<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 20-F
[ x ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934, for the fiscal year ended:
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934, for the transition period
from ___________ to __________.
COMMISSION FILE NO:
Irutil Co. Inc.
(Exact name of registrant as specific in its charter)
The Commonwealth of The Bahamas
(Jurisdiction of incorporation or organization)
Brigadoon House, P.O. Box 17736
Nassau, Bahamas
(Address of principal executive offices, including postal code)
Registrant's area code and telephone number: (242) 324-3555
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class: None
Name of each exchange on which registered: N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class: Ordinary Shares
Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.
Title of each class: None
Indicate the number of outstanding shares of each of the issuer's
classes of capital or Ordinary Shares as of the close of the period
covered by the annual report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
[ ] YES [ x ] NO
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Indicate by check mark which financial statement item the registrant
has elected to follow:
[ x ] ITEM 17 [ ] ITEM 18
(APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13, or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
[ ] YES [ ] NO
INDEX BEGINS ON PAGE 30.
INTRODUCTION
As used herein, except as the context otherwise requires, the term
"Company" refers to Irutil Co. Inc., a corporation organized under the
laws of the Commonwealth of the Bahamas.
The Company publishes its financial statements expressed in United
States dollars. In this document, references to "US dollars" or "US$"
are to the currency of the United States of America.
The Company's fiscal year ends on December 31 of each year.
References in this document to a particular year are to the fiscal year
unless otherwise indicated.
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ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Irutil Co. Inc. (the "Company"), is a start-up corporation which
has not begun operations. The Company was organized under the laws of
the Commonwealth of The Bahamas on September 8, 1995 as Southern Energy
Co. Inc., and intends to engage in the business of generating
electricity and distributing the same to rural or remote cities,
villages, and towns initially in the Philippines. As of the date
hereof, the Company does not generate or distribute any electricity to
anyone and there is no assurance that the Company's plans to generate
and sell electricity to anyone will ever occur.
THE COMPANY'S PLAN FOR GENERATING ELECTRICITY
The Company's intends to acquire small rural electric corporations
("RECS") located in the Philippine Islands and consolidate the same
with other rural electric regional electric cooperatives, municipals,
and distribution companies to form a larger entity. Currently, the
Company has not acquired any electric corporations and there is no
assurance that the Company will be able to acquire any entities. The
Company has entered into a letter of intent with ESI E&C Co., Inc.
("ESI"), a corporation owned and controlled by David Atkinson, the
Company's President, to acquire one Philippine energy corporation.
The Company believes that by acquiring multiple energy
corporations and consolidating the same, that it will (1) increase its
purchasing power, (2) be able to attract financing, (3) attract a
qualified work force, (4) be able to influence local, regional, and
national government legislation, and (5) centralize cost structures in
operations and administration, thereby decreasing the cost of operation
while increasing revenue (6) operate the rural electric corporations
more efficiently and profitably than the present government/cooperative
structure.
Subsequent to making its initial acquisition, the Company intends
to restructure, rehabilitate, and expand transmission, distribution,
metering, and supervisory control and data acquisition system ("SCADA")
of the RECS franchise area to lower costs, expand service and increase
reliability. The foregoing plans have led the Company to focus its
business development efforts in regions of the world in which it
already has local business relationships and where the opportunity
exists to execute its strategy.
The Company has entered into a non-binding letter of intent with
ESI to purchase its partnership interest in a partnership to be formed
by Cotabato Electric Cooperative Inc., North Cotabato, Mindanao,
Philippines, a REC ("Cotabato") and ESI. ESI is a corporation entirely
owned by David Atkinson, the Company's President. The partnership was
formed for the purpose of designing, building, owing and operating the
Kabacan 8MW mini-hydro project. As of the date hereof, the partnership
has not been formed and there is no assurance the partnership will be
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formed in the future. Further, the Kabacan mini-hydro project has not
been initiated and there is no assurance such project will ever be
initiated. The letter of intent provides that the Company will:
a. Acquire ESI's partnership interest in the partnership
between Cotabato and ESI. Said 90% interest constitutes the
entire ownership interest of ESI in the partnership.
b. Refinance the existing debt on the Cotabato balance
sheet, and
c. Conduct due diligence over a period of the next 90 days
All of the material terms of a definitive agreement are yet to be
negotiated and the letter of intent is not deemed to be a binding
agreement.
In addition to its targeted electric distribution acquisition
program, the Company also plans to strategically align itself with
local electric production and generation plants to supply low cost
electricity to the distribution companies, thereby lowering
transmission costs currently incurred in moving electricity from large,
remotely located central generating plants to the distribution
companies. As of the date hereof, the Company has not strategically
aligned itself with any plants and does not have adequate funds to
develop any plants. Further, there is no assurance that the Company
will ever develop or build any plants.
Because the Company's initial target is located in the Philippine
Islands, the Company intends to concentrate its efforts and programs in
the Philippine Islands.
OVERVIEW OF PHILIPPINE ELECTRIC GENERATION AND DISTRIBUTION
Electricity for Philippine distribution companies is typically
provided through high-voltage transmission wires from central electric
generation plants located throughout a particular region. Electricity
generated from these plants is often located many miles from the
distribution company, resulting in distribution losses from heat loss,
inefficiencies, and theft. Currently, all parts of the Philippine
system are regulated. However, to improve efficiencies and reduce
government subsidization of the electric industry, national legislation
is pending in the Philippine Islands that would deregulate parts of the
system, allowing distribution companies to be owned and operated by
non-regulated private and public companies. Specifically, the
generating plants would be sold to and operated by third parties.
Distribution companies would be privatized as well, leaving the
transmission lines partially regulated.
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PHILIPPINE ELECTRIC INDUSTRY
Currently, many electric distribution companies in the Philippine
Islands operate in rural areas. The government has funded development
of locally owned electric distribution networks to electrify isolated
communities. The government's goal is to have electricity available to
all citizens as soon as possible. To that end, the Philippine
government has legislation pending to privatize the local government
owned electric companies and to introduce new technologies and to
create more efficient and cost effective systems that will allow RECS
to continue to provide reliable electricity to citizens.
The Philippine government has called on RECS to form joint
ventures with foreign firms engaged in power development and to seek
nongovernment capital, expertise, and technology to reduce system
losses and fund system expansion. In the Philippine Islands, over 100
RECS supply 97% of the country's 1,500 municipalities. The Company
intends to initiate the acquisition of distribution companies as well
as to strategically align itself to smaller power generation plants in
order lower overall electric costs and provide more reliable and safe
electricity to regional customers.
