Market announcement

Title

Results of operations for the 4th quarter and 2008 financial year (EUR)

Message

MANAGEMENT REPORT                                                               
RESULTS OF OPERATIONS - FOR THE 4th QUARTER 2008                                


Overview                                                                        

During the twelve months of 2008 the Company's total sales increased, year on   
year, by 11.0% to 46.0 mln EUR. Total water and sewerage services sale volumes  
increased in the twelve months of 2008 by 0.3% compared to the same twelve      
months of 2007, respective sales increased by 9.8%. Within the service area     
sales to residential customers increased by 8.7% year on year, sales to         
commercial customers increased by 7.4% year on year, and sales to customers     
outside of the service area increased by 49.4% year on year, reaching 3.8 mln m3
or 1.7 mln EUR. The Company's profit before taxes was 23.1 mln EUR, which is an 
8.7% increase compared to the same twelve months of 2007. Eliminating the       
one-off nitrogen provision release in the 1st quarter of 2007, profit before tax
in the twelve months of 2008 increased by 13.2%. In 2008 the Company invested   
19.6 mln EUR, of which 16.9 mln EUR was invested in network extension and       
rehabilitation.                                                                 


--------------------------------------------------------------------------------
| mln EUR             | 4 Q  |  4 Q  | Change  |    12    |    12    | Change  |
|                     | 2008 | 2007  |         |  months  |  months  |         |
|                     |      |       |         |   2008   |   2007   |         |
--------------------------------------------------------------------------------
| Sales               | 11,7 |  10,6 |   10,3% |     46,0 |     41,4 |   11,0% |
--------------------------------------------------------------------------------
| Gross profit        |  6,9 |   6,8 |    2,3% |     28,6 |     27,6 |    3,6% |
--------------------------------------------------------------------------------
| Gross profit margin | 59,5 |  64,1 |   -7,2% |     62,1 |     66,6 |   -6,7% |
| %                   |      |       |         |          |          |         |
--------------------------------------------------------------------------------
| Operating profit    |  6,6 |   6,0 |   11,4% |     25,9 |     24,1 |    7,4% |
--------------------------------------------------------------------------------
| Operating profit    | 56,9 |  56,4 |    1,0% |     56,3 |     58,2 |   -3,3% |
| margin %            |      |       |         |          |          |         |
--------------------------------------------------------------------------------
| Profit before taxes |  5,9 |   5,2 |   13,3% |     23,1 |     21,3 |    8,7% |
--------------------------------------------------------------------------------
| Net profit          |  5,9 |   5,2 |   13,3% |     18,9 |     17,8 |    6,5% |
--------------------------------------------------------------------------------
| Net profit margin % | 50,8 |  49,5 |    2,7% |     41,1 |     42,9 |   -4,1% |
--------------------------------------------------------------------------------
| ROA %               |  3,6 |   3,2 |   13,3% |     11,6 |     10,9 |    6,5% |
--------------------------------------------------------------------------------
| Debt to total       | 49,9 |  51,8 |   -3,5% |     49,9 |     51,8 |   -3,5% |
| capital employed    |      |       |         |          |          |         |
--------------------------------------------------------------------------------

Gross profit margin - Gross profit / Net sales                                  
Operating profit margin - Operating profit / Net sales                          
Net Profit margin - Net Profit / Net sales                                      
ROA - Net profit /Total Assets                                                  
Debt to Total capital employed - Total Liabilities / Total capital employed     


Profit and Loss Statement                                                       

4th quarter 2008                                                                

Sales                                                                           

In the 4th quarter of 2008 the Company's total sales increased, year on year, by
10.3% to 11.7 mln EUR. Sales in the main operating activity principally comprise
of sales of water and treatment of wastewater to domestic and commercial        
customers within and outside of the service area, and fees received from the    
City of Tallinn for operating and maintaining the storm water system.           

