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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
----------------------------------
Amendment No. 1
FORM U5S/A
ANNUAL REPORT
For the Fiscal Year Ended September 30, 1998
---------------------
Filed Pursuant to the
Public Utility Holding Company Act of 1935
by
National Fuel Gas Company
10 Lafayette Square, Buffalo, NY 14203
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<PAGE>
EXHIBITS
A. *(1) Annual Report on Form 10-K for fiscal year ended September
30, 1998 filed December 21, 1998 (File No. 1-3880)
(2) National Fuel Gas Company 1998 Annual Report to Shareholders
(paper copy submitted under cover of Form SE)
*(3) National Fuel Gas Company Proxy Statement, dated and filed
December 31, 1998 (File No. 1-03880)
B. Articles of Incorporation, By-Laws and Partnership Agreements
(1) National Fuel Gas Company
*i Restated Certificate of Incorporation of National Fuel Gas
Company, dated September 21, 1998 (Exhibit 3.1, Form 10-K
for fiscal year ended September 30, 1998 in File No. 1-3880)
*ii National Fuel Gas Company By-Laws as amended through
September 17, 1998 (Exhibit 3.2, Form 10-K for fiscal year
ended September 30, 1998 in File No. 1-3880)
(2) National Fuel Gas Distribution Corporation
*i By-Laws, as amended (Exhibit 2(i), designated as Exhibit
EX-3(b) for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1994)
*ii Restated Certificate of Incorporation of National Fuel Gas
Distribution Corporation, dated May 9, 1988 (Exhibit B-1 in
File No. 70-7478)
(3) National Fuel Gas Supply Corporation
*i By-Laws, as amended (Exhibit (3)i, Form U5S for fiscal year
ended September 30, 1989)
*ii Articles of Incorporation of United Natural Gas Company,
dated February 1, 1886 (Exhibit (3)ii, Form U5S for fiscal
year ended September 30, 1984)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*iii Certificate of Merger and Consolidation dated January 2,
1951 (Exhibit (3)iii, Form U5S for fiscal year ended
September 30, 1984)
*iv Joint Agreement and Plan of Merger, dated June 18, 1974
(Exhibit (3)iv, Form U5S for fiscal year ended September 30,
1987)
*v Certificate of Merger and Plan of Merger of Penn-York Energy
Corporation and National Fuel Gas Supply Corporation dated
April 1, 1994 (Exhibit (3)v, designated as Exhibit EX-99-3
for EDGAR purposes, Form U5S for fiscal year ended September
30, 1994)
(4) Leidy Hub, Inc. (Formerly Enerop Corporation)
*i By-Laws (Exhibit A-15, File No. 70-7478)
*ii Restated Articles of Incorporation of Enerop Corporation
dated April 13, 1988 (Exhibit B-4 in File No. 70-7478)
*iii Action by Board of Directors to amend the By-Laws dated
October 10, 1993 including a Restated Certificate of
Incorporation of Enerop Corporation dated October 15, 1993
(Exhibit (4)iii, designated as Exhibit EX-3 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1993)
*iv Partnership Agreement between Leidy Hub, Inc. and Hub
Services, Inc. dated September 1, 1994 (Exhibit (4)iv,
designated as Exhibit EX-99-1 for EDGAR purposes, Form U5S
for fiscal year ended September 30, 1994)
*v Ellisburg-Leidy Northeast Hub Company Admission Agreement
dated June 12, 1995 (Exhibit (4)v, designated as Exhibit
EX-99-1 for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1995)
*vi Letter Agreement between Leidy Hub, Inc. and Hub Services,
Inc. dated June 12, 1995 (Exhibit (4)vi, designated as
Exhibit EX-99-2 for EDGAR purposes, Form U5S for fiscal year
ended September 30, 1995)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*vii Consent and waiver by Leidy Hub, Inc. dated June 12, 1995
(Exhibit (4)vii, designated as Exhibit EX-99-3 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1995)