According to the undated Philippine Energy Plan (1999-2004), the
country has 11,615 MW of installed, electric generating capacity, over
50% of which is owned by the state-owned National Power Corporation
(NPC). Oil-fired power plants provided 47% of the power generated while
hydro and geothermal plants provide 36%, and coal and gas-fired plants
provided the remaining 17%. From 1992 to 1996, electric utilization
increased 7% annually and is expected to increase 5.8% annually through
2010.
Currently, generation and transmission is owned and operated by
NPC, while retail distribution is provided by 17 investor-owned
utilities (IOU's), 119 rural electric cooperatives (RECs), and 4
municipal, city, and provincial distribution companies (MUNIs).
The Department of Energy (DOE) has overall responsibility for
Philippine industry policy, planning, coordination, and non-price
regulation. It assumes responsibility for (1) integrated power system
planning; (2) setting and enforcing performance standards for
independent power producers (IPPS), NPC and utility-owned generation;
and (3) facilitating and encouraging investment in the power sector.
The Energy Regulatory Board (ERB) is a government agency whose
primary goal is regulating the retail price of electricity. It has
jurisdiction over the IOUs, RECs, and MUNIs. The NPC is not under the
jurisdiction of ERB since the NPC rate is dictated by their contractual
obligation with various independent power producers (IPPs) which
account to about 50% of the total generation.
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CERTAIN FACTORS AFFECTING INDUSTRY
The Philippine electric distribution industry is highly capital
intensive and the industry is becoming increasingly more competitive on
a global basis. There are many competitors with more resources in
terms of qualified personnel and capital funds than the Company. There
can be no assurance that capital will be available to purchase the
targeted assets, nor might there be capital available to maintain the
assets. The Company is targeting international, Federal, and local
banks to provide acquisition and growth capital.
Each Philippine Island REC has a monopoly or franchise for a given
geographic area. REC electric prices are regulated and set by the ERB,
therefore there is no direct competition from other distribution
companies. However, distributed generation (electric generation on
site by a REC customer) can result in the loss of electric sales from
the REC. The distributed generation concept is just starting to take
hold in developed countries and currently is more expensive than buying
electricity from a local distribution company. Therefore, the Company
does not expect significant, if any, loss of revenues from this
potential competitive technology.
CONTRACTS, AGREEMENTS, AND UNDERSTANDINGS
The Company has entered into a non-binding memorandum of agreement
with ESI to purchase up to 90% of a partnership interest to be formed
between ESI and Cobato. ESI will own 90% of the partnership and
Cotabato will own 10% of the partnership. The partnership was formed
for the purpose of designing, building, owing and operating the Kabacan
8MW mini-hydro project. As of the date hereof, the partnership has not
been formed and there is no assurance the partnership will be formed in
the future. Further, the Kabacan mini-hydro project has not been
initiated and there is no assurance such project will ever be
initiated. The Multilateral Investment Guarantee Agency (MIGA) has
issued a preliminary guarantee for debt and equity totaling US$15
million. The Company plans to finalize the acquisition sometime in the
year 2000.
Benefits Associated with the Philippines
The operating and business environment in the power industry of
the Philippines has improved over the last few years and is expected to
improve in the near future. The Philippine government is in the process
of privatizing its power generation and distribution organizations to
attract private capital for operating, upgrading, and expanding its
power generators and grids. The government hopes that privatization
will result in new management teams that will bring in innovative ideas
learned from years of experience operating similar for-profit
companies. These innovative ideas are expected to increase motivation
of employees, improve morale, work attitudes, and standards while
increasing and expanding system reliability and service to electric
consumers at a lower cost.
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By privatizing the power industry, the government hopes to
reallocate its capital resources to those neglected sectors in greater
need of capital and human resources.
Risks Associated with Philippines
The financial crisis that has swept across southeast Asia over the
last two years has a forced its consumers to become cost conscious of
energy consumption. Business globalization has forced some
multinational companies to close offices and factories and to relocate
in locations where labor and raw materials are relatively inexpensive.
This has resulted in decreased revenues for power companies
including, the NPC. High incidence of power pilferage has also been
reported as a result of the foregoing.
The Company believes that the benefits described above far
outweigh the risks. There is no assurance, however, that one of the
aforementioned risks will not cause the demise of the Company.
Selection of Target Areas for Acquisition
REC's and private utilities selected for acquisition are those
that might benefit from professional management and that are Metro
Manila, a potential growth area.
Evaluation Techniques
The Company will use a customized acquisition plan for each REC.
For each REC acquisition, the approach will be similar, differing only
in that one REC is different than another.
In general, the Company will evaluate an acquisition candidate on
its cash flows and growth potential. Traditional corporate finance
valuation analysis, such as discounted cash flows and comparable
acquisitions, will be used in evaluating the cash flows and value of
each REC. The current customer penetration, past historical profit
growth rates, and potential future sales growth rates as well as the
ability of the REC management to continue that growth are, among other
things, are the key items to be evaluated by the Company in considering
and acquisition of a particular REC.
Market for Electricity
The market for electricity production and transmission in the
Philippine Islands is regulated. The overall market is mature and the
Company will receive uniform price throughout the Philippines, which is
approximately $0.072$/Kwhr.
As a means of quantitative comparison the following general
industry based electricity prices occurred in certain developed
countries during this period in accordance with information supplied by
Energy Information Administration:
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Country Average Price per/KWHR in US$
USA $ 0.084
United Kingdom $ 0.125
Philippines $ 0.072
Brazil $ 0.142
Japan $ 0.23
Government incentives available in the Philippines
Currently, there are no government incentives to encourage REC
privatization. However, the government has mandated and is encouraging
private companies to invest capital and form joint ventures with REC's
to increase reliability and expand service to its consumers.
Philippine Economy
The United States Department of Commerce has identified the
Philippines as one of the 10 "big emerging markets." The Philippines
economy is experiencing its fastest growth since 1989. New monetary
policies have resulted in two straight years of government surpluses
and a reduction in foreign debt. The government is committed to
eliminating its intervention in private business, and is instituting
important market reforms, including import and foreign exchange
liberalization, privatization, tax reform, and tariff restructuring.
These reforms are enhancing competition and aiding the development of
a capital markets industry.
The Philippines has an abundant English speaking workforce and
skilled electrical engineers well-versed in U.S. technical standards,
designs, and concepts.
Philippine Market Access
Beginning in 1991, the Philippines government launched several
important measures to attract foreign investment. The 1991 Foreign
Investment Act allows foreign equity in Filipino enterprises to exceed
40 percent as long as the company is not seeking investment incentives.