Sales of water and wastewater services were 10.5 mln EUR, an 8.0% increase      
compared to the 4th quarter of 2007, resulting from the 11.7% increase in       
tariffs from 1 January 2008 for the Company's residential and commercial        
customers combined with the factors described below.                            

Included within this amount were the following increases by sector: within the  
service area sales to residential customers increased by 8.0% to 5.6 mln EUR.   
Sales to commercial customers increased by 4.4% to 4.2 mln EUR. Sales to        
customers outside of the service area - primarily bulk volumes of wastewater    
treatment services provided to the surrounding municipalities - increased by    
40.9% reaching 1.1 mln m3 or 0.44 mln EUR. Over pollution fees received were    
0.22 mln EUR, 31.3% increase compared to the 4th quarter of 2007.               

In the 4th quarter of 2008, the volumes sold to residential customers dropped   
3.3%. We believe that this is mainly related to the fact that people have moved 
to the surrounding areas of Tallinn.                                            

The volumes sold to commercial customers inside the service area decreased by   
6.4% compared to the relevant period in 2007 due to several factors combined.   
Part of the reduction in sales volumes in Tallinn is due to companies moving to 
the surrounding municipalities, supplemented by companies implementing different
efficiency measures or reducing their production.                               
                                                                                
The real estate market has changed considerably compared to last year. Although 
the number of new apartments and business buildings being constructed in Tallinn
in 2008 remained high, a large share of new buildings still remain vacant as    
commercial customers as well as people in need of space are moving to           
surrounding areas due to more affordable real estate prices.                    

This trend is also reflected in the Company's sales to surrounding areas, which 
has increased by 40.9% in the 4th quarter of 2008 compared to the same period   
last year. This reflects the success of the Company's strategy to re-capture    
customers leaving Tallinn. The Company is actively looking for the further      
expansion opportunities into the neighboring municipalities.                    

The sales from the operation and maintenance of the storm water and fire-hydrant
system increased by 32.2% to 1.0 mln EUR in the 4th quarter of 2008 compared to 
the same period in 2007. This is in accordance with the terms and conditions of 
the contract whereby the storm water and fire hydrant costs are invoiced based  
on actual costs and volumes treated. This is contractually agreed up to 2020.   


Cost of Goods Sold and Gross Margin                                             

The cost of goods sold for the main operating activity was 4.7 mln EUR in the   
4th quarter of 2008, an increase of 0.93 mln EUR or 24.4% from the equivalent   
period in 2007.                                                                 

In the 4th quarter of 2008 the Company did not achieve the beneficial 0.5       
coefficient for pollution tax, and as a result the amount of pollution tax      
payable was 0.45 mln EUR compared to 0.11 mln EUR in 4th quarter of 2007.  This 
increase in pollution tax is due to the combination of the coefficient and      
increase in tax rates year on year by 20%, supplemented by increased volume and 
pollution impact. Despite the fact that the pollution level of the incoming     
sewerage does vary and the Company does not have full control over storm water  
outlets regarding the pollution, we are working hard to use the optimum level of
chemicals to achieve the 0.5 coefficient in the following quarters.             

The chemical costs were 0.33 mln EUR, representing a 1.3% increase compared to  
the corresponding period in 2007. This result is the combination of volumes     
treated, chemicals dosed and the price inflation.                               

Electricity costs increased by 0.10 mln EUR or 24.6% in the 4th quarter of 2008 
compared to the 4th quarter of 2007 due to higher electricity prices combined   
with volumes treated.                                                           

Salary expenses increased in the 4th quarter of 2008, year on year, by 0.13 mln 
EUR or 13.9% due to a number of factors. Firstly, increased headcount from the  
new services launched. Secondly, a highly competitive labour market has led to  
significant salary inflation. Finally in the 1st quarter of 2008 the Company    
restructured and combined departments which resulted in transferring cost from  
one line to another.                                                            