(5) Seneca Resources Corporation
*i By-Laws, as amended (Exhibit (5)i, Form U5S for fiscal year
ended September 30, 1989)
*ii Articles of Incorporation of Mars Natural Gas Company dated
March 29, 1913 (Exhibit (5)ii, Form U5S for fiscal year
ended September 30, 1984)
*iii Secretary's Certificate dated January 4, 1918 (Exhibit
(5)iii, Form U5S for fiscal year ended September 30, 1984)
*iv Articles of Amendment, dated March 30, 1955 (Exhibit (5)iv,
Form U5S for fiscal year ended September 30, 1984)
*v Certificate of Amendment changing name of the Mars Company
to Seneca Resources Corporation, January 29, 1976 (Exhibit
(5)v, Form U5S for fiscal year ended September 30, 1984)
*vi Certificate of Merger and Plan of Merger of Seneca Resources
Corporation and Empire Exploration, Inc. dated April 29,
1994 (Exhibit (5)vi, designated as Exhibit EX-99-2 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1994)
*(6) Limited Partnership Agreement dated November 28, 1983, between
Empire Exploration, Inc. (now Seneca Resources Corporation) as
general partner and Herman P. Loonsk as limited partner (Exhibit
(8), Form U5S for fiscal year ended September 30, 1984)
*(7) Empire 1983 Drilling Program, Limited Partnership Agreement, dated
November 28, 1983, between Empire Exploration, Inc., (now Seneca
Resources Corporation) as general partner and those parties
collectively called limited partners (Exhibit (9), Form U5S for
fiscal year ended September 30, 1984)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*(8) Empire 1983 Joint Venture Agreement dated December 6, 1983 between
Empire Exploration, Inc. (now Seneca Resources Corporation) and
Empire 1983 Drilling Program (Exhibit (10), Form U5S for fiscal
year ended September 30, 1984)
(9) Highland Land & Minerals, Inc.
*i Certificate of Incorporation, dated August 19, 1982 (Exhibit
(11)i, Form U5S for fiscal year ended September 30, 1985)
*ii By-Laws (Exhibit (11) ii, Form U5S for fiscal year ended
September 30, 1987)
(10) Utility Constructors, Inc.
*i Articles of Incorporation, dated December 23, 1986, and
certificate of amendment dated December 31, 1986 (Exhibit
(12)i, Form U5S for fiscal year ended September 30, 1987)
*ii By-Laws (Exhibit (12)ii, Form U5S for fiscal year ended
September 30, 1987)
(11) Data-Track Account Services, Inc.
*i Restated Articles of Incorporation, dated March 2, 1984
(Exhibit A-1, File No. 70-7512)
*ii By-Laws (Exhibit A-2, File No. 70-7512)
(12) National Fuel Resources, Inc.
*i Articles of Incorporation, dated January 9, 1991 (Exhibit
(14)i, designated as Exhibit EX-3(a) for EDGAR purposes,
Form U5S for fiscal year ended September 30, 1992)
*ii By-Laws (Exhibit (14)ii, designated as Exhibit EX-3(b) for
EDGAR purposes, Form U5S for fiscal year ended September 30,
1992)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(13) Horizon Energy Development, Inc.
*i Certificate of Incorporation (Exhibit (13)i, designated as
Exhibit EX-3(a) for EDGAR purposes, Form U5S for fiscal year
ended September 30, 1995)
*ii By-Laws (Exhibit (13)ii, designated as Exhibit EX-3(b) for
EDGAR purposes, Form U5S for fiscal year ended September 30,
1995)
(14) Horizon Energy Holdings, Inc.
i Certificate of Incorporation dated April 1, 1998. Designated
as Exhibit EX99-1 for EDGAR purposes.
ii By-Laws. Designated as Exhibit EX99-2 for EDGAR purposes.
(15) Horizon Energy Development B.V. (formerly
Beheeren-Beleggingmaatschappij Bruwabel B.V.
*i Articles of Incorporation (Exhibit (14), designated as
exhibit EX-99-2 for EDGAR purposes, Form U5S for fiscal year
ended September 30, 1996)
(16) Horizon Energy Development, s.r.o. (formerly Power International,
s.r.o.)
