Explanation of the 2010 first quarter operating result

- Translation - No. TTW/ 207/10 4 May 2010 Subject Explanation of the 2010 first quarter operating result compare to 2009 first quarter operating result To The President The Stock Exchange of Thailand The operating results of Thai Tap Water Supply Public Company Limited ("the Company") and its subsidiaries for the first quarter of year 2010 and 2009 are Baht 516.7 million and Baht 305.8 million respectively, which represent an increase of 69.0% from first quarter of year 2009. The Company hereby clarifies the significant changes as follows: 1. The consolidated tap water sales increased by Baht 97.3 million or representing an increase of 10.3% from first quarter tap water sales of year 2009 because a. The revenue from selling tap water of the Company increased by Baht 94.4 million or 15.3% because 1) Sales volume of the Company increased 3.0 million cubic meters or 11.9%; 2) Selling price increase from the previous year; and 3) In August 2009, the Company acquired the operation rights of treated water and waste water management at Bangpa-In Industrial Estate. Therefore, the Company has the tap water sale in Bangpa-in Industrial Estate of Baht 34.4 million (Q1'2009 : the Company didn't has the tap water sales in Bangpa-in Industrial Estate.) 2. Service income increased by Baht 13.4 million or representing an increase of 136.7% from first quarter service income of year 2009, because of the waste water treatment service income in Bangpa-In Industrial Estate of Baht 10.2 million (Q1'2009 : the Company didn't has the waste water treatment service income in Bangpa-in Industrial Estate.) 3. Selling and administration expense increased by Baht 9.2 million or representing an increase of 26.6% from first quarter of year 2009 because the increase in advertising, promotion and marketing expense amount of Baht 5.5 million, and employee expenses of Baht 3.7 million. 4. Amortization of rights to produce and sell treated water and waste water increase Baht 8.6 million, or representing an increase of 100.0% from the first quarter of year 2009 because in August 2009, the Company acquired the rights to operate and manage treated water and waste water at Bangpa-In Industrial Estate for the period of 30 years. Such rights will be amortized by unit of production method over the useful life period. 5. Financial expenses decreased by Baht 150.8 million, or representing an increase of 58.9% from first quarter of year 2009 because in February 2009, the Company prepaid existing long-term loans. As stipulated in the long-term loan agreement, the Company has to prepay the prepayment fee of Baht 116.8 million. In addition, the cost of fund of PTW decreased by 1.50% p.a. 6. The corporate income tax increased by Baht 43.6 million, or representing an increase 100.0% from first quarter of year 2009 because in second quarter of year 2009, PTW received the notice of a change to its net operating loss carried forward from the Area Revenue Office. Based on the assessment made by the Area Revenue Office, PTW has obligation to pay corporate income tax from year 2009 onwards. To reduce the risk of future loss, PTW recorded such corporate income tax beginning in second quarter of year 2009. Please be informed accordingly. Yours Faithfully, (Somkiat Pattamamongkolchai) Accounting and Finance Director