Operating Result for the Second Quarter of Year 2009

TTW/0577/09 13 August 2009 Subject: Notification of the Operating Result for the Second Quarter of Year 2009 To: President The Stock Exchange of Thailand The operating results of Thai Tap Water Supply Public Company Limited (the Company) and its subsidiaries for the second quarter period ended 30 June 2009 and 2008 has the consolidated net profit of Baht 398.1 million and Baht 307.7 million, respectively. The consolidated net profit for the second quarter of 2009 represent to increase 29.4% compared with the second quarter of 2008. The Company hereby clarifies the significant changes as follows: 1) The consolidated tap water sales increased by Baht 139.9 million or representing an increase of 16.3% because: a) Water sale income of the Company increased by Baht 98.7 million or representing an increase of 17.6% because (1) Beginning July 2008 onwards, the Minimum Offtake Quantity (MOQ) changed from 250,000 m3/day to 300,000 m3/day. If actual water sale volume higher than MOQ, the Company will be charged at the discounted selling price for the quantity above MOQ in each period. In second quarter of 2009, the Company sold tap water lower than 300,000 m3/day. Therefore, the Company charged the selling price at Baht 23.55 per m3. In second quarter of 2008, the Company sold average tap water 297,795 m3/day which is higher than MOQ. Therefore, the quantity above MOQ will be charged at Baht 10.24 per m3 or representing 55% discount from contract price. (2) Commencing from January - June 2009, Provincial Waterworks Authority (PWA) bought tap water lower than 300,000 m3/day (MOQ) as stipulated in the water sale and purchase agreement. Therefore, the Company recorded the revenue of difference between actual sale and MOQ sale of approximately Baht 34.5 million or representing 1.5 m3. (3) Tap water price increased from the previous year. b) The tap water sale of Pathum Thani Water Co., Ltd. (PTW) increased by 41.2 million or representing an increase of 13.9% since water sale volume increased by 1.2 million m3 or representing an increase of 4.3% and tap water price increased from the previous year. 2) The Cost of sales and services increased by Baht 3.1 million or representing an increase of 1.1% because the Company has the additional repair and maintenances expenses and depreciation of distribution system improvement of approximately Baht 3.4 million. 3) The selling and administrative expenses decreased by Baht 7.6 million or representing a decrease of 18.6% because in the second quarter of the year 2008 the Company recorded the legal fee relating to listing of the Company's ordinary shares to the Stock Exchange of Thailand. 4) The financial cost decreased by Baht 71.8 million or representing a decrease of 39.5% because a) In May 2008, the Company already cleared short-term loans of Baht 3,000 million in full. b) In February 2009, the Company issued debentures with maturity date of 3 years, 5 years and 7 years with average interest cost of 4.53% p.a. to repay the existing long-term loans of Baht 5,839.8 million with carrying interest rate of MLR-1%. c) The interest rate of PTW's long-term loans decreased from 6.75% p.a. to 5.88% p.a. 5) The corporate income tax increased Baht 122.1 million or representing an increase of 12,700.8% because PTW received notice of a change to its net operating loss brought forward from the Area Revenue Office. Based on the assessment made by the Area Revenue Office, PTW has corporate income tax obligations approximately Baht 122.1 million. To reduce the risk of future loss, PTW recorded such corporate income tax expenses. However, PTW disputes this assessment and has therefore appealed to the Appeals Committee of the Revenue Department. At present, the appeal is being considered this dispute. Please be informed accordingly. Yours Faithfully, (Sompodh Sripoom) Managing Director