*i Founding Notarial Deed, dated May 8, 1991 (Exhibit (15)i,
designated as Exhibit EX-99-9 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1996)
*ii Notarial Deed, dated December 2, 1993 (Exhibit (15)ii,
designated as Exhibit EX-99-10 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
*iii Notarial Deed, dated June 28, 1996 (Exhibit (15)iii,
designated as Exhibit EX-99-11 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
* Incorporated herein by reference as indicated
<PAGE>
EXHIBITS (Continued)
*iv Notarial Deed, dated November 27, 1996 (Exhibit (15)iv,
designated as Exhibit EX-99-12 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
(17) Power Development, s.r.o.
*i Founding Notarial Deed, dated May 4, 1994 (Exhibit (16)i,
designated as Exhibit EX-99-13 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
*ii Notarial Deed, dated June 28, 1996 (Exhibit (16)ii,
designated as Exhibit EX-99-14 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
*iii Notarial Deed, dated November 27, 1996 (Exhibit (16)iii,
designated as Exhibit EX-99-15 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1996)
(18) Teplarna Kromeriz a.s.
*i Statutes, dated June 1996 (Exhibit (17), designated as
Exhibit EX-99-16 for EDGAR purposes, Form U5S/A for fiscal
year ended September 30, 1996)
(19) KPP Investment, L.L.C.
*i Limited Liability Company Agreement dated January 11, 1996
(Exhibit (18)i, designated as exhibit EX-99-3 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1996)
*ii Certificate of Formation, dated January 15, 1997 (Exhibit
(18)ii, designated at Exhibit EX-99-4 for EDGAR purposes,
Form U5S for fiscal year ended September 30, 1996)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(20) Sceptre Kabirwala, L.L.C.
*i Limited Liability Company Agreement dated January 26, 1996
(Exhibit (19)i, designated as exhibit EX-99-5 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1996)
*ii Certificate of Formation, dated January 10, 1997 (Exhibit
(19)ii, designated as Exhibit EX-99-6 for EDGAR purposes,
Form U5S for fiscal year ended September 30, 1996)
(21) Severoceske Teplarny, a.s.
*i Articles of Association, dated April 24, 1997 (Exhibit
(20)i, designated as Exhibit EX99-11 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1997)
(22) Teplarna Liberec, a.s.
*i Founding Contract, dated November 11, 1994 (Exhibit (21)i,
designated as Exhibit EX99-12 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
*ii Notarial Record, dated November 11, 1994 (Exhibit (21)ii,
designated as Exhibit EX99-13 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
*iii Articles of the Association, dated June 12, 1997 (Exhibit
(21)iii, designated as Exhibit EX99-14 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1997)
(23) Energoservis Liberec, s.r.o.
*i Articles of Incorporation of Limited Liability Company
Foundation, dated August 14, 1995 (Exhibit (22)i, designated
as Exhibit EX99-15 for EDGAR purposes, Form U5S/A for fiscal
year ended September 30, 1997)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*ii Notarial Record, dated January 22, 1996 (Exhibit (22)ii,
designated as Exhibit EX99-16 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
(24) Zateca teplarenska, a.s.
*i Foundation Charter, dated December 4, 1995 (Exhibit (23)i,
designated as Exhibit EX99-17 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
*ii Articles of Association, dated December 4, 1995 (Exhibit
(23)ii, designated as Exhibit EX99-18 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1997)
(25) SCT Softmaker, s.r.o.
*i Notarial Record, dated September 24, 1996 (Exhibit (24)i,
designated as Exhibit EX99-19 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
(26) Zkusebna mericu tepla a vodomeru Litomerice, s.r.o.
*i Founders Deed, dated January 22, 1996 (Exhibit (25)i,
designated as Exhibit EX99-20 for EDGAR purposes, Form U5S/A
for fiscal year ended September 30, 1997)
(27) AMES MOST, s.r.o.
i Founders Deed, dated October 10, 1997. Designated as Exhibit
99-3 for EDGAR purposes.
(28) Teplo Branany, s.r.o.
i Partnership Agreement, dated November 18, 1997. Designated
as Exhibit 99-4 for EDGAR purposes.
