Exhibit H-2

AUDITOR'S REPORT PricewaterhouseCoopers Audit, s.r.o.
Katerinska 40
120 00 Prague 2
Czech Republic
Telephone +420 (2) 5115 1111
Facsimile +420 (2) 5115 6111
Company ID 40765521

REPORT OF INDEPENDENT AUDITORS

TO THE SHAREHOLDERS OF TEPLARNA LIBEREC, a.s.

We have audited the accompanying balance sheet of Teplarna Liberec, a.s. as at 31 December 2000, the related income statement and notes, including the statement of cash flows, for the year then ended (“the financial statements”). The financial statements and underlying accounting records are the responsibility of the Company’s Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Act on Auditors and Auditing Standards of the Chamber of Auditors of the Czech Republic. Those auditing standards require that we plan and perform the audit to obtain reasonable assurance as to 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 the accompanying financial statements present fairly, in all material respects, the assets, liabilities and equity of Teplarna Liberec, a.s. as at 31 December 2000, and the results of its operations and its cash flows for the year then ended in accordance with the Act on Accounting and other relevant legislation of the Czech Republic.

2 March 2001

PricewaterhouseCoopers Audit, s.r.o.
Represented by


Thomas Linder                                             Ivana Kunova
Partner                                                   Auditor, Licence No. 1784

PricewaterhouseCoopers Audit, s.r.o. is registered in the Commercial Register with the Municipal Court in Prague, part C section No. 3637, and in the Register of Audit Companies with the Chamber of Auditors of the Czech Republic under Licence No. 21.

                             TEPLARNA LIBEREC, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                                     ASSETS

                                                       12/31/2000     12/31/1999
                                                       ------------  -------------

                                                              (CZK 000's)

Total Assets                                               555,609        592,026
                                                       ============  =============

Fixed Assets                                               393,999        389,073
                                                       ------------  -------------

    Intangible Assets                                          406            379
                                                       ------------  -------------

      Software                                                 354            316
      Patents, Copyrights, Trademarks, Tradenames               52             63
                                                       ------------  -------------

    Fixed (Tangible) Assets                                393,593        388,694
                                                       ------------  -------------

      Land                                                   7,050          7,137
      Plant (Buildings, Halls and Construction)            132,650        122,957
      Capital Equipment                                    246,220        251,833
      Acquisition of Fixed Asset in Progress                 7,673          5,930
      Deposits Towards Fixed Acquisitions                        -            837
                                                       ------------  -------------

Current Assets                                             161,083        202,454
                                                       ------------  -------------

    Inventory                                                6,356         59,944
                                                       ------------  -------------

      Raw Materials                                          6,356         59,944
                                                       ------------  -------------

    Long-Term Receivables                                        -            481
                                                       ------------  -------------

      Long-Term Receivables                                      -            481
                                                       ------------  -------------

    Accounts Receivable                                     66,987         62,398
                                                       ------------  -------------

      Accounts Receivable                                   55,714         56,387
      Receivable - Taxes                                    11,214          5,758
      Other Accounts Receivable                                 59            253
                                                       ------------  -------------

    Current Liquid Assets                                   87,740         79,631
                                                       ------------  -------------

      Petty Cash and Deposits in Transit                        59            139
      Cash in Bank                                          12,681          3,992
      Marketable Securities                                 75,000         75,500
                                                       ------------  -------------

Other Assets - Temporary Debit Accounts                        527            499
                                                       ------------  -------------

    Accruals                                                   419            198
                                                       ------------  -------------

      Prepaid Expenses                                         348             94
      Unbilled Revenue                                          71            104
                                                       ------------  -------------

    Contingencies and Estimate Prepaid Items (Debit Balance)   108            301
                                                       ------------  -------------



                             TEPLARNA LIBEREC, a.s.
                      FINANCIAL STATEMENTS - BALANCE SHEET
                         LIABILITIES AND OWNER'S EQUITY

                                                        12/31/2000     12/31/1999
                                                        ------------  -------------

                                                               (CZK 000's)

Total Liabilities and Owner's Equity                        555,609        592,026
                                                        ============  =============