A minimum paid-up capital of $200,000 is required for an enterprise to
be more than 40 percent foreign-owned. Since 1992, the government has
enacted foreign exchange liberalization and lifted Central Bank
restrictions on peso borrowing for companies more that 40 percent
foreign-owned. There are no restrictions on repatriation of capital and
profits. In 1995, the country officially joined the ranks of "Article
VIII" International Monetary Fund members, indicating it is committed
to an open and liberal foreign exchange and payments regime. Tariffs
are being reduced on most industrial goods and the government plans to
move toward a uniform tariff rate of five percent by 2004.
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The Philippines is a member of the World Trade Organization (WTO)
and the Association of Southeast Asian Nations (ASEAN).
Philippine Energy Resources
The Philippine Islands are rich in fossil fuel and renewable
energy resources, but lacks the financial resources with which to
develop them. The country relies on oil imports - seven percent of
total imports - for its energy needs. Currently, oil comprises 50
percent of installed capacity, hydro 30 percent, geothermal 14 percent,
and coal 6 percent. The remainder comes from independent power
producers under build-operate-transfer arrangements. (The Build-
Operate-Transfer Law of 1990 permits private power generation).
Estimates show energy demand growing by 11.2 percent through 2005,
necessitating 65,712 MW of additional capacity over the next 30 years.
New regulations and restructuring of the energy sector is creating an
environment more conducive to private power development and IPPs are
expected to play a major role in future market development. The private
sector could eventually generate up to 60 percent of output.
Philippine Electricity
The Philippines government is focusing on reducing oil imports for
electricity generation and restructuring the power sector. The
reliability of power supply remains a problem for much of the country,
including Manila. At present, 65 percent of the country is electrified,
but the Philippine Energy Plan anticipates increasing this rate to 96
percent by 2000.
Although its monopoly over power generation ended in 1995, the
National Power Corporation (NPC), a state-owned utility, controls 79
percent of installed capacity. NPC sells electric power to private
utilities, local governments, rural electric cooperatives, and
industrial customers. It maintains a monopoly over transmission
activities, but distribution is managed by local governments, utilities
and cooperatives. The Manila Electric Rail and Light Company (MERALCO),
a private utility, controls over half of the national power
distribution market. The Cagayan Electric Power and Light Company
(CEPALCO) controls power distribution for the Cagayan region in
Mindanao. NPC is in the process of privatizing power generation
facilities into 14 subsidiaries. The Omnibus Electric Power Industry
Bill currently under consideration by the Philippines Congress will
open the power industry to greater competition.
Major government institutions involved in the Philippines energy
sector are the National Economic Development Authority (NEDA), the
Department of Energy (DOE), the Electricity Regulatory Board (ERB), and
the Philippines National Oil Company-Economic Development Authority.
The NEA oversees power distribution and is primarily responsible for
executing rural electrification programs on an area-coverage basis
through 119 rural electric cooperatives, 17 privately-owned electric
utilities, and eight local government-owned electric utilities. NEDA
evaluates and approves power and energy development projects. The ERB
is responsible for tariff-setting.
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Energy Efficiency and Conservation
Chronic power shortages and brownouts since the early 1990s have
cost the Philippines economy several billion dollars per year. In spite
of this, energy conservation has not gained wide acceptance and has had
little impact on significantly reducing energy consumption. This
situation can be attributed mainly to inadequate energy conservation
campaigns, energy tariffs that are too low to encourage efficiency, and
a lack of incentives for promoting efficient energy use.
As a result, the Department of Energy has launched a major
national energy conservation program, including education and training,
industrial energy audits, technical and financial assistance, and
promotion of energy efficient technologies. It has also ordered all
utilities to develop demand-side management plans. The DSM program will
include approximately 25-50 industrial pilot projects. Additionally,
MERALCO is working with the U.S. Agency for International Development
to design a voluntary program targeted at shopping malls with large
electricity loads in the metro Manila area. Efficiency measures will
include commercial air conditioning equipment, commercial control
systems, energy services and energy consulting, high-efficiency motors
and compressors, and cogeneration systems and design services.
Bahamian Government Regulation
The International Business Companies Act, 1989, as amended is the
main body of law governing international business companies in the
Bahamas, such as the Company. The foregoing legislation covers matters
such as directors' duties and responsibilities, preparation of
accounts, auditor control, issue and transfer of shares, control of
shareholders; meetings, rights of minority interest, amendments to
capital structure, preparation and filing of public documents.
The Securities Industry Act, 1999, governs the offer or sale of
securities in the Commonwealth of The Bahamas. Pursuant to Section 62
of the Securities Industry Act, 1999 of the Commonwealth of The
Bahamas, the Company is deemed a "private company" as it has limited
its beneficial ownership base to no more than 50 persons and has
prohibited the offer of its shares to the public for subscriptions.
Management and Employees
The Company is a development stage company and currently has no
employees other than its Officers and Directors. The Company intends
to hire additional employees as needed. The Company intends to require
all of its officers, directors and other key employees to enter into
non-competition agreements with terms of eighteen months to three years
after termination of employment with the Company. There can be no
assurance, however, that these agreements will provide meaningful
protection for the Company's proprietary know-how or technology or
adequate remedies in case of breach. No employment contracts have been
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executed by Mr. Atkinson, Mr. Riser, Mr. Darville or Ms. Green and
there is not assurance that said persons will ever enter into
employment agreements wit the Company.
Company's Offices
The Company's offices are located at Brigadon House, P. O. Box
EE17736, Nassau, Commonwealth of The Bahamas, and the telephone number
is 242-324-3555. The Company leases its office space from ESI.
Risk Factors Associated with the Company
1. Company No History of Earnings. The Company has no operating
history and is subject to all of the risks inherent in a developing
business enterprise including lack of cash flow and service acceptance.
2. Development and Market Acceptance of Services. The Company's
success and growth will depend upon the Company's ability to acquire
rural electric companies and market its services. The Company's
success will depend in part upon the market's acceptance of, and the
Company's ability to deliver and support its electric services.
3. Liquidity; Need for Additional Financing. The Company
believes that it does not have the cash it needs for at least the next
twelve months based upon its internally prepared budget. Further, the
Company's cash requirements are not easily predictable and there is a
possibility that its budget estimates will prove to be inaccurate. If
the Company is unable to generate a positive cash flow, it will be
required to curtail operations substantially and seek additional
capital. There is no assurance that the Company will be able to obtain
additional capital if required, or if capital is available, to obtain
it on terms favorable to the Company. The Company may suffer from a
lack of liquidity in the future which could impair its short-term
marketing and sales efforts and adversely affect its results of
operations.