Depreciation charges increased in the 4th quarter of 2008 by 0.18 mln EUR or    
15.5% year on year due to new sludge treatment building commissioned in the end 
of 2007. Also in the beginning of 2008 the depreciation rates were revised to   
correspond with the useful life of assets.                                      

Other cost of goods sold in the main operating activity increased by 0.16 mln   
EUR, or 25.4% year on year. This was due to higher costs on a number of support 
services and maintenance and repair contracts, reflecting the increase in labour
and services costs, but also the tightening of warranty requirements regarding  
the emergency repair works in Tallinn.                                          

The cost pressure sets the challenge to the management to identify the further  
efficiency opportunities through review of processes, procedures and            
procurements.                                                                   

As a result of all of the above the Company's gross profit for the 4th quarter  
of 2008 was 6.9 mln EUR, which is an increase of 0.16 mln EUR, or 2.3%, compared
to the gross profit of 6.8 mln EUR for the 4th quarter of 2007.                 

Operating Costs and Operating Margin                                            

Marketing expenses decreased by 0.05 mln EUR to 0.20 mln EUR during the 4th     
quarter of 2008 compared to the corresponding period in 2007. This is partly the
result of the structural changes, balanced by the increase in depreciation      
charges.                                                                        

Mainly as a consequence of structural changes the General administration        
expenses decreased by 0.08 mln EUR to 0.89 mln EUR in the 4th quarter of 2008   
year on year.                                                                   

Other net income/expenses                                                       

In order to more appropriately reflect the substance of different types of      
compensations received, the accounting policy for constructions was changed in  
2008. In accordance with the new policy, any compensation received from the     
local governments are treated as government grants in accordance with IAS 20 and
are recognized as income over the periods necessary to match them with the      
related costs which they are intended to compensate. Accordingly, such          
compensations are deducted from the carrying amount of the pipeline assets      
constructed; any excess of the compensation receivable compared to the related  
construction cost that the compensation is intended to compensate is recognized 
in income once the construction is completed. The net effect of these           
transactions can be seen from other income/expenses and the change in the       
accounting policy is accounted retrospectively.                                 

Until 2007 and also during the first 3 quarters of 2008, the Company accounted  
for any compensations received from customers and local governments for         
constructing new pipelines as income once the construction was completed and    
receipt of the compensation was probable. Compensations were presented in the   
income statement as “Revenues from other operating activities” and the related  
construction costs were presented as “Costs of goods sold (other operating      
activities)”.                                                                   

Income/expenses from constructions totaled a net income of 0.91 mln EUR in the  
4th quarter of 2008 compared to a net income of 0.34 mln EUR in the 4th quarter 
of 2007. The rest of the other income/expenses totaled an expense of 0.12 mln   
EUR in the 4th quarter of 2008 compared to an income of 0.06 mln EUR in the 4th 
quarter of 2007.                                                                

As a result of all of the above the Company's operating profit for the 4th      
quarter of 2008 was 6.6 mln EUR, an increase of 0.68 mln EUR compared to an     
operating profit of 6.0 mln EUR achieved in the 4th quarter of 2007. Compared to
the operating profit in the 4th quarter of 2007, the operating profit has       
increased 11.4%.                                                                

Financial expenses                                                              

Net Financial expenses were 0.72 mln EUR in the 4th quarter of 2008, which is a 
decrease of 0.02 mln EUR or 2.2% compared to the 4th quarter of 2007. The       
Company's interest costs have increased by 2.0% compared to the 4th quarter of  
2007. This is due to the increase in the 6 month Euribor rate. The increase in  
interest expenses is partially offset by an increase in financial income earned 
during the 4th quarter of 2008, as a result of a more favourable cash position  
and increasing interest rates.                                                  

Profit Before Tax                                                               

The Company's profit before taxes for the 4th quarter of 2008 was 5.9 mln EUR,  
which is 0.69 mln EUR higher than the profit before taxes of 5.2 mln EUR for the
4th quarter of 2007.                                                            


Results for the twelve months of 2008                                           

During the twelve months of 2008 the Company's total sales increased, year on   
year, by 11.0% to 46.0 mln EUR.  Sales from the Company's main operating        
activities were 46.0 mln EUR. Sales of water and wastewater treatment were 42.1 
mln EUR, a 9.8% increase compared to the twelve months of 2007.                 

