Warning to Shareholders

A number of companies, including Pennon Group Plc, have become aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters which imply a connection to the company concerned. These are typically from overseas based 'brokers' who target UK shareholders offering to sell them what can turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive and a 2006 survey by the Financial Services Authority (FSA) has reported that the average amount lost by investors is around £20,000. It is not just the novice investor who has been duped in this way; many of the victims had been successfully investing for several years.

Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports into the Company. If you are contacted in this manner, please make sure you obtain the correct name of the person and organisation and where they are based. You should also check that they are properly authorised by the FSA before getting involved and should call the organisation back using their details in the FSA register to verify their authorisation. You can check at http://www.fsa.gov.uk/register/home.do. If you deal with an unauthorised firm, you would not be eligible to receive any payment under the Financial Services Compensation Scheme.

The FSA also maintains on its website a list of unauthorised overseas firms who are targeting, or have targeted, UK investors and any approach from such organisations should be reported to the FSA so that this list can be kept up-to-date and any other appropriate action can be considered. The FSA can be contacted by completing an online form at www.fsa.gov.uk/pages/Doing/Regulated/Law/Alerts/overseas.shtml.

Details of any share dealing facilities that the Company endorses will be included in Company mailings only. More detailed information on this or similar activity can be found on the FSA website www.moneymadeclear.fsa.gov.uk.