4. Foreign Operations Risks. The Company's principal business
operations will be located on the Philippine Islands. The Company will
be subject to Philippine taxation, business licensing and other areas
may be different from those typically encountered in the United States
or Bahamas. Although management intends to ensure that all
agreements, permits, licenses and/or regulatory approvals are
adequately addressed and followed, there can be no assurance that the
regulatory climate in the future in Philippines will not change in a
materially negative way for the Company.
5. Competition. Most of the Company's competitors have
substantially greater financial, technical and marketing resources than
the Company. In addition, the Company's services compete indirectly
with all other forms of energy delivery.
6. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officers and Directors, who exercise control over the day to day
affairs of the Company.
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7. Issuance of Additional Shares. The Company is authorized to
issue 100,000,000 ordinary shares. 3,000,000 ordinary shares are
currently issued and outstanding. 97,000,000 or 97% of the 100,000,000
ordinary shares are unissued. The Board of Directors has the power to
issue such shares. Although the Company presently has no commitments
or contracts to issue any additional shares to other persons. The
Company may in the future attempt to issue shares to acquire products,
equipment or properties, or for other corporate purposes. Any
additional issuance by the Company, from its authorized but unissued
shares, would have the effect of diluting the interest of existing
shareholders.
8. Indemnification of Officers and Directors for Securities
Liabilities. The laws of the Commonwealth of The Bahamas provides that
the Company could indemnify any Director, Officer, agent and/or
employee as to those liabilities and on those terms and conditions as
are specified in the International Business Companies Act, as amended,
of the Commonwealth of The Bahamas. Further, the Company may purchase
and maintain insurance on behalf of any such persons whether or not the
corporation would have the power to indemnify such person against the
liability insured against. The foregoing could result in substantial
expenditures by the Company and prevent any recovery from such
Officers, Directors, agents and employees for losses incurred by the
Company as a result of their actions. Further, the Company has been
advised that in the opinion of the Securities and Exchange Commission,
indemnification is against public policy as expressed in the Securities
Act of 1933, as amended, and is, therefore, unenforceable.
9. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
Shareholders may be further diluted in their percentage ownership of
the Company in the event additional shares are issued by the Company in
the future. Cumulative voting in the election of Directors is not
provided for. Accordingly, the holders of a majority of the shares of
Common Stock, present in person or by proxy, will be able to elect all
of the Company's Board of Directors.
10. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors.
ITEM 2. DESCRIPTION OF PROPERTY.
Currently the Company does not own any property. The Company's
offices are located at Brigadoon House, P. O. Box EE17736, Nassau,
Bahamas The Company leases the foregoing offices from ESI owned and
controlled by David Atkinson, the Company's President, pursuant to the
terms of a written lease agreement. The term of the lease is monthly
with monthly rental payments of $2,500 per month. The term of the
lease is from month-to-month.
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ITEM 3. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its knowledge,
no action, suit or proceedings against it has been threatened by any
person.
ITEM 4. CONTROL OF REGISTRANT.
Principal Shareholders
The Company's is not owned or controlled, directly or indirectly,
by another corporation or by any foreign government and there are no
agreements in place which could result in a change of control of the
Company.
The following table sets forth the Ordinary Share ownership of
each person known by the Company to be the beneficial owner of five
percent or more of the Company's Ordinary Shares, each director
individually and all officers and directors of the Company as a group.
Each person has sole voting and investment power with respect to the
shares of Ordinary Shares shown, and all ownership is of record and
beneficial.
Name and address Number of Percent
of owner Shares Position of Class
David E. Atkinson 750,000 President, Chief Executive 25.00%
#17 Eastern Road Officer and Chairman
Nassau, Bahamas
Robert C. Darville 0 Secretary, Treasurer 0.00%
#10 Seafan Drive Chief Financial Officer and
Sea Breeze Estates Director
Nassau, Bahamas
Joanta H. Green 50,000 Director 1.67%
338 Sausalito Blvd.
Sausalito, CA 94965
Mark Riser 150,000 Vice President 5.00%
51 Longview Drive
Rkidgefield, CT 06877
All officers and 950,000 31.67%
directors as a Group
(4 Persons)
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ITEM 5. NATURE OF TRADING MARKET.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if developed,
that it will be sustainable. A shareholder in all likelihood,
therefore, will be unable to resell the securities referred to herein
should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept the Company's securities as pledged
collateral for loans unless a regular trading market develops.
There are no plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market in any of
the Company's securities. On January 4, 1999, the NASD amended its
rules regarding listing of securities for trading on the Bulletin Board
which it operates. Effective January 4, 1999, securities of
corporations will not be listed for trading on the Bulletin Board
unless the corporation files reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934. Accordingly, the Company's common
stock will not be listed for trading on the Bulletin Board until such
time as this registration statement is declared effective by operation
of law and the Company has satisfied all outstanding comments issued by
the Securities and Exchange Commission.
As of August 1, 2000, the Company had 42 holders of record of its
Ordinary Shares. Currently, there are two U.S. shareholders of the
Company's Ordinary Shares.
The Company has not paid any dividends since it is inception and
does not anticipate paying any dividends on its Ordinary Shares in the
foreseeable future.
ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING
SECURITY HOLDERS.
There are no exchange controls or other limitations which effect
security holders other than the shares of common stock issued to Mr.
Riser and Ms. Green are "restricted securities" as that term is defined
in Reg. 144 of the Securities Act of 1933 (the "Act") and may only be
resold in compliance with Reg. 144 of the Act.
In general, under Reg. 144, an affiliate of the Company (officers,
directors, and owners of more than ten percent (10%) of the outstanding
shares of Common Stock are affiliates of the Company) may sell in
ordinary market transactions through a broker or with a market maker,
within any three (3) month period a number of shares which does not
exceed the greater of one percent (1%) of the number of outstanding
shares of Common Stock or the average of the weekly trading volume of
the Common Stock during the four calendar weeks prior to such sale.
Sales under Reg. 144 require the filing of Form 144 with the Securities
and Exchange Commission. If the shares of Common Stock have been held
for more than two (2) years by a person who is not an affiliate, there
is no limitation on the manner of sale or the volume of shares that may
be sold and no Form 144 is required. Sales under Reg. 144 may have a
depressive effect on the market price of the Company's Common Stock.
<PAGE> 15
ITEM 7. TAXATION.