The Company's profit before taxes for the twelve months of 2008 was 23.1 mln    
EUR, which is 1.9 mln EUR higher than the profit before taxes of 21.3 mln EUR in
the relevant period in 2007. The results for the twelve months of 2007 were     
impacted by the fact that the Ministry of Environment gave final approval to the
success of the nitrogen project, which resulted in the release of a provision   
worth 0.85 mln EUR for environmental taxes. Looking at the underlying profit    
before taxes for the twelve months of 2007, it shows a 2.7 mln EUR or 13.2%     
increase in 2008 for the same period.                                           


Balance sheet                                                                   

During the twelve months of 2008 the Company invested 19.6 mln EUR into fixed   
assets. Non-current assets were 141.4 mln EUR at 31 December 2008. Current      
assets decreased by 1.7 mln EUR to 22.2 mln EUR in the twelve months of the     
year, customer receivables increased by 0.24 mln EUR. During the twelve months  
of 2008 cash at bank increased by 3.3 mln EUR.                                  

Current liabilities decreased by 0.45 mln EUR to 12.3 mln EUR in the twelve     
months of the year. This was mainly due to increases in Current portion of      
long-term borrowings by 2.7 mln EUR, as result of the reclassification of the   
loan based on repayment schedule and decrease in Trade payables.                

The Company continues to maintain its leverage level within its target range of 
50% with total liabilities to total capital employed of 49.9% as of 31 December 
2008. Long-term liabilities stood at 69.4 mln EUR at the end of December 2008,  
consisting almost entirely of the outstanding balance on the two long-term bank 
loans.                                                                          


Cash flow                                                                       

During the twelve months of 2008, the Company generated 25.1 mln EUR of cash    
flows from operating activities, an increase of 3.8 mln EUR compared to the     
corresponding period in 2007. Underlying operating profit continues to be the   
main driver for growth, supplemented by debt collection in twelve months of     
2008.                                                                           

In the twelve months of 2008 net cash outflows from investing activities were   
1.7 mln EUR, which is 8.1 mln EUR less than in 2007. This was mainly due to the 
change in constructions compensation mechanism as result of the 30 November 2007
agreement with the local municipality. In the 1st quarter 2008 the Company      
received the compensation for 2007 constructions.  In 2008 the Company invested 
19.6 mln EUR - 16.9 mln EUR on networks (including 12.1 mln EUR on extension and
developments), 1.1 mln EUR at Paljassaare wastewater treatment plant and sludge 
treatment, 0.63 mln EUR on water quality (Ülemiste water treatment plant and raw
water) and 0.88 mln EUR for other investments (IT, capital maintenance, meters, 
etc).                                                                           

The cash outflows from financing activities were 20.1 mln EUR during the twelve 
months of 2008 compared to cash outflow of 16.1 mln EUR during the same twelve  
months of 2007, representing the payouts of the dividend and the income tax on  
dividends of respective years. The Company made its first scheduled repayment to
EBRD. Considering the extensive network extension program and related investment
outflows until 2011, the Company does not intend to reduce the loan capital and 
therefore the repayment amount was replaced with a new loan drawdown from       
Nordea. The Company signed the new loan agreement with Nordea in November 2008. 
The total loan facility is 37.5 mln EUR and the interest margin applicable to   
the 6 month Euribor is 115 bps.                                                 

As a result of all of the above factors, the total cash inflow in the twelve    
months of 2008 was 3.3 mln EUR compared to a cash outflow of 4.5 mln EUR in the 
twelve months of 2007. Cash and cash equivalents stood at 14.7 mln EUR as at 31 
December 2008.                                                                  


Employees                                                                       

At the end of the 4th quarter of 2008, the number of employees was 327, compared
to 312 at the end of the 4th quarter of 2007.                                   