(29) Jablonecka teplarenska a realitni, a.s.
i Articles of Association. Designated as Exhibit EX99-5 for
EDGAR purposes.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(30) Prvni severozapadni teplarenska, a.s.
i Notarial Record, dated April 28, 1992. Designated as Exhibit
EX99-6 for EDGAR purposes.
ii Articles of Association, dated April 28, 1992. Designated as
Exhibit EX99-7 for EDGAR purposes.
(31) ENOP, s.r.o.
i Founders Deed, dated December 19, 1995. Designated as
Exhibit EX99-8 for EDGAR purposes.
(32) Upstate Energy Inc. (formerly known as Niagara Energy Trading
Inc.)
i Restated Certificate of Incorporation of Niagara Energy
Trading Inc., dated May 19, 1998. Designated as Exhibit
EX99-9 for EDGAR purposes.
ii By-Laws as amended June 19, 1998. Designated as Exhibit
EX99-10 for EDGAR purposes.
(33) Niagara Independence Marketing Company
*i Certificate of Incorporation dated September 17, 1997
(Exhibit (27)i, designated as exhibit EX99-3 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1997)
ii By-Laws amended March 11, 1998. Designated at Exhibit
EX99-11 for EDGAR purposes.
*iii Marketing Partnership Agreement among Coastal Gas Marketing
DirectLink Corp., MGS Marketing Corp., Niagara Independence
Marketing Company and Williams Independence Marketing
Company (Exhibit (27)iii, designated as Exhibit EX-99-5 for
EDGAR purposes, Form U5S for fiscal year ended September 30,
1997)
(34) Seneca Independence Pipeline Company
*i Certificate of Incorporation of Empire Oklahoma, Inc. dated
April 16, 1996 (Exhibit (28)i, designated as Exhibit EX-99-6
for EDGAR purposes, Form U5S for fiscal year ended September
30, 1997)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*ii Certificate of Amendment of Certificate of Incorporation of
Empire Oklahoma, Inc. dated July 24, 1997 (Exhibit (28)ii,
designated as exhibit EX-99-7 for EDGAR purposes, Form U5S
for fiscal year ended September 30, 1997)
iii By-Laws amended March 11, 1998. Designated as Exhibit
EX99-12 for EDGAR purposes.
(35) HarCor Energy, Inc.
i Amended and Restated Certificate of Incorporation, dated
September 1, 1998. Designated as Exhibit EX99-13 for EDGAR
purposes.
ii By-Laws, as amended. Designated as Exhibit EX99-14 for EDGAR
purposes.
C. Indentures
* Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 2(b) in
File No. 2-51796)
* Third Supplemental Indenture dated as of December 1, 1982, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(4)
in File No. 33-49401)
* Tenth Supplemental Indenture dated as of February 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a),
Form 8-K dated February 14, 1992 in File No. 1-3880)
* Eleventh Supplemental Indenture dated as of May 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(b),
Form 8-K dated February 14, 1992 in File No. 1-3880)
* Twelfth Supplemental Indenture dated as of June 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(c),
Form 8-K dated June 18, 1992 in File No. 1-3880)
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
* Thirteenth Supplemental Indenture dated as of March 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(14)
in File No. 33-49401)
* Fourteenth Supplemental Indenture dated as of July 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4.1, Form
10-K for fiscal year ended September 30, 1993 in File No. 1-3880)
* Fifteenth Supplemental Indenture dated as of September 1, 1996 to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4.1, Form
10-K for fiscal year ended September 30, 1996 in File No. 1-3880)
* Rights Agreement between National Fuel Gas Company and Marine
Midland Bank dated June 12, 1996 (Exhibit 99.1, Form 8-K dated June
13, 1996 in File No. 1-3880)
D. * Tax Allocation Agreement pursuant to Rule 45(c) (Exhibit (D),
designated as exhibit EX-99-10 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1997)
E. *(1) Employee Relocation Manual filed pursuant to Rule 48(b)
(Exhibit E(1), designated as Exhibit EX-99-9 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1997)
(2) National Fuel Employee Computer Purchase Program filed
pursuant to Rule 48(b). Designated as Exhibit EX99-15 for
EDGAR purposes.