The following discussion summarizes certain US federal and
Bahamian tax consequences of the ownership of Shares by a person ("US
Portfolio Stockholder") that: (i) is a citizen or resident of the US,
a US corporation or that otherwise will be subject to US federal income
tax on a net income basis in respect of the Shares; (ii) is not deemed
a resident of Commonwealth of The Bahamas for exchange control purposes
by the Central Bank of the Commonwealth of The Bahamas; (iii) has not,
within the preceding five years, beneficially owned 10% of the issued
capital or voting stock in the Company; and, (iv) has not used the
Shares in carrying on a trade or business, wholly or partly through a
permanent establishment in Commonwealth of The Bahamas.
The statements regarding US and Bahamian tax laws set forth herein
are based on those laws as in force on the date of this document that
may affect the tax consequence described herein (some of which may have
retroactive effect). This summary is not exhaustive of all possible
tax consideration and investors are advised to satisfy themselves as to
the overall tax consequences, including specifically the consequences
under US, state, local and other laws, of the acquisition, ownership
and disposition of Shares by consulting their own tax advisers.
Taxation of Gains on Sale
A US Portfolio Stockholder is not subject to Bahamian income tax
on the sale of its Ordinary Shares in the Company.
Passive Foreign Investment Company Status
A foreign corporation is classified as a passive foreign
investment company (a "PFIC") in any taxable year in which, after
taking into account the income and assets of certain subsidiaries
pursuant to the applicable US Internal Revenue Code "look-through"
rules, either (i) at least 75% of its gross income is passive income,
or (ii) at least 50% of the average value of its assets is attributable
to assets that produce passive income from cash holdings and profits
from the sale of marketable securities, even if derived from an active
business.
If the Company were a PFIC during any year in which a US Portfolio
Stockholder owned Shares, that US Portfolio Stockholder would be
subject to additional taxes on any gain realized from the sale or any
other disposition of the Shares, or any excess distribution received
from the Company.
A US Portfolio Stockholder will have an excess distribution to the
extent that distributions on Shares during a taxable year exceeded 125%
of the average amount received during the three preceding taxable years
(or, if shorter, the US Portfolio Stockholders' holding period for the
Shares). To compute the tax on gain or on an excess distribution, (i)
the excess distribution or the gain is allocated ratably over the US
<PAGE> 16
Portfolio Stockholder's holding period for the Shares, (ii) the amount
allocated to the current taxable year at the highest applicable
marginal rate in effect for each year and an interest charge is imposed
to recover the deemed benefit from the deferred payment of the tax
attributable to each year.
If the Company is a PFIC, US persons that own an interest in
another entity that owns shares in the Company may be treated as
indirect holders of their proportionate share of that entity's Shares,
and may be taxed on their proportional share of any gain or excess
distribution from that entity attributable to the entity's in the
Company. A US person that owns an interest in the entity that is an
actual holder of Shares will be treated as an indirect holder if (i)
the actual holder is itself a PFIC, (ii) the actual holder is a foreign
corporation other than a PFIC in which the US person who owns an
interest in the actual holder owns (directly or indirectly) at least
50% in value of the actual holder's shares, or (iii) the actual holder
is a partnership, trust or estate in which the US Portfolio Stockholder
is a partner or beneficiary. An indirect holder must take into income
its portion of any excess distribution received by the actual holder or
any gain recognized by the actual holder on the Shares. An indirect
holder also must treat an appropriate portion of its gain on the sale
or disproportion of its interest in the actual holder as gain on the
sale of the Shares. If the Company were a PFIC, a US Portfolio
Stockholder of Shares would generally be subject to similar rules with
respect to distribution by, and dispositions of the shares of, any
direct or indirect subsidiaries of the Company that were PFICs.
The Internal Revenue Code provides each US stockholder in an PFIC
with an election whereby the additional US tax burden imposed on gain
on sale of PFIC stock and receipt of excess distributions from a PFIC,
as described above, can be avoided. This election generally requires
that the PFIC stockholder include in its income, its pro-rata share of
the PFIC's distributed and undistributed income, as computed under US
tax accounting principles, on an current basis. In certain cases, a
further election is available to an electing PFIC stockholder to defer
the tax payable with respect to the stockholder's pro-rata share of the
PFIC's undistributed income, although in this case interest applies on
the deferred tax. Thus, even if the first or both of these elections
are made, a US stockholder of a PFIC loses the tax benefit, which is
available with respect to investment in a non-PFIC corporation, of
deferring and converting to capital gain the investor's personal US tax
liability with respect to the Company's undistributed income. These
elections also generally require that the PFIC annually provide the
electing PFIC shareholder, for inspecting by the Internal Revenue
Service, an analysis of the PFIC's income computed under US tax
accounting principals. The Company does not intend to furnish any US
Portfolio Stockholder with the information that it would need in order
to avoid the PFIC tax treatment described by electing to include its
share of the Company's income on a current basis. There, these
election will not be available to the Company's US Portfolio
Stockholders.
<PAGE> 17
There are other adverse US tax rules associated with holding
Shares in a company that has been a PFIC during any part of a US
Portfolio Stockholders holding period. These include a denial of a
step-up in a tax basis on the death of a US individual stockholder, and
burdensome reporting requirements.
If the Company ceases to be a PFIC, a US Portfolio Stockholder may
avoid the contained application of the tax treatment described above by
electing to be treated as if it sold its Shares on the last day of the
last taxable year in which the Company was a PFIC. Any gain is
recognized and subjected to tax under the rules described above. Loss
is not recognized. The US Portfolio Stockholder's basis in the Shares
is increased by the amount of gain recognized on the deemed sale. This
election is not available to a US Portfolio Stockholder that previously
elected to include its share of the Company's income on a current
basis. The US Congress recently has considered legislation that would
alter the PFIC rules substantially. Prospective investors should
consult their own tax advisors as to the potential application of the
PFIC rules, as well as, the impact of any proposed legislation that
could affect them.
The Company has generated sufficient income and assets during 1995
and 1996 not to be deemed a PFIC.
Taxation of Dividends.
The Company does not expect to pay cash dividends for the
foreseeable future, but, rather, to retain earnings to finance
expansion of the business. Should the Company begin paying dividends,
however, the Company's dividends to its US Portfolio Stockholders would
be exempt from Bahamian tax. The overall limitation on non-US taxes
eligible for US credit is calculated separately with respect to
specific classes, or "baskets" of income. For this purpose, dividends
distributed by the Company will generally constitute "passive income"
or, in the case of certain US Portfolio Stockholder, "financial service
income." The US tax credits allowable with respect to each income
basket cannot exceed the US federal income tax payable with respect to
such income. The consequences of the separate limitation calculation
will depend on the nature and sources of each US Portfolio
Stockholder's income and the deductions allocable thereto.
