusion on the fairness of presentation
                  of the financial statements in conformity with GAAP based on
                  those discussions.

         o        Review the Company's disclosure in the proxy statement for its
                  annual general meeting of shareholders that describes that the
                  Audit Committee has satisfied its responsibilities under this
                  Charter for the prior year. In addition, include a copy of
                  this Charter in the annual report to shareholders or the proxy
                  statement at least triennially or the year after any
                  significant amendment to the Charter.






                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>32
<FILENAME>g88198exv99w3.txt
<DESCRIPTION>NOMINATIONS COMMITTEE CHARTER
<TEXT>
<PAGE>
                                                                    Exhibit 99.3


                          NOMINATIONS COMMITTEE CHARTER
                                       OF
                           CONSOLIDATED WATER CO. LTD.


I.       COMPOSITION AND QUALIFICATIONS

The Nominations Committee (the "Committee") of the Board of Directors (the
"Board") of Consolidated Water Co. Ltd. (the "Company") shall be comprised of
not less than three members of the Board, each of whom is determined by the
Board to be independent in accordance with the rules of the Nasdaq Stock Market,
Inc. ("Nasdaq"). However, one (1) member of the Board may serve as a member of
the Committee for a period of no longer than two (2) years who does not qualify
as "independent" under Nasdaq Rule 4200 if the Board determines that such
person's membership on the Committee is required in the best interests of the
Company and its stockholders.

II.      APPOINTMENT AND REMOVAL

The members of the Committee shall be appointed by the Board and shall serve
until such member's successor is duly elected and qualified or until such
member's earlier resignation or removal. A member of the Committee may be
removed, with or without cause, by a majority vote of the Board.

III.     DUTIES AND RESPONSIBILITIES

The duties of the Committee are as follows:

1.       Make recommendations regarding the size as governed by the companies
         Articles of Association and the composition of the Board be not than
         less than one or more than fifteen members.

2.       Establish and recommend to the Board criteria for the selection of new
         directors to serve on the Board.

3.       Identify individuals qualified to become Board members and conduct a
         review of any candidates recommended or submitted by shareholders,
         consistent with criteria approved by the Board.

4.       Make recommendations to the Board regarding all nominations for Board
         membership, whether for the slate of director nominee to be proposed by
         the Board to the shareholders or any director nominees to be elected by
         the Board to fill interim director vacancies.

5.       Report regularly to the Board.

6.       The Committee shall review and reassess periodically the adequacy of
         this Charter and recommend to the Board any changes to this Charter
         that the Committee considers necessary. The Committee shall conduct
         such reviews in the manner it deems appropriate.




<PAGE>
                                     Page 2



IV.      MEETINGS

The Committee shall meet a minimum of two times per year and more frequently as
circumstances require.

V.       ADVISORS

The Committee shall have the exclusive authority, at the expense of the Company,
to retain any search firms to be used to identify director candidates (including
authority to approve fees and other terms of engagement) and such outside
counsel and other advisors, as it seems appropriate in its sole discretion.



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