Dividends and share performance                                                 

Based on the results of the 2007 financial year, the Company paid 15,914,640 EUR
of dividends. Of this 639 EUR was paid to the owner of the B-share              
and 15,914,000 EUR, i.e. 0.80 EUR per share to the owners of the A-shares.  The 
dividends were paid out on 13 June 2008, based on the list of shareholders,     
which was fixed on 30 May 2008.                                                 

As of 31 December 2008 AS Tallinna Vesi shareholders, with a direct holding over
5%, were:                                                                       

--------------------------------------------------------------------------------
| United Utilities (Tallinn) BV                         | 35.3%                |
--------------------------------------------------------------------------------
| City of Tallinn	                                | 34.7%                |
--------------------------------------------------------------------------------
| Credit Suisse Securities (Europe) Ltd Prime Brokerage | 5.76%                |
| A/C Prime Brokerage Clients                           |                      |
--------------------------------------------------------------------------------
| HSBC Bank Plc Re Parvus European Absolute             | 5.46%                |
| Opportunities Master Fund                             |                      |
--------------------------------------------------------------------------------

Parvus AM has declared that their shareholding in the clients' accounts exceeds 
10% and AKO Capital has declared their indirect ownership above 5% of the share 
capital.                                                                        

At the end of the quarter, 31 December 2008, the closing price of the AS        
Tallinna Vesi share was 8.99 EUR, which is a 12.8% decrease compared to the     
closing price of 10.31 EUR at the beginning of quarter,  this is still          
outperforming the market as the OMX Tallinn index dropped by 41.7% during the   
quarter.                                                                        