Distributions on the Shares will constitute dividends for US
Federal income tax purposes to the extent paid out of current or
accumulated earnings and profits of the Company, as determined for US
federal income tax purposes. If the Company pays a dividend, such
dividend would likely be paid in U.S. dollars. The amount of dividend
income for a US Portfolio Stockholder will be the US dollar value of
the dividend income for a US Portfolio Stockholder will be the US
dollar value of the dividend payment on the date of receipt, even if
the dividend is not converted into US dollars. Dividends paid by the
Company will not be eligible for the "inter-corporate dividends
received" deduction allowed to US corporations.
<PAGE> 18
Estate and Gift Tax
The Commonwealth of The Bahamas does not impose any estate,
inheritance or gift taxes. Therefore, no Bahamian estate tax,
inheritance tax or gift tax will be imposed on the death or upon a
lifetime gift by, a US Portfolio Stockholder.
ITEM 8. SELECTED FINANCIAL DATA.
Selected Consolidated Financial Data
The selected historical data presented below has been derived from
the financial statements of the Company, which financial statements
have been examined by Ronald Atkinson & Co., Chartered Accountants for
the Company and are included elsewhere herein for the fiscal years
ended December 31, 1998 and 1999.
The financial statements are presented in U.S. dollars and have
been prepared in accordance with U.S. GAAP.
The following table summarized certain financial information and
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The
Company has not declared a dividend during each of the fiscal years
ended December 31, 1998, or 1999. There were no fluctuations in
revenues and net income (loss) between the fiscal years stated in the
table below since the Company was inoperative. Please refer to Item 9.
Management's Discussion and Analysis of Financial Condition and Results
of Operations - Results of Operations. For the reasons set forth
herein the information shown below may not be indicative of the
Company's future results of operation.
Statement of Loss and Accumulate Deficit Data:
In US Dollars
1997 1998 1999
Income Statement Data:
Total revenue 0 0 0
Interest expense 0 0 0
Net income (loss) 0 0 (60,664)
Net income (loss) per
ordinary share (dollars)
Balance Sheet Data:
Total assets 0 5,000 112,480
Net working capital
(deficit) 0 0 (60,664)
Shareholders' equity 0 5,000 150,000
All amounts are calculated in accordance with U.S. GAAP.
<PAGE> 19
ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has not made sales of
additional securities and there is no assurance that it will be able to
raise additional capital through the sale of securities in the future.
Further, the Company has not initiated any negotiations for loans to
the Company and there is no assurance that the Company will be able to
raise additional capital in the future through loans. In the event
that the Company is unable to raise additional capital, it may have to
suspend or cease operations.
The Company does not intend to conduct any research or development
of its services during the next twelve months other than as described
herein.
The Company does not intend to purchase a plant or significant
equipment, however, the Company does intend to acquire an interest in
other corporations that do own substantial assets.
The Company will hire employees on an as needed basis, however,
the Company does not expect any significant changes in the number of
employees.
The Company expects to earn revenues in the fourth quarter of
2000. There is no assurance, however, that the Company will earn said
revenues as planned.
Inflationary and Other Economic Pressures
The Company is not currently generating revenues from sale of
electricity. Future revenues in this segment are governed primarily by
worldwide commodity pricing. No immediate effect in respect to
inflation and changes on prices is realized. However inflationary
pressures effect the Company's development expenditure. The directors
estimation of inflation is considered in regards to the general state
of the world economy of the Philippines in particular. This exposure
to inflationary pressure is dependent on the mix of goods and services
provided to the Company by suppliers, source internally in Philippines
and externally. At this stage the Company is unable to quantify the
mix of inflationary pressures from different sources that will effect
the supply of goods and services to the Company.
<PAGE> 20
Government Policies
The Company has considered the issued of political risk in the
Philippines in which the Company is acquiring assets and will continue
to do so as a matter of normal business practice. The Company's
expects the initial energy acquisitions will be located in the
Philippine Islands and there has been a long established energy
industry, with significant elements of foreign capital investments and
no history of expropriation.
The Philippine Islands is a separate national state and like many
other national states regulates controls and taxes activities conducted
by residents and non-residents in the county and the flow of investment
into the country and the return of capital out of the country. All of
these controls and regulations are subject to change from time to time.
Some of the interests of the Company are subject to the laws of the
Philippine Islands. These contracts are subject to controls and
regulations by the contracting parties and by the government of the
Philippine Islands. These factors, in addition to the usual risks and
the economic and political stability of the host country, Philippine
Islands must all be taken into account in relation to the Company's
operations in the Philippine Islands.
Other than the effect of the Philippine Islands Economic Fiscal
Monetary or Political Policies or Factors upon the operations of the
Company these policies or factors do not effect investments by United
States Nationals in Ordinary Shares of the Company.
ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT.
Officers and Directors
The officers and directors of the Company are as follows:
Name Age Position
David E. Atkinson 32 Chairman, President, Chief
Executive Officer and Director
Robert C. Darville 39 Secretary, Treasurer, Chief
Financial Officer and Director
Joanta H. Green 40 Director
Mark Riser 37 Vice President
All directors hold office until the next annual meeting of
shareholders and until their successors have been elected and
qualified. The Company's officers are elected by the Board of
Directors at the annual meeting after each annual meeting of the
Company's shareholders and hold office until their death, or until they
resign or have been removed from office.
<PAGE> 21
David E. Atkinson, President, Chief Executive Officer and a member of
the Board of Directors.
Since September 8, 1995, Mr. Atkinson has been President, Chief
Executive Officer and a member of the Board of Directors of the
Company. From 1988 to 1995, Mr. Atkinson was the President of
Electrical Systems Inc. Electrical Systems Inc. was engaged in
designing, financing, owning, operating and constructing power
facilities in Canada. Since 1995, Mr. Atkinson has been the President
and Chief Executive Officer of ESI E&C Inc. which is located in Nassau,
Bahamas. ESI E&C is a global designer and constructor of medium sized
water, power and infrastructure projects in developing countries.
Since July 26, 2000, Mr. Atkinson has been the Chief Executive Officer
and director of Bargold Resources Ltd. Bargold is engaged in the
business of oil and gas exploration and mining.
Robert C. Darville - Secretary, Treasurer, Chief Financial Officer and
Member of the Board of Directors.
Since December 9, 1999, Mr. Darville has been Secretary,
Treasurer, Chief Financial Officer and a member of the Board of
Directors. Since 1991, Mr. Darville has been President and Chief
Executive Officer of Darville Packaging Ltd. which is located in
Nassau, Bahamas. Darville Packaging is engaged in the business of
custom printing of paper and plastic bags, boxes, labels, promotional
items, computer forms, giftware and industrial packaging supplies.