(3) Independence Pipeline Company Unaudited Financial Statements
for the quarter and year-to-date period ended September 30,
1998 and Unaudited Financial Statements for the period
September 23, 1997 through December 31, 1997. These documents
are subject to a request for confidential treatment under Rule
104(b) of the Public Utility Holding Company Act of 1935,
filed October 6, 1997.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
Note: Referencing Exhibit E(2), Form U5S for fiscal year ended September 30,
1997, filed in paper only as prescribed by Rule 16(c), during the
quarter ended March 31, 1998, the Company disposed of its interest in
Enerchange, L.L.C. and therefore no longer has access to the annual
report of Enerchange, L.L.C.
F. Schedules of Supporting Items of this Report - None.
G. Financial Data Schedules. (Designated as Exhibit EX-27 for EDGAR
purposes.)
H. (1) Organization chart showing relationship to Teplarna
Kromeriz, a.s., a foreign utility company. Designated as
Exhibit EX99-16 for EDGAR purposes.
(2) Organization chart showing relationship to Severoceske
teplarny, a.s. and Teplarna Liberec, a.s., both of which are
foreign utility companies. Designated as Exhibit EX99-17 for
EDGAR purposes.
(3) Organization chart showing relationship to Prvni severozapadni
teplarenska, a.s., a foreign utility company. Designated as
Exhibit EX99-18 for EDGAR purposes.
I. (1) SCT Audited Financial Statements for the Calendar Year
Ended December 31, 1997. Designated as Exhibit EX99-19 for
EDGAR purposes.
(2) TL Audited Financial Statements for the Calendar Year Ended
December 31, 1997. Designated as Exhibit EX99-20 for EDGAR
purposes.
(3) PSZT Audited Financial Statements for the Calendar Year Ended
December 31, 1997. Designated as Exhibit 99-21 for EDGAR
purposes.
(4) Kromeriz Audited Financial Statements for the Calendar Year
Ended December 31, 1997. Designated as Exhibit 99-22 for EDGAR
purposes.
* Incorporated herein by reference as indicated.
<PAGE>
S I G N A T U R E
The undersigned System company has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized pursuant to
the requirements of the Public Utility Holding Company Act of 1935.
NATIONAL FUEL GAS COMPANY
By: /s/ Joseph P. Pawlowski
------------------------
Joseph P. Pawlowski, Treasurer
and Principal Accounting Officer
Date: May 10, 1999
---------------
<PAGE>
EXHIBIT INDEX
EX99-21 PSZT Financial Statements for Year Ended December 31, 1997.
EX99-22 Kromeriz Financial Statements for Year Ended December 31, 1997.
Report of independent audit company
1. Examined unit
-------------
Prvni severozapadni teplarenska
Joint stock company
Komorany u Mostu
ICO: 46708197
2. Period of the financial statements
----------------------------------
The examination was made for the period from January 1, 1997 to
December 31, 1997.
3. Subject and purpose of examination
----------------------------------
Subject of the examination was the annual financial statements and the
annual report for 1997. The purpose of the examination was to find out
whether
- the data in the financial statements and in the annual report
fairly present the state of assets and liabilities, difference
between the assets and liabilities, financial position and results
of the financial management,
- the books are kept in a complete, supportable and correct way,
- the complement to the financial statements include the information
about significant facts occurred in the period from the financial
statements date to the date of the issue of this report, and the
information assuming the open-ended duration of the accounting
unit, should it be endangered in some way.
The inventory taking of movable and immovable assets was examined from
the point of view of evidencing its results. We have also examined the
realization of a physical inventory taking and the system of the
inventory-taking organization by a direct examination of selected
items.
4. Responsibility
--------------
The responsibility for the bookkeeping, for its completeness,
supportability and correctness falls on the statutory body of the
examined accounting unit. The auditor is obliged to work out - on the
basis of the performed audit - a report and to express his opinion on
the financial statements. The auditor must also examine the information
evidencing data in the particular financial statements.