Owner's Equity                                              507,196        532,149
                                                        ------------  -------------

    Capital Stock at Par                                    500,000        500,000
                                                        ------------  -------------

      Capital Stock at Par                                  500,000        500,000
                                                        ------------  -------------

    Restricted Retained Earnings                              3,583          2,461
                                                        ------------  -------------

      Statutory Reserve Account                               2,609          2,461
      Other Equity Accounts                                     974              -
                                                        ------------  -------------

    Retained Earnings                                        27,540         26,731
                                                        ------------  -------------

      Retained Earnings                                      27,540         26,731
                                                        ------------  -------------

    Net Income or Net Loss                                  (23,927)         2,957
                                                        ------------  -------------

External Sources (of Money)                                  43,505         57,329
                                                        ------------  -------------

    Reserves                                                      -         17,707
                                                        ------------  -------------

      Other Reserves                                              -         17,707
                                                        ------------  -------------

    Current Liabilities                                      43,505         39,622
                                                        ------------  -------------

      Accounts Payable                                       34,172         31,142
      Payroll Payable                                         2,105          2,295
      Social Security Payable                                 1,328          1,376
      Taxes Payable                                             387          1,541
      Deferred Taxes Payable                                  5,489          3,121
      Other Payables                                             24            147
                                                        ------------  -------------

Other Liabilities and Equity - Closing Accounts               4,908          2,548
                                                        ------------  -------------

    Accrual Accounts                                          1,235            702
                                                        ------------  -------------

      Accrued Expenses                                        1,171            667
      Unearned Revenue                                           64             35
                                                        ------------  -------------

    Contingencies and Estimated Accrued
        Items (Credit Balance)                                3,673          1,846
                                                        ------------  -------------



TEPLARNA LIBEREC, a.s.
FINANCIAL STATEMENTS - INCOME STATEMENT


                                                                   12/31/2000     12/31/1999
                                                                   ------------  -------------

                                                                          (CZK 000's)

Revenue (from Sale of Merchandise)                                           -            154
                                                                   ------------  -------------

Cost of Goods Sold (Merchandise)                                             -            154
                                                                   ------------  -------------

Gross Profit on Merchandise Sold                                             -              -
                                                                   ------------  -------------

Revenue (from Sale of Manufactured Goods) (A)                          546,856        564,409
                                                                   ------------  -------------

    Revenue (from Sale of Manufactured Goods and/or Services)          546,808        564,355
    Self-Constructed Asset Revenue                                          48             54
                                                                   ------------  -------------

Cost of Materials Used in Manufacturing (B)                            517,716        474,495
                                                                   ------------  -------------

    Raw Materials and Utilities Used                                   334,328        284,859
    Services Used                                                      183,388        189,636
                                                                   ------------  -------------

Gross Profit on Sales (A) - (B) (+)                                     29,140         89,914
                                                                   ------------  -------------

Payroll (-)                                                             46,079         47,041
                                                                   ------------  -------------
    Wages and Salaries                                                  32,798         32,917
    Board Members Fees and Bonuses                                         960            820
    Social Security Expenses                                            11,553         11,449
    Fringe Benefits                                                        768          1,855
                                                                   ------------  -------------
Taxes and Fees (-)                                                          80             62
Amortization of Intangible and Depreciation
   of Tangible Fixed Assets (-)                                         31,868         29,900
Moneys Received from Sale of Fixed Assets and Raw Materials (+)          1,090            152
Net Book Value of Disposed Fixed Assets or Raw Materials (-)               534            354
Clearing of Reserves and Accrued Revenue (+)                            17,707          4,779
Creation of Reserves and Accrued Expenses (-)                                -          9,707
Clearing of Gains on Assets to Operating Revenue (+)                     1,700            989
Clearing of Losses on Assets to Operating Expense (-)                    3,320          2,950
Other Operating Gains (Revenues) (+)                                     7,508          4,408
Other Operating Expenses (-)                                             4,480          9,721
                                                                   ------------  -------------

Operating Income (C)                                                   (29,216)           507
                                                                   ------------  -------------