Joanta H. Green - Member of the Board of Directors
Since December 9, 1999, Ms. Green has been a member of the Board
of Directors. Since September 1995, Ms. Green has operated J.H. Green
Enterprises, as a sole proprietorship. J.H. Green Enterprises is
located in Sausalito, California and is engaged in the business of
energy consulting and provides institutional training, project and
proposal development, evaluation and implementation, business
development assistance and market studies. She is an electrical
engineer with a background in energy generation, and the rational use
of energy for the commercial, industrial and residential sectors. She
has undertaken projects including planning, design, procurement,
installation, operation and financing. She has authored and been a
contributing author to several books and papers on electrical power
industry outlook, renewable energy systems, the rational use of energy,
energy sector restructuring and development, and energy markets, all of
which on both domestic and international issues. She has managed and
participated in energy projects in the Philippines, Indonesia,
Malaysia, Vietnam, Thailand, Kenya, Brazil, Germany, Austria, the U.K.,
and the United States.
<PAGE> 22
Mark Riser - Vice President
Since December 9, 1999, Mr. Riser has been Vice President of the
Company. From 1996 to 1999, Mr. Riser was the Mergers and Acquisitions
Manager for Trigen Energy Corporation, a subsidiary of Suez Lyonnaise
des Seaux. Trigen Energy Corporation is the leading thermal science
company in North America, Trigen develops, owns and operates commercial
and industrial energy systems. From 1995 to 1996, Mr. Riser was
Portfolio Manager of International Paper Company. From 1994 to 1995,
Mr. Riser was Senior Financial Analyst for Capital Budgets of Memphis
Tennessee. Mr. Riser holds the degree of Masters of Business
Administration from the University of Virginia.
ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.
Summary Compensation.
The following table sets forth the compensation paid by the
Company from inception through September 30, 1999, for each officer and
director of the Company. This information includes the dollar value of
base salaries, bonus awards and number of stock options granted, and
certain other compensation, if any.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Securities
Names Other Under Restricted Other
Executive Annual Options/ Shares or Annual
Officer and Compen- SARs[1] Restricted LTIP[2] Compen-
Principal Year Salary Bonus sation Granted Share Payouts sation
Position Ended (US$) (US$) (US$) (#) Units (US$) (US$) (US$)
David E. 1999 0 0 0 0 0 0 0
Atkinson 1998 0 0 0 0 0 0 0
President 1997 0 0 0 0 0 0 0
Robert C. 1999 0 0 0 0 0 0 0
Darville 1998 0 0 0 0 0 0 0
Secretary 1997 0 0 0 0 0 0 0
Joanta H. 1999 0 0 0 0 0 0 0
Green 1998 0 0 0 0 0 0 0
Director 1997 0 0 0 0 0 0 0
Mark Riser 1999 0 0 0 0 0 0 0
Secretary 1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
The Company anticipates paying the following salaries in 2000,
subject to the Company beginning profitable operations and generating
sufficient revenues to pay the same:
David E. Atkinson President 2000 $10,000
Robert C. Darville Secretary & Treasurer 2000 $ 0
Mark Riser Vice President 2000 $ 0
The Company has adopted a non-qualified incentive stock option
plan, however, no options have granted as of the date hereof. There
are no other stock option plans, retirement, pension, or profit sharing
plans for the benefit of the Company's officers and directors other
than as described herein.
<PAGE> 23
Stock Option Plans and Long-Term Incentive Plan Awards.
The Company does not have any stock option plans or long-term
incentive plans that provide compensation intended to serve as
incentive for performance.
Compensation of Directors.
Directors do not receive any compensation for serving as members
of the Board of Directors. The Board has not implemented a plan to
award options to any Directors. There are no contractual arrangements
with any member of the Board of Directors.
ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR
SUBSIDIARIES.
None.
ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.
In December 1999 the Company issued 950,000 ordinary shares to the
Company's officers and directors in consideration of $47,500.
On December 13, 1997, the Company entered into a letter of intent
with ESI to acquire a 90% interest in a partnership to be formed by ESI
and Cotabato. ESI is entirely owned and controlled by David Atkinson,
the Company's President. The partnership to be formed will consist of
ESI and Cotabato. ESI will own 90% of the partnership and Cotabato
will own 10% of the partnership. The partnership was formed for the
purpose of designing, building, owing and operating the Kabacan 8MW
mini-hydro project. As of the date hereof, the partnership has not
been formed and there is no assurance the partnership will be formed in
the future. Further, the Kabacan mini-hydro project has not been
initiated and there is no assurance such project will ever be
initiated.
There are no additional interests of management in transactions
involving the Company except for those stated in Item 17 - Notes to the
Financial Statements.
ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Ordinary Shares
The authorized Ordinary Shares of the Company consists of
100,000,000 Ordinary Shares. All shares have equal voting rights and
are not assessable. Voting rights are not cumulative and, therefore,
the holders of more than 50% of the Ordinary Shares could, if they
chose to do so, elect all of the directors of the Company.
<PAGE> 24
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Ordinary Shares. The
holders of the Ordinary Shares do not have preemptive rights to
subscribe for any securities of the Company and have no right to
require the Company to redeem or purchase their shares. The Ordinary
Shares presently outstanding are fully paid and nonassessable.
Dividends
Holders of the Ordinary Shares are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Ordinary Shares since inception, and none is
contemplated in the foreseeable future.
Transfer Agent
Pacific Stock Transfer Company
5844 Pecos Road
Suite D
Las Vegas, Nevada 89193
Tel: (702) 361-3033
PART III
ITEM 15. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
SECURITIES.
None.
PART IV
ITEM 17. FINANCIAL STATEMENTS.
Contents
Page
Auditor Report . . . . . . . . . 1
Balance Sheet . . . . . . . . . 2
Statement of Loss and Deficit . . . . . . 3
Statement of Cash Flows . . . . . . . 4
Notes to the Financial Statements . . . . . 5
<PAGE> 25
Ronald Atkinson & Co.
Chartered Accounants
P. O. Box N 8326
Nassau, Bahamas
Tel: 242 325 7355
Fax: 242 326 5602
e-mail: [email protected]
AUDITOR'S REPORT
The Shareholders
Irutil Co. Inc.
Nassau, Bahamas
We have audited the accompanying balance sheets of Irutil Co. Inc. as
at 31st December 1999 and 1998 and the related statements of loss,
deficit and cash flows for the year ended 31st December 1999 and for
the period from date of incorporation (8th September 1995) to 31st
December 1998. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those Standards require that we plan and perform an audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the company as at 31st
December 1999 and 1998 and the results of its operations and its cash
flows for the year and period then ended in conformity with generally
accepted accounting principles.