The audit has been performed in compliance with the Act on Auditors and
Chamber of Auditors of the Czech Republic, and in compliance with the
auditing guidelines of the Chamber of Auditors of the Czech Republic.
The audit was planned and carried out in such a way to enable the
auditor to obtain all information which is necessary, to the best of
his knowledge and belief, for the examination of the financial
statements and which provide a reasonable guarantee that the financial
statements do not include any material misstatements, whether caused by
mistake, willfully or by other reason.
The examination has been carried out on a test basis and with regard to
the principle of materiality of reported facts, and has been aimed at
the evaluation of the completeness and supportability of amounts and
information specified in the financial statements, of the correctness
and appropriateness of accounting standards applied. The auditor has
also considered significant estimations and resolutions of the
accounting unit management reflected in the financial statements, and
the general presentation of the financial statements.
The audit performed has provided an adequate material to express our
opinion.
5. Opinion of an auditor
---------------------
We have examined the financial statements and the annual report for
1997 and on the basis of the established facts we have come to the
following conclusion:
In our opinion the financial statements of the examined entity have
been compiled in a prescribed extent and on the basis of data in books
kept in compliance with legal regulations in effect.
The examined financial statements and annual report fairly present in
all material respects assets, liabilities, own capital of the joint
stock company at December 31, 1997 and the financial position and
results of its financial management for the accounting period of 1997
in compliance with the respective laws and regulations. We therefore
express our opinion as unqualified.
Most/April 16, 1998
Examination carried out by: MK Audit v.o.s.
Auditor - license No. 113
Statutory auditor
Ing. Rudolf Mrnka
Enclosures: Comments to financial statements
Profit and Loss Statement
Balance Sheet
<PAGE>
<TABLE>
<CAPTION>
PSZT
BALANCE SHEET
12/31/1997 12/31/1996 12/31/1995
---------- ---------- ----------
(CZK 000's)
---------------------------------------------------
<S> <C> <C> <C>
Total Assets 4,633,148 3,519,485 2,514,486
Stock Subscriptions
Receivable - - -
Intangible and Tangible
Assets and Investments 4,029,663 3,116,955 2,194,919
Intangible Assets 519 1,135 1,330
Tangible Assets 4,029,024 3,115,700 2,193,589
Financial Investment 120 120 -
Current Assets 265,809 384,259 313,674
Inventory 47,449 45,408 37,765
Long-term Receivables 175 154 -
Short-term Receivables 180,178 252,767 102,910
Financial Accounts 38,007 85,930 172,999
Other Assets 337,676 18,271 5,893
Temporary Accounts of Assets 337,676 18,271 5,817
Contingencies - Gain - - 76
Total Shareholders' Equity and
Liabilities 4,633,148 3,519,485 2,514,486
Shareholders' equity 1,885,497 1,822,450 1,720,833
Registered Capital 1,006,309 1,006,309 1,006,309
Capital Funds 169 169 169
Funds Created From Profit 138,688 134,458 120,580
Retained Earnings 673,822 576,482 326,278
Profit and Loss of
Current Accounting Period 66,509 105,032 267,497
Liabilities 2,745,595 1,693,426 760,182
Reserves 338,962 192,461 45,673
Long-term Liabilities 300,000 300,000 300,000
Short-term Liabilities 254,178 284,541 131,943
Bank Loans and Short-term
Notes 1,852,455 916,424 282,566
Other Liabilities -
Temporary Accounts of
Liabilities 2,056 3,609 33,471
Accruals - 66 -
Contingencies-Loss 2,056 3,543 33,471
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSZT
PROFIT AND LOSS STATEMENT
12/31/1997 12/31/1996
---------- ----------
(CZK 000's)
--------------------------------------
<S> <C> <C>
Operation 1,874,611 1,771,230
Revenues from Finished Products
and Services 1,874,364 1,770,905
Capitalization 247 325
Consumption from Operation 837,663 846,901
Value Added 1,036,948 924,329
Personnel Expenses (-) 143,359 122,701
Taxes and Fees (-) 1,126 1,054
Amortization of Intangibles and
Depreciation of Tangibles (-) 150,153 76,054
Revenues from Intang. and Tang.
