interim financial statements for the period ending September 30, 2004

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the
Securities Exchange Act of 1934

For the month of         November, 2004

Commission File Number    0-29586

EnerNorth Industries Inc.
(formerly: Energy Power Systems Limited)
(Address of Principal executive offices)


2 Adelaide Street West, Suite 301, Toronto, Ontario, M5H 1L6, Canada
(Address of principal executive offices)


Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F X         Form 40-F    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes            No X        

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes         No X        

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3- 2(b):
82- _________

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EnerNorth Industries Inc.
(formerly: Energy Power Systems Limited)


Date: November 12, 2004                    By:____"Sandra J. Hall"____ ______
      Sandra J. Hall,
                              President, Secretary & Director
 
 
 

 
     
 

 
 
 







 

 
 

 

Consolidated Financial Statements
First Quarter
September 30, 2004
(Unaudited)
(Expressed in Canadian Dollars)



Notice to Reader



Management has compiled the unaudited interim consolidated financial information of EnerNorth Industries Inc. consisting of the unaudited interim Consolidated Balance Sheet as at September 30, 2004, Consolidated Statements of Income and Deficit and Consolidated Statements of Cash Flows for the three months ended September 30, 2004. All amounts are stated in Canadian Dollars. An accounting firm has not reviewed or audited these interim consolidated financial statements.









2 Adelaide Street West, Suite 301, Toronto, Ontario M5H 1L6
1-866-230-3305 www.enernorth.com
 
 

 
     
 


 
          
EnerNorth Industries Inc.
          
Consolidated Balance Sheets
          
(Expressed in Canadian dollars)
          
   
September 30, 2004
  
June 30, 2004
  
   
(unaudited) 
    
(audited
)
               
               
               
ASSETS
              
Current
              
Cash and cash equivalents
  
$
742,216
 
$
600,313
 
Marketable securities
    
521,039
   
521,039
 
Receivables
    
6,685,959
   
7,690,129
 
Inventories
    
482,221
   
466,969
 
Unbilled revenue
    
1,383,007
   
1,941,548
 
Due from co-venturer
    
1,330,247
   
923,168
 
Prepaid expenses
    
62,440
   
700,851
 
Investment
   
3,262,996
   
3,365,000
 
Total current assets
    
14,470,125
   
16,209,017
 
               
Oil and gas interests (net of accumulated
              
depletion)
    
3,769,450
   
3,750,817
 
Capital assets (net of accumulated
              
depreciation and amortization)
    
3,214,071
   
3,272,538
 
Investment
    
-
   
-
 
Future income tax asset
    
30,224
   
30,224
 
               
   
$
21,483,870
 
$
23,262,596
 
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current
              
Bank indebtedness
 
$
1,239,831
 
$
2,213,010
 
Accounts payable and accrued liabilities
    
4,178,957
   
4,368,412
 
Due to shareholder (Note 3a)
    
42,000
   
42,000
 
Current portion of long-term debt
   
226,499
   
226,499
 
Deferred revenue
    
7,919
   
351,782
 
Future income tax liability
    
276,648
   
276,648
 
Oakwell claim
   
7,574,558
   
7,915,681
 
Total current liabilities
    
13,546,412
   
15,394,032
 
               
Long-term debt
   
493,569
   
542,109
 
Future income tax liability
    
25,617
   
25,617
 
Site Restoration
    
137,290
   
135,819
 
Total liabilities
    
14,202,888
   
16,097,577
 
               
Minority interest
    
101,906
   
75,141
 
               
Shareholders' equity
              
Capital stock (Note 4)
    
43,339,132
   
43,339,132
 
Deficit
    
(36,160,056
)
  
(36,249,254
)
Total shareholders' equity
  
$
7,179,076
 
$
7,089,878
 
               
   
$
21,483,870
 
$
23,262,596
 
               
               
The accompanying notes to the financial statements are an integral part of these financial statements
              
 

 
     
 


           
           
EnerNorth Industries Inc.
          
Consolidated Statements of Income and Deficit
          
(Unaudited)
          
(Expressed in Canadian dollars)
          
   
For the three
  
   
month period
  
   
ending September 30
  
     
2004
    
2003
  
               
               
Sales
  
$
7,059,125
 
$
6,952,262
 
Cost of sales (including
             
depreciation and depletion of
              
$189,549; 2003 - $160,352)
    
6,047,030
   
5,956,197
 
Gross profit
    
1,012,095
   
996,065
 
               
Administrative expenses
    
1,278,128
   
884,664
 
Amortization of capital assets
    
34,578
   
33,661
 
Interest
    
23,309
   
22,995
 
Interest on long-term debt
    
12,258
   
13,209
 
     
1,348,273
   
954,529
 
Income (loss) before the following
    
(336,178
)
  
41,536
 
               
Oakwell claim
    
341,123
   
-
 
Other income
   
111,018
   
133,538
 
               
Net income before tax and minority interest
  
$
115,963
 
$
175,074
 
               
Income taxes
              
Future (net of valuation provision)
    
-
   
66,528
 
Utilization of loss carryforwards
    
-
   
(66,528
)
-
         
-
 
               
Net income before minority interest
  
$
115,963
 
$
175,074
 
               
Minority interest
    
26,765
   
-
 
               
Net income
  
$
89,198
 
$
175,074
 
               
Deficit, beginning of period
    
(36,249,254
)
  
(32,085,526
)
Deficit, end of period
    
($36,160,056
)
  
($31,910,452
)
               
               
Net income per Common Share
              
Net income per share
  
$
0.02
 
$
0.04
 
Weighted average common shares
              
outstanding (thousands)
    
4,059
   
4,059
 
               
Fully Diluted net income per Common Share
              
Net income per share
  
$
0.02
 
$
0.04
 
               
The accompanying notes to the financial statements are an integral part of these financial statements
              
 

 
     
 


           
           
EnerNorth Industries Inc.
          