Operational highlights in the twelve months of 2008                             

In 2008 the water quality as measured at the customer's taps again showed       
improvement with over 98% of the samples taken fully compliant with European    
standards against a requirement of 95%. We are pleased to report for 2008 the   
compliance with all requirements of the Levels of Services established by the   
contract with City of Tallinn. Annual compliance at the waste water treatment   
plant was also achieved.                                                        
2008 was the first year of the three year network extension programme and the   
Company delivered the planned lengths in 2008. In total over 34 km of wastewater
pipe, 14.4 km of storm water pipe and 2.9 km of water pipe were constructed,    
thus providing the opportunity for over 1300 customers to connect to the        
wastewater network. The programme continues in 2009 with many of the designs    
already complete and construction contracts being awarded. During the 2008      
network extension programme the Company also took the opportunity to replace    
over 16 km of water pipe to further improve the water quality and pressure      
regimes in the targeted areas.                                                  
Installation of more valves on the water network, replacing connection pipes and
also responding to leakages faster, saw the leakage level reduced to 17.25%, a  
further improvement on the 19.2% achieved in 2007.                              
2008 was a wet year and the Company was very diligent ensuring the cleaning and 
proper function of the street gullies and storm water system and this resulted  
in less flooding issues in the City. The Company also pressure washed over 165  
km of wastewater pipe, 65 km more than in 2007, and as a consequence the number 
of blockages was reduced by more than 6%.                                       
The Company implemented the development component in the 1st quarter of 2008    
according to the Services Agreement Amendment, which was signed with the City of
Tallinn on 30 November 2007. The Services Agreement is extended until 2020 and  
the k-coefficient is also fixed until 2020 - 2% in years 2009 to 2010 and 0% in 
years 2011 to 2020. No extra capital expenditures (in addition to maintenance   
capex and extensions program agreed in the contract) can be imposed on the      
Company until 2020. According to the agreement the network extension            
constructions must be completed by March 2011. To compensate the Company for the
construction and financing costs, a specific development component is included  
into the Tallinn domestic water tariff starting from 1 March 2008 to the end of 
2017, and the City of Tallinn will compensate 0.28 mln EUR every month for the  
storm water constructions until the end of 2011. The development component shall
be compensated to the customers with direct payment to the Company by the City  
of Tallinn. The component is bigger during the construction period (0.58 kroons 
per m3 until 31 December 2011 and 0.39 kroons per m3 in years 2012 to 2017).    
On the 5th of August the Company concluded an operating agreement with Maardu   
City and Maardu Vesi. When the operating contract comes into force, AS Tallinna 
Vesi shall help AS Maardu Vesi to finance the self-financing part required      
within the European Union Assistance Project during the period 2009-2012 with up
to a total of 5.1 mln EUR over the period. The Company shall get the investment 
back through the capital component to be included in the tariff within 20 years.
On the basis of the cooperation of the companies and the subsidies of the       
European Union the problems regarding the water quality in Maardu shall be      
solved in the forthcoming years and in a longer perspective Maardu shall be     
supplied with drinking water from Ülemiste Water Treatment Plant.               
Administrating the infrastructure of AS Maardu Vesi enables AS Tallinna Vesi to 
increase its customer portfolio and to grow turnover. In addition to the        
required self-financing AS Tallinna Vesi shall provide the customers of AS      
Maardu Vesi with a modern service of operating the assets with a good-quality   
customer service. There are about 20 000 residents living in the operating area 
of AS Maardu Vesi. The operating contract has been planned for the duration of  
30 years. Initially the contract was planned to commence from 1 January 2009,   
assuming the EU funding confirmation in 2008. In January 2009 Maardu Vesi       
received the positive confirmation for their application to use the EU funding. 
Tallinna Vesi shall start to operate the assets and provide full service at the 
latest from 1 April 2009 after the preparation period during which the assets   
are taken over. AS Maardu Vesi shall still remain the owner of all assets.      
The Company submitted the application for the tariff increase from 1st January  
2009 in the 3rd quarter. The City Government approved the 12.8% tariff increase 
for water and wastewater services on 1 October 2008. The tariff increase is     
applicable from 1st January 2009 and consists of 11.4% of CPI increase, 2% of   
k-coefficient and -0.6% of change of law. The 12.8% tariff increase is          
applicable in the main service area and is similar outside the main service     
area, depending still on individual contracts with the municipalities.          
The usage of the web based self service has increased by more than 2 times      
compared to 2007, 9.7% of invoices were issued via web.                         


Additional information:                                                         
Siiri Lahe                                                                      
Chief Financial Officer                                                         
+372 6262 262                                                                   
siiri.lahe@tvesi.ee                                                             