5th June 2000 /s/ Ronald Atkinson & Co.
Nassau, Bahamas Chartered Accountants
-1-
<PAGE> 26
IRUTIL CO. INC.
(Incorporated under the laws of The Commonwealth of The Bahamas)
BALANCE SHEET AS AT 31ST DECEMBER 1999
(Stated in United States dollars)
31st
December
1998
ASSETS
Current Asset:
Cash in bank (Note 2) 112,480 -
Amount due from shareholder (Note 3) - 5,000
----------- ---------
US$ 112,480 US$ 5,000
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Account payable 1,500 -
Amount due to shareholder (Note 3) 21,644 -
----------- ---------
23,144 -
Shareholders' Equity:
Share capital (Note 4)
Authorized: 100,000,000
shares of US$0.05 each
US$5,000,000
============
Issued and fully paid
3,000,000 shares 150,000 5,000
Deficit (60,664) -
--------- ----------- ---------
89,336 5,000
----------- ---------
US$ 112,480 US$ 5,000
=========== =========
The notes on page 5 are an integral part
of these financial statements.
-2-
<PAGE> 27
IRUTIL CO. INC.
STATEMENT OF LOSS AND DEFICIT FOR THE
YEAR ENDED 31ST DECEMBER 1999
Period from
date of Incorporation
(8th September 1995)
to 31st December 1998
EXPENSE
Salary 30,000 -
Administration 7,500 -
Professional fees 23,144 -
Bank charges 20 -
---------- ------
Net loss for the period (60,664) -
RETAINED EARNINGS,
at beginning of period - -
---------- ------
DEFICIT AT 31ST DECEMBER 1999 US$(60,664) US$ -
========== ======
The notes on page 5 are an integral part
of these financial statements.
-3-
<PAGE> 28
IRUTIL CO. INC.
STATEMENT OF CASH FLOWS FOR THE
PERIOD FROM DATE OF INCORPORATION
(8TH SEPTEMBER 1995) TO 31ST DECEMBER 1999
Period from
date of Incorporation
(8th September 1995)
to 31st December 1998
CASH FLOW FROM OPERATING
ACTIVITIES:
Net (loss) for the period (60,664) -
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Account payable 1,500 -
Amount due to a shareholder 21,644 -
----------- -------
(37,520) -
CASH FLOW FROM FINANCING
ACTIVITIES:
Share capital issued 150,000 -
----------- -------
Cash and cash equivalents
at 31st December 1999 US$ 112,480 US$ -
=========== =======
The notes on page 5 are an integral part
of these financial statements.
-4-
<PAGE> 29
IRUTIL CO. INC.
NOTES TO FINANCIAL STATEMENTS
31ST DECEMBER 1999
1. General information and significant accounting policies.
General information -
The company was incorporated under the laws of The Commonwealth of
The Bahamas on 8th September 1995 as The Southern Energy Co. Inc.,
and subsequently on the 5th of July 1999, changed its name to
Irutil Co. Inc. The company proposes to acquire, develop and
operate rural utilities, but, notwithstanding its 8th September
1995 incorporation date, did not actually commence its preliminary
operations until October 1999.
Significant accounting policies -
The company maintains its books in United States dollars. At the
year-end, assets and liabilities in currencies other than United
States dollars have been translated into United States dollars at
the applicable year-end rates. During the year, income and
expense transactions in currencies other than United States
dollars have been translated at the respective rates prevailing on
the transaction dates.
2. Cash in bank of US$112,480 is held in a current demand account and
does not earn interest.
3. Amount due from shareholder (1998) of US$5,000 and amount to
shareholder (1999) of US$21,644 are interest free, have no
specific repayment programmes and were used for the reimbursement
of professional fees paid (1999) and share capital issued (1998).
4. On December 9th, 1999 the authorized share capital was increased
from 5,000 Ordinary voting shares of par value US$1.00 each to
100,000,000 Ordinary voting shares of par value US$0.05 each, for
a total authorized share capital of US$5,000,000.
Issued share capital was 5,000 shares of US$1.00 each, totaling
US$5,000 upto December 9th, 1999 at which date the issued and
fully paid share capital was increased to 3,000,000 shares of
US$0.05 each, totaling US$150,000.
In accordance with the Articles of Incorporation, the company is
deemed to be a private company and its members are limited to no
more than fifty beneficial owners.
5. There are no contingent liabilities or capital commitments as at
31st December 1999.
-5-
<PAGE> 30
ITEM 18. FINANCIAL STATEMENTS.
Not applicable. Consolidated financial statements are provided
under Item 17.
ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS.
A. Financial Statements of Registrant.
Contents
Auditor Report.
Balance Sheet.
Statement of Loss and Deficit.
Statement of Cash Flows.
Notes to Financial Statements.
B. Exhibits.
Document
Number Description
3.1 Articles of Association of The Southern Energy Co. Inc.
3.2 Amendment to Articles of Association
10.1 Letter of Intent between ESI E&C and the Company
10.2 Memorandum of Agreement between ESI and Cotabato Electric
Cooperative Inc.
27.1 Financial Data Schedule.
All other schedules and exhibits are omitted, as the required
information is not applicable or is not present in amount sufficient to
require submission of the schedule or because the information required
is included in the financial statements and notes hereto.
<PAGE> 31
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant certifies that it meets all of the
requirements for filing on Form 20-F and has duly caused to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated this 8th day of August, 2000.
Irutil Co., Inc.
BY: /s/ David Atkinson
David Atkinson, President
KNOW ALL MEN BY THESE PRESENT, that each person whose signature
appears below constitutes and appoints David Atkinson, as true and
lawful attorney-in-fact and agent, with full power of substitution, for
his and in his name, place and stead, in any and all capacities, to
sign any and all amendment (including post-effective amendments) to
this registration statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state
securities law or blue sky filings, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in about the premises,
as fully to all intents and purposes as he might or could do in person,
hereby ratifying the confirming all that said attorney-in-fact and
agent, or any substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 20-F Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signature Title Date
/s/ David Atkinson President and a member July 3, 2000
David Atkinson of the Board of Directors
/s/ Joanta H. Green Member of the Board of June 27, 2000
Joanta H. Green of Director
Directors
/s/ Robert C. Darville Secretary/Treasurer, August 2, 2000
William A. Sutherland Chief Financial Officer,
and a member of the
Board of Directors
/s/ Mark Riser President and a member June 27, 2000
Mark Riser of the Board of Directors
