Exhibit H-3

        Auditor’s report on audit of financial statements of Teplárna Kromeríz, a.s.

intended for shareholders of this Company, with its registered seat at Kromeríz, Na sádkách 3572.

The 2000 financial statements of Teplárna Kromeríz, a.s. seated at Kromeríz, Na sádkách 3572, were audited due to legal obligation to provide financial statements audited by an auditor.

The ordinary financial statements prepared as of December 31, 2000 were subject to the audit pursuant to Section 14(1) and (2) of the Czech National Council’s Act No. 524/1992 Coll.

In our audit, we paid attention to:

• a checkout of the balance sheet continuity;
  
• a checkout of linking of balances on synthetic accounts to the balance sheet and the profit and loss statement. This checkout was carried out in Microsoft Excel. After balances of synthetic accounts had been taken over and control statements had been made, no differences were found out;
  
• the system of accounting procedures and internal audit in year 2000, with regard to methodological and technical approaches and the compliance with valid regulations, particularly with the Act No. 563/1991 Coll., on Accounting Procedures, and with the ruling of the Federal Ministry of Finance, reg. No. V/20-100/1992, on Account Classification and Accounting Methods for Entrepreneurs, as amended;
  
• a survey of balances discovered in the Company's accounting as of December 31, 2000 on the accounts of the Company's assets and on the accounts of its liabilities and equity;
  
• an evaluation of events that occurred after the financial statements date and that could have an impact on our auditor’s report.
  

We conducted our audit in accordance with the guidelines issued by the Chamber of Auditors of the Czech Republic, and/or with requirements of international auditing standards ensuing from the responsibility of the Company’s statutory bodies for keeping complete, supportable and correct accounting records, and from the obligation to have data in the financial statements audited on a test basis and using the principles of significance. Accounting documents related to accounting records were audited on a test basis. No extraordinary survey of any assets was necessary.

Based on the results of the applied auditing methods, we did not find out any significant errors or discrepancies with valid laws and regulations. The carried-out audit entitles us reasonably to issue this statement:

In our opinion, the financial statements, in all their essential aspects, present fairly the assets, liabilities, equity and the financial position of Teplárna Kromeríz, a.s., as of December 31, 2000 and its economic results in the accounting period 2000 in accordance with the Act No. 563/1991 Coll., on Accounting, and with respective regulations.

Bystrice pod Hostynem, April 11, 2001
On behalf of Muller - audit spol. s r.o., license No. KACR 140
Ing. Jiri Muller, autitor, decree No. 527, the Executive of the Company

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

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

                                                             (CZK 000's)

Total Assets                                               47,696         44,273
                                                      ============  =============

Intangible and Tangible Assets and Investments             32,753         28,973
                                                      ------------  -------------

    Intangible Assets                                           3              6
                                                      ------------  -------------

      Expenses of Foundation and Organization                   3              6
                                                      ------------  -------------

    Tangible Assets                                        32,750         28,967
                                                      ------------  -------------

      Land                                                  1,321          1,321
      Buildings, Halls and Constructions                   14,904         15,228
      Separate Movable Items and Groups of Movable Items    8,908          4,967
      Tangibles in Progress                                 8,779          8,742
      Adjustment to Acquired Property                      (1,162)        (1,291)
                                                      ------------  -------------

Current Assets                                             14,935         15,269
                                                      ------------  -------------

    Short-Term Receivables                                 13,008         13,504
                                                      ------------  -------------

      Trade Receivables                                    11,563         12,313
      Receivables from Taxes and Subsidies                  1,445          1,186
      Other Receivables                                         -              5
                                                      ------------  -------------

    Financial Accounts                                      1,927          1,765
                                                      ------------  -------------

      Cash                                                    621            162
      Bank Accounts                                         1,306          1,560
      Short-Term Financial Assets                               -             43
                                                      ------------  -------------

Other Assets                                                    8             31
                                                      ------------  -------------

    Temporary Accounts of Assets                                8             31
                                                      ------------  -------------

      Prepaid Expenses                                          8             31
                                                      ------------  -------------



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

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

                                                                                   (CZK 000's)

Total Capital and Liabilities                                                  47,696            44,273
                                                                      ================   ===============

Capital                                                                        27,711              (542)
                                                                      ----------------   ---------------

    Basic Capital                                                              42,036            17,487
                                                                      ----------------   ---------------

       Basic Capital                                                           42,036            17,487
                                                                      ----------------   ---------------

    Retained Earnings                                                         (18,029)          (12,914)
                                                                      ----------------   ---------------

       Retained Losses of Previous Years                                      (18,029)          (12,914)
                                                                      ----------------   ---------------

    Profit and Loss of Current Accounting Period                                3,704            (5,115)
                                                                      ----------------   ---------------

Liabilities                                                                    19,896            44,734
                                                                      ----------------   ---------------

    Long-Term Liabilities                                                       3,800                 -
                                                                      ----------------   ---------------

       Long-Term Payables to Related Companies (Shareholdings > 50%)            3,800                 -
                                                                      ----------------   ---------------

    Short-Term Liabilities                                                     16,096            41,334
                                                                      ----------------   ---------------

       Trade Payables                                                          11,563             9,153
       Payables to Partners and Associations                                    3,937                 -
       Payables to Employees                                                       22                82
       Social Security Payable                                                    430               310
       Taxes Payable                                                              144               115
       Payables to Related Companies (Shareholdings > 50%)                          -            31,666
       Other Payables                                                               -                 8
                                                                      ----------------   ---------------