--------------------------------------------------------------------------------
| INCOME STATEMENT               |    IV    |    IV    | 12 months | 12 months |
|                                | quarter  | quarter  |           |           |
--------------------------------------------------------------------------------
| (thousand EUR)                 |   2008   |   2007   |   2008    |   2007    |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Sales from main operating      |   11 678 |   10 591 |    46 011 |    41 436 |
| activities                     |          |          |           |           |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Costs of goods sold (main      |   -4 728 |   -3 801 |   -17 432 |   -13 848 |
| operating activities)          |          |          |           |           |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| GROSS PROFIT                   |    6 949 |    6 790 |    28 579 |    27 588 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Marketing expenses             |     -197 |     -245 |      -787 |      -866 |
--------------------------------------------------------------------------------
| General administration         |     -892 |     -976 |    -3 486 |    -3 633 |
| expenses                       |          |          |           |           |
--------------------------------------------------------------------------------
| Other income/ expenses (-)     |      786 |      400 |     1 601 |     1 029 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| OPERATING PROFIT               |    6 647 |    5 968 |    25 907 |    24 118 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Financial income / expenses    |     -714 |     -730 |    -2 761 |    -2 827 |
| (-)                            |          |          |           |           |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| PROFIT BEFORE TAXES            |    5 933 |    5 238 |    23 146 |    21 291 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Income tax on dividends        |        0 |        0 |    -4 231 |    -3 533 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| NET PROFIT FOR THE PERIOD      |    5 933 |    5 238 |    18 916 |    17 757 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Attributable to:               |          |          |           |           |
--------------------------------------------------------------------------------
| Equity holders of A-shares     |    5 933 |    5 238 |    18 915 |    17 757 |
--------------------------------------------------------------------------------
| B-share holder                 |     0,64 |     0,64 |      0,64 |      0,64 |
--------------------------------------------------------------------------------
|                                |          |          |           |           |
--------------------------------------------------------------------------------
| Earnings per share in euros    |     0,30 |     0,26 |      0,95 |      0,89 |
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
| BALANCE SHEET                                     |            |             |
--------------------------------------------------------------------------------
| (thousand EUR)                                    | 31.12.2008 |  31.12.2007 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| ASSETS                                            |            |             |
--------------------------------------------------------------------------------
| CURRENT ASSETS                                    |            |             |
--------------------------------------------------------------------------------
| Cash at bank and in hand                          |     14 691 |      11 403 |
--------------------------------------------------------------------------------
| Customer receivables                              |      6 915 |       6 679 |
--------------------------------------------------------------------------------
| Accrued income and prepaid expenses               |        283 |       5 490 |
--------------------------------------------------------------------------------
| Inventories                                       |        240 |         233 |
--------------------------------------------------------------------------------
| Assets for sale                                   |         73 |          72 |
--------------------------------------------------------------------------------
| TOTAL CURRENT ASSETS                              |     22 203 |      23 877 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS                                |            |             |
--------------------------------------------------------------------------------
| Tangible assets                                   |    131 167 |     127 375 |
--------------------------------------------------------------------------------
| Intangible assets                                 |      2 601 |       3 140 |
--------------------------------------------------------------------------------
| Unfinished assets - non connections               |      1 586 |       3 070 |
--------------------------------------------------------------------------------
| Unfinished pipelines - new connections            |      5 878 |       5 756 |
--------------------------------------------------------------------------------
| Prepayments for fixed assets                      |        118 |         345 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT ASSETS                          |    141 350 |     139 686 |
--------------------------------------------------------------------------------
| TOTAL ASSETS                                      |    163 553 |     163 562 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| LIABILITIES                                       |            |             |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CURRENT LIABILITIES                               |            |             |
--------------------------------------------------------------------------------
| Current portion of long-term borrowings           |      5 285 |       2 651 |
--------------------------------------------------------------------------------
| Trade and other payables, incl. dividends         |      4 067 |       5 558 |
--------------------------------------------------------------------------------
| Taxes payable                                     |      1 510 |       1 693 |
--------------------------------------------------------------------------------
| Short-term provisions                             |        159 |         143 |
--------------------------------------------------------------------------------
| Deferred income                                   |      1 265 |       2 691 |
--------------------------------------------------------------------------------
| TOTAL CURRENT LIABILITIES                         |     12 287 |      12 736 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES                           |            |             |
--------------------------------------------------------------------------------
| Bank loans                                        |     69 331 |      71 932 |
--------------------------------------------------------------------------------
| Other payables                                    |         47 |           7 |
--------------------------------------------------------------------------------
| TOTAL NON-CURRENT LIABILITIES                     |     69 378 |      71 939 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES                                 |     81 665 |      84 675 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| EQUITY CAPITAL                                    |            |             |
--------------------------------------------------------------------------------
| Share capital                                     |     12 782 |      12 782 |
--------------------------------------------------------------------------------
| Share premium                                     |     24 734 |      24 734 |
--------------------------------------------------------------------------------
| Statutory legal reserve                           |      1 278 |       1 278 |
--------------------------------------------------------------------------------
| Accumulated profit                                |     24 178 |      22 336 |
--------------------------------------------------------------------------------
| Net profit for the period                         |     18 916 |      17 757 |
--------------------------------------------------------------------------------
| TOTAL EQUITY CAPITAL                              |     81 889 |      78 887 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES AND EQUITY CAPITAL              |    163 553 |     163 562 |
--------------------------------------------------------------------------------