Assets and Materials Sold (+) 70,592 72,192
Net Book Value of Intangibles,
Tangibles and Material Sold (-) 61,173 61,121
Reversal of Reserves and Prepaid
Expenses (+) 42,155 -
Creation of Reserves and Prepaid
Expenses (-) 65,036 82,976
Reversal of Provisions (+) 8,707 6,787
Creation of Provisions (-) 8,182 8,692
Other Operational Revenues (+) 330 381
Other Operational Expenses (-) 357,354 331,189
Net Operating Results (A) 372,349 319,902
Reversal of Financial Reserves (+) 557 5
Creation of Financial Reserves (-) 124,176 63,818
Interest Revenues (+) 6,574 18,108
Interest Expenses (-) 98,396 39,000
Other Financial Revenues (+) 49,023 164
Other Financial Expenses (-) 46,366 31,476
Net Result from Financial
Activities (B) (212,784) (116,017)
Income Taxes on Normal Activity (C) 89,585 97,610
Net Result After Taxes from
Normal Activities (A+B-C=D) 69,980 106,275
Extraordinary Revenues (+) 117 20
Extraordinary Expenses (-) 3,543 1,255
Income Tax on Extraordinary
Activity (-) 45 8
Net Result from Extraordinary
Activities (E) (3,471) (1,243)
Net Income (Net Loss) for the
Accounting Period (D+E) 66,509 105,032
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSZT
CASH FLOW
December 31, 1997
-----------------
<S> <C>
Cash and Cash Equivalents at the Beginning
of the Accounting Period (A) 85,930
Profit/Loss from Normal Activity Before Taxes (B) 159,566
Adjustments by Non-cash Transactions (C) 66,836
Depreciation of Fixed Assets (+) 150,557
Change in Provisions, Reserves and Change in
Prepayments and Accruals (174,983)
(Profit) Loss from Sale of Fixed Assets (+/-) (559)
Interest Expense (+) 91,821
Net Cash Flow from Operational Activity Before
Taxes and Before Changes in Working Capital
and Extraordinary Items (B+C=D) 226,402
Change in Working Capital (E) (49,325)
Change in Receivables from Operational Activities (+/-) 18,187
Change in Short-term Payables from Operational
Activities (+/-) (65,972)
Change in Inventories Balance (+/-) (1,540)
Net Cash Flow from Operational Activity Before
Taxes and Extraordinary Items (D+E=F) 177,077
Interest Paid (-) (98,396)
Interest Received (+) 6,575
Revenues and Expenses Related to Extraordinary Items (3,426)
Net Cash Flow from Operational Activity (G) 81,830
Fixed Asset Acquisition (1,063,323)
Sale of Fixed Assets 1,001
Net Cash Flow from Investment Activity (H) (1,062,322)
Change in Long-term and Short-term Liabilities 936,031
Impact of Changes in Equity (3,462)
Direct Payments Debited to Funds (-) (1,867)
Paid-out Dividends and Profit Shares (-) (1,595)
Dividends and Profit Shares Received (+) -
Net Cash Flow from Financial Activity (I) 932,569
Net Increase/Decrease in Cash (G+H+I=J) (47,923)
Cash and Cash Equivalents at the End of the
Accounting Period (A+J) 38,007
</TABLE>
Auditor's statement
I have audited the financial statements of the Kromeriz Heating Plant joint
stock company, Company identification number 25304925, for the year 1997 in
accordance with the National Council Act No. 524/1922 Coll., on Auditors and the
Chamber of Auditors of the Czech Republic, and with the Auditing Guidelines
issued by the Chamber of Auditors. Our audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. Our audit also includes assessing whether the accounting policies
used and significant estimates made by management are fair and suitable, as well
as evaluating the overall presentation of the financial statements. I believe
that the performed audit provides a reasonable basis for expressing my opinion
on the financial statements.
The management of the Company is responsible for the preparation of the
financial statements and for maintaining accounting records in accordance with
Act of the Czechoslovak Federal Republic No. 563/1991 Coll. On Accounting. The
auditor's responsibility is to express an opinion on the financial statements
taken as a whole.