Gains on Investments (+)                                                     -              2
                                                                   ------------  -------------
    Gains on Other Securities and Direct Investments                         -              2
                                                                   ------------  -------------
Gains on Marketable Securities (+)                                       4,618          3,715
Interest Income (+)                                                      1,378          2,360
Interest Expense (-)                                                         -            161
Other Expenses on Investments (-)                                          112            142
                                                                   ------------  -------------

Profit/Loss from Financial Operations (D)                                5,884          5,774
                                                                   ------------  -------------

Income Tax (E)                                                           4,006          4,496
                                                                   ------------  -------------
    -payable                                                             1,638          2,061
    -deferred                                                            2,368          2,435
                                                                   ------------  -------------

Income from Operations (C)+(D)-(E) = (F)                               (27,338)         1,785
                                                                   ------------  -------------

Unusual and/or Extraordinary Gain/Income (+)                             4,740          1,355
Unusual and/or Extraordinary Loss/Expenses (-)                           1,329            183
                                                                   ------------  -------------

Unusual Profit/Loss (G)                                                  3,411          1,172
                                                                   ------------  -------------

Net Income/Loss for Fiscal Period (F)+(G)                              (23,927)         2,957
                                                                   ============  =============

Income Before Tax                                                      (19,921)         7,453
                                                                   ============  =============



                             TEPLARNA LIBEREC, a.s.
                              CASH FLOW STATEMENT


                                                                     12/31/2000    12/31/1999
                                                                     -----------  --------------

                                                                            (CZK 000's)

Cash Flow from Ordinary Activities

Net Profit/Loss from Current Operations Before Tax (A)                  (23,332)          6,281
                                                                     -----------  --------------

Adjustments for Non-Cash Movements (B)                                   11,683          26,492
                                                                     -----------  --------------

    Depreciation of Fixed Assets                                         32,343          30,701
    Change in General Provisions, Accruals and Prepayments              (14,164)          1,449
    Profit/Loss from Disposal of Tangible Assets                           (500)            256
    Net Interest Expense                                                 (5,996)         (5,914)
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities Before Tax,
    Changes in Current Assets and Extraordinary Items (A) + (B) = (C)   (11,649)         32,773
                                                                     -----------  --------------

Increase/Decrease in Current Assets (D)                                  51,358          23,225
                                                                     -----------  --------------

    Increase/Decrease in Receivables                                     (3,177)         (1,613)
    Increase/Decrease in Short Term Payables                              2,273          19,410
    Increase/Decrease in Inventories                                     52,262           5,428
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities Before Tax
    and Extraordinary Items (C) + (D) = (E)                              39,709          55,998

Interest Paid (F)                                                             -            (161)
Interest Received (G)                                                     5,996           6,075
Income Tax on Ordinary Activities Paid (H)                               (4,502)         (6,506)
Revenues and Expenses Related to Extraordinary Items (I)                   (768)            291
                                                                     -----------  --------------

Net Cash Flows from Ordinary Activities
    (E) + (F) + (G) + (H) + (I) = (L)                                    40,435          55,697
                                                                     -----------  --------------

Cash Flows from Investing Activities

Acquisitions of Fixed Assets                                            (32,310)        (37,363)
Proceeds from Sale of Fixed Assets                                        1,010              80
                                                                     -----------  --------------

Net Cash Flows From Investing Activities (M)                            (31,300)        (37,283)
                                                                     -----------  --------------

Cash Flows from Financing Activities

Change in Long Term and Short Term Liabilities (J)                            -          (5,155)
Changes in Equity (K)                                                    (1,026)           (350)
                                                                     -----------  --------------

    Dividends Paid                                                       (1,026)           (350)
                                                                     -----------  --------------

Net Cash Flows from Financing Activities (J) + (K) = (N)                 (1,026)         (5,505)
                                                                     -----------  --------------

Net Increase in Cash and Cash Equivalents (L) + (M) + (N) = (O)           8,109          12,909

Cash and Cash Equivalents at the Beginning of the Year (P)               79,631          66,722
                                                                     -----------  --------------

Cash and Cash Equivalents at the End of the Year (O) + (P)               87,740          79,631
                                                                     ===========  ==============