--------------------------------------------------------------------------------
| CASH FLOW STATEMENT                               | 12 months  |  12 months  |
--------------------------------------------------------------------------------
| (thousand EUR)                                    |    2008    |    2007     |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CASH FLOWS FROM OPERATING ACTIVITIES              |            |             |
--------------------------------------------------------------------------------
| Operating profit                                  |     25 907 |      24 118 |
--------------------------------------------------------------------------------
| Adjustment for depreciation                       |      5 731 |       5 064 |
--------------------------------------------------------------------------------
| Adjustment for income and expenses from           |     -1 784 |        -911 |
| constructions                                     |            |             |
--------------------------------------------------------------------------------
| Other financial income and expenses               |        -57 |        -101 |
--------------------------------------------------------------------------------
| Profit from sale of fixed assets                  |        -29 |        -155 |
--------------------------------------------------------------------------------
| Expensed fixed assets                             |         -1 |          30 |
--------------------------------------------------------------------------------
| Capitalization of operating expenses              |     -1 611 |      -1 263 |
--------------------------------------------------------------------------------
| Movement in current assets involved in operating  |        601 |      -2 049 |
| activities                                        |            |             |
--------------------------------------------------------------------------------
| Movement in liabilities involved in operating     |         48 |         -21 |
| activities                                        |            |             |
--------------------------------------------------------------------------------
| Interest paid                                     |     -3 679 |      -3 386 |
--------------------------------------------------------------------------------
| Total cash flow from operating activities         |     25 126 |      21 326 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CASH FLOWS FROM INVESTING ACTIVITIES              |            |             |
--------------------------------------------------------------------------------
| Acquisition of fixed assets (incl pipelines       |    -19 633 |     -16 997 |
| construction)                                     |            |             |
--------------------------------------------------------------------------------
| Proceeds from pipelines financed by construction  |     16 808 |       6 509 |
| income                                            |            |             |
--------------------------------------------------------------------------------
| Proceeds from sale of and prepayments received    |         31 |          25 |
| for fixed assets                                  |            |             |
--------------------------------------------------------------------------------
| Proceeds from sale of assets and real estate      |          0 |          15 |
| investments                                       |            |             |
--------------------------------------------------------------------------------
| Interest received                                 |      1 080 |         676 |
--------------------------------------------------------------------------------
| Total cash flow from investing activities         |     -1 714 |      -9 773 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CASH FLOWS FROM FINANCING ACTIVITIES              |            |             |
--------------------------------------------------------------------------------
| Received long-term loans                          |      2 700 |           0 |
--------------------------------------------------------------------------------
| Repayment of long-term loans                      |     -2 679 |           0 |
--------------------------------------------------------------------------------
| Finance lease payments                            |          0 |         -30 |
--------------------------------------------------------------------------------
| Dividends paid                                    |    -15 915 |     -12 527 |
--------------------------------------------------------------------------------
| Income tax on dividends                           |     -4 231 |      -3 533 |
--------------------------------------------------------------------------------
| Total cash flow from financing activities         |    -20 124 |     -16 091 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| Change in cash and bank accounts                  |      3 288 |      -4 537 |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CASH AND EQUIVALENTS AT THE BEGINNING OF THE      |     11 403 |      15 940 |
| PERIOD                                            |            |             |
--------------------------------------------------------------------------------
|                                                   |            |             |
--------------------------------------------------------------------------------
| CASH AND EQUIVALENTS AT THE END OF THE PERIOD     |     14 691 |      11 403 |
--------------------------------------------------------------------------------