Based on the examined facts given in the auditor's report I state that
- - the financial statement is prepared in compliance with accounting
legislation valid in the Czech Republic;
- - the financial statements for the year ended December 31, 1997 present
fairly, in all material aspects, the assets, liabilities, equity and
financial position of the joint stock company;
- - the maintained accounting records are complete, supportable and correct;
- - the data in the annual report correspond to the financial statements data
which I verified.
Prague, May 10, 1998
Round Seal
Ing. Zdenek Matejovsky
Auditor No. 352
Ing. Zdenek Matejovsky (signature)
Auditor, License Decree No. 352
<PAGE>
<TABLE>
<CAPTION>
Profit and Loss Statement
In its full extent
As of December 31, 1997
(in whole thousands of Czech crowns)
1997 1996
---- ----
<S> <C> <C>
Income from sale of goods 2 -
Costs expended on goods sold - -
------ ------
Trade margin 2 -
Performances 55,002 24,396
------ ------
Income from sale of own products and
services 55,002 24,396
Output Consumption 48,824 22,435
------ ------
Consumption of material and power 43,946 20,919
Services 4,878 1,516
------ ------
Value added 6,180 1,961
Personal expenses 4,873 2,239
------ ------
Wages expenses 3,608 1,656
Expenditure on social security 1,265 583
Taxes and payments (-) 40 39
Deductions on intangible and tangible
fixed assets (-) 1,277 1,328
Income from sale of fixed assets and
Materials (+) 11 -
Accounting of corrective items in
operative yields (+) 129 65
Accounting of corrective items in
operative costs (-) - 1,453
Other operative yields (+) 55 26
Other operative costs (-) 139 57
Operative economic result (A) 46 (3,064)
Interest revenues (+) 207 20
Interest expenses (-) 2,553 1,537
Other financial expenses (-) 108 46
Net result from financial activities (B) (2,454) (1,563)
Income taxes on normal activity - -
- due - -
- deferred - -
Net result after taxes from normal activity
(A+B =C) (2,408) (4,627)
Extraordinary revenues 735 0
Extraordinary expenses - -
Income tax on extraordinary activity - -
- due - -
- deferred - -
Net result from extraordinary activities (D) 735 -
Net income (net loss) for the accounting
Period (C + D) (1,673) (4,627)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEET
In its full extent
As of December 31, 1997
(in whole thousands of Czech crowns)
1997 1996
---- ----
<S> <C> <C>
ASSETS
Total Assets 40,783 37,718
====== ======
Intangible and Tangible Assets and
Investments 31,022 30,172
------ ------
Intangible inv. Assets 12 15
Tangible assets 31,010 30,157
------ ------
Land 1,321 1,321
Buildings, halls and constructions 16,412 16,893
Separate movable items and sets of
mov. It. 6,085 6,682
Incomplete tangible investments 8,742 6,940
Corrective item for acquired property (1,550) (1,679)
Current Assets 8,976 7,353
------ ------
Trade Receivables 8,666 6,335
Other Receivables 33 8
Cash 140 113
Bank Accounts 128 897
Short-Term Financial Assets 9 -
Other Assets 785 193
------ ------
Temporary Accounts of Assets 51 192
Contingencies - Gain 734 1
TOTAL LIABILITIES 40,783 37,718
====== ======
Own capital 1,890 (10,727)
------ -------
Basic capital 1,000 1,000
Capital funds 14,291 -
Economic result of past years (11,728) (7,100)
Economic result of current acc. period (1,673) (4,627)
Foreign resources 38,705 48,393
------ ------
Short-term liabilities 27,830 30,268
------ ------
Trade payables 5,585 5,006
Payables to employees 202 190
Social security payable 126 122
Taxes payable 884 100
Payables to related companies
(shareholdings less than 50%) 21,018 24,754
Other payables 15 96
Bank loans and short-term notes 10,875 18,125
------ ------
Long-term bank loans 3,625 10,875
Short-term bank loans 7,250 7,250
Other liabilities - temporary accounts of
liabilities 188 52
------ ------
Contingencies - loss 188 52
</TABLE>