    Bank Loans and Short-Term Notes                                                 -             3,400
                                                                      ----------------   ---------------

       Short-Term Bank Loans                                                        -             3,400
                                                                      ----------------   ---------------

Other Liabilities - Temporary Accounts of Liabilities                              89                81
                                                                      ----------------   ---------------

    Accruals                                                                       71                71
                                                                      ----------------   ---------------

       Accruals                                                                    71                71
                                                                      ----------------   ---------------

    Contingencies - Loss                                                           18                10
                                                                      ----------------   ---------------


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


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

                                                                                   (CZK 000's)

Operation (A)                                                                   41,938            44,215
                                                                      -----------------   ---------------

    Revenues from Finished Products and Services                                41,938            44,215
                                                                      -----------------   ---------------

Consumption from Operation (B)                                                  35,140            42,153
                                                                      -----------------   ---------------

    Consumption of Material and Energy                                          32,125            33,836
    Services                                                                     3,015             8,317
                                                                      -----------------   ---------------

Value Added (A)-(B) (+)                                                          6,798             2,062
                                                                      -----------------   ---------------

Personnel Expenses (-)                                                           3,772             4,565
                                                                      -----------------   ---------------
    Wages and Salaries and Earnings of Partners and Coop. Members                2,780             3,381
    Social Insurance and Other Expenses                                            992             1,184
                                                                      -----------------   ---------------
Taxes and Fees (-)                                                                  61             1,128
Amortization of Intangible and Depreciation of Tangibles (-)                       998             1,444
Revenues from Intangible and Tangible Assets and Material Sold (+)                 213                 -
Net Book Value of Intangibles, Tangibles and Material Sold (-)                     275                 -
Reversal of Provisions (+)                                                         129               129
Creation of Provisions (-)                                                       1,041                 -
Other Operational Revenues (+)                                                      38                37
Other Operational Expenses (-)                                                     114               126
                                                                      -----------------   ---------------

Net Operating Results (C)                                                          917            (5,035)
                                                                      -----------------   ---------------

Interest Revenues (+)                                                               12               156
Interest Expenses (-)                                                              348               103
Other Financial Expenses (-)                                                       316               133
                                                                      -----------------   ---------------

Net Result from Financial Activities (D)                                          (652)              (80)
                                                                      -----------------   ---------------

Net Result After Taxes from Normal Activities (C)+(D) = (E)                        265            (5,115)
                                                                      -----------------   ---------------

Extraordinary Revenues (+)                                                       3,438                 -
                                                                      -----------------   ---------------

Net Result from Extraordinary Activities (F)                                     3,438                 -
                                                                      -----------------   ---------------

Net Income (Net Loss) for the Accounting Period (E)+(F)                          3,703            (5,115)
                                                                      =================   ===============

Result of Operations Before Tax                                                  3,703            (5,115)
                                                                      =================   ===============


                            TEPLARNA KROMERIZ, a.s.
                              CASH FLOW STATEMENT


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

                                                                                  (CZK 000's)

Cash and Cash Equivalents at the Beginning of the Accounting Period (P)                    1,765
                                                                               ------------------

Cash Flow from Main (Operational) Activity

Profit/Loss from Normal Activity Before Taxes (A)                                            266
                                                                               ------------------

Adjustments by Non-Cash Transactions (B)                                                     330
                                                                               ------------------

     Depreciation of Fixed Assets                                                            998
     Change in Provisions, Reserves and Change in Prepayments and Accruals                  (942)
     (Profit) Loss from Sale of Fixed Assets                                                 (62)
     Interest Expense                                                                        336
                                                                               ------------------

Net Cash Flow from Operational Activity Before Taxes and Before Changes
     in Working Capital and Extraordinary Items (A) + (B) = (C)                              596
                                                                               ------------------

Change in Working Capital (D)                                                              5,598
                                                                               ------------------

     Change in Receivables from Operational Activities                                     4,364
     Change in Short-Term Payables from Operational Activities                             1,234
                                                                               ------------------

Net Cash Flow from Operational Activity Before Taxes and Extraordinary
     Items (C) + (D) = (E)                                                                 6,194

Interest Paid (F)                                                                           (348)
Interest Received (G)                                                                         12
Revenues and Expenses Related to Extraordinary Items (H)                                   3,438
                                                                               ------------------

Net Cash Flows from Operational Activities (E) + (F) + (G) + (H) = (L)                     9,296
                                                                               ------------------

Cash Flow from Investment Activity

Fixed Asset Acquisition                                                                   (6,168)
Sale of Fixed Assets                                                                         213
Loans to Related Parties                                                                 (27,728)
                                                                               ------------------

Net Cash Flow From Investment Activity (M)                                               (33,683)
                                                                               ------------------

Cash Flow from Financial Activity

Change in Long-Term and Short-Term Liabilities (J)                                             -
Impact of Changes in Equity (K)                                                           24,549
                                                                               ------------------

     Capital and Reserve Fund Increase                                                    24,549
                                                                               ------------------

Net Cash Flow from Financial Activity (J) + (K) = (N)                                     24,549
                                                                               ------------------

Net Increase/Decrease in Cash (L) + (M) + (N) = (O)                                          162
                                                                               ------------------

Cash and Cash Equivalents at the End of the Accounting Period (O) + (P)                    1,927
                                                                               ==================