1. Agenda item No.: 2 – Why is the dividends proposal as it is?

Before deciding on this proposal the Management Board of AS Tallinna Vesi undertook a thorough review of its cash flows for the next business plan period to ensure that the Company would be able to fully comply with all operational standards and meet its contractual requirements.

The Company engages in regular dialogue with its major shareholders. During these meetings all the majority shareholders have expressed their views on the range of dividends they feel it would be appropriate to pay to the owners of the company in 2011. The Company has taken these points of view into account.

As a result of all of the above factors the Management Board of AS Tallinna Vesi made a proposal to the Council of the company to make a dividend payment in 2011 of 16 405 105 euros. The Supervisory Council familiarised itself with the analysis made and the proposal submitted by the Management Board and voted to accept the proposal. This proposals is now included in the agenda for the Annual General Meeting of Shareholders that will take place on 24th May 2011 (agenda item nr 2).

The final decision to approve the amount of dividends to be paid in 2011 will be made by the shareholders of AS Tallinna Vesi at this meeting.

2. Agenda item No.: 3 and 4 – Why are Supervisory Council members recalled and re-elected?

The Company has decided to recall and re-elect all elected Supervisory Council member Mr Simon Roger Gardiner, whose term of office going to expire 14.12.2012, due to the need to harmonise the terms of office of the elected members of the Council, as the end dates of their terms have come to vary over the years.

Due to the fact that the term of office of Robert John Gallienne, Valdur Laid, Mart Mägi and Rein Ratas as authorized Council members of AS Tallinna Vesi expired on 18th May 2012, then there is no need to recall them prior to nomination for re-election.

3. Agenda item No.: 6 – Why is the letter from the shareholder to the Government of the Republic for Estonia up for voting?

At last year’s Annual general meeting some shareholders suggested a question at the meeting however this motion was unable to be discussed and voted on due to the limited Powers of Attorney given to the representative of the City of Tallinn. Therefore, this year the same shareholders have presented a written letter to the Supervisory Council of the Company asking to send the question prepared to the Prime Minister and Minister of Economic Affairs and Communications of Estonia, asking from the Minister of Economic Affairs and Communications of Estonia information on what actions the Minister is going to take to ensure that the investments made by local and overseas investors into Tallinna Vesi and Estonia are given due protection within the Estonian legal framework from the recent changes in the law that have significantly changed the conditions that were valid during the privatization process and its initial public offering on Tallinn Stock Exchange.