Consolidated Statements of Cash Flows
          
(Unaudited)
          
(Expressed in Canadian dollars)
          
   
For the three month period
  
   
ending September 30
  
     
2004
    
2003
  
               
 
              
Cash provided by (used in)
              
               
Operating activities
              
Net income
 
$
89,198
 
$
175,074
 
Adjustments to reconcile net income to
              
net cash provided by operating activities
              
Amortization and depletion
    
224,127
   
194,013
 
Oakwell claim
    
(341,123
)
  
-
 
Unrealized foreign exchange loss on investment
    
102,004
   
-
 
Minority Interest
    
26,765
       
Gain on sale of marketable securities
    
-
   
(14,628
)
     
100,971
   
354,459
 
Net change in non-cash working capital
              
Receivables
    
1,004,170
   
1,530,845
 
Inventories and unbilled revenue
    
543,289
   
1,724,425
 
Prepaid expenses
    
638,411
   
6,105
 
Accounts payable and accrued liabilities
    
(189,455
)
  
(2,686,635
)
Deferred revenue
    
(343,863
)
  
(57,970
)
     
1,753,523
   
871,229
 
               
Financing activities
              
Bank indebtedness
    
(973,179
)
  
(747,014
)
Repayment of long term debt
    
(48,540
)
  
(46,212
)
Repayment to shareholders
    
-
   
(247,743
)
     
(1,021,719
)
  
(1,040,969
)
     
       
Investing activities
              
Purchase of capital assets
   
(22,076
)
  
(36,108
)
Oil and gas interests
    
(160,746
)
  
(627,975
)
Due from co-venturer
    
(407,079
)
  
(99,053
)
Marketable securities
    
-
   
(203,107
)
     
(589,901
)
  
(966,243
)
               
Increase (decrease) in cash
    
141,903
   
(1,135,983
)
Cash, beginning of period
    
600,313
   
6,729,283
 
Cash, end of period
  
$
742,216
 
$
5,593,300
 
               
               
Cash, end of period consists of:
              
Cash
  
$
742,216
 
$
2,798,875
 
Money market funds
    
-
 
$
2,794,425
 
               
The accompanying notes to the financial statements are an integral part of these financial statements
        


 

 
     
 

EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Three Month Period Ending September 30, 2004
(Expressed in Canadian Dollars)
 

1. Basis of Presentation
 
These unaudited interim consolidated financial statements have been prepared by management following the same accounting policies and methods of computation as the audited consolidated financial statements for the year ended June 30, 2004. These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements together with notes for the year ended June 30, 2004. The unaudited consolidated financial results for the three month period ending September 30, 2004 and 2003 include the accounts of the Company and its wholly owned subsidiaries M&M Engineering Limited ("M&M") and its wholly owned subsidiary M&M Offshore Limited ("MMO"), 10915 Newfoundland Limited, 11123 Newfoundland Limited, it’s partnership Liannu LLP ("Liannu") and the proportionate share of its interests in joint ventures whose business focus is construction mechanical contracting and steel fabrication in Newfoundland. Minority interest represents the net residual interest in the equity of the partnership that belongs to the Company’s other partners in Liannu. Operating results for the three months ended September 30, 2004 are not indicative of the results that may be expected for the full year ending June 30, 2005.
 
These consolidated financial statements have been prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business.
 
The Company’s ability to continue as a going concern is primarily dependent upon the enforceability of the Oakwell Claim (see Note 21 of the Company’s Audited Annual Financial Statements). If the application of the Judgment becomes enforceable in Canada then there would be a material and adverse impact on the Company’s financial condition.
 
These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company not be able to continue in the normal course of operations. If the "going concern" assumption is not appropriate for these consolidated financial statements then adjustments may be necessary to the carrying value of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.
 
These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in Canada.
 
2.   Segmented information
 
The Company's operations are separated into two distinct segments; the Industrial & Offshore Division, consisting of the consolidated operations of M&M Engineering Limited, a wholly owned subsidiary, and the Oil & Gas Division performing oil and gas exploration and production. M&M is an industrial contracting company performing fabrication and installation of process piping, installation of production equipment, steel tank erection, specialized welding services and industrial maintenance. Results for the three month periods ending September 30, 2004 and September 30, 2003 are presented in the Consolidated Statements of Segmented Information below:

For the three months ending September 30, 2004
                  
                   
                   
 
    Industrial & Offshore     
Oil & Gas
    
Corporate
    
Total
  
                           
Revenue
    
6,895,715
   
163,410
   
-
   
7,059,125
 
Interest expense
    
35,317
   
-
   
250
   
35,567
 
Amortization and depletion
    
80,543
   
143,584
   
-
   
224,127
 
Net earnings (loss)
   
302,933
   
19,826
   
(233,561
)
  
89,198
 
Capital assets and
                         
oil and gas interests
    
3,214,071
   
3,769,450
   
-
   
6,983,521
 
                           
                           
For the three months ending September 30, 2003
                          
                           
    Industrial & Offshore      
Oil & Gas
    
Corporate
    
Total
  
                           
Revenue
    
6,820,024
   
132,238
   
-
   
6,952,262
 
Interest expense
    
35,691
   
-
   
513
   
36,204
 
Amortization and depletion
    
83,048
   
110,965
   
-
   
194,013
 
Net earnings (loss)
    
360,450
   
(68,543
)
  
(116,833
)
  
175,074
 
Capital assets and
                         
oil and gas interests
    
3,150,253
   
3,150,253
   
-
   
6,300,506
 
                           
The accompanying notes to the financial statements are an integral part of these financial statements
                          

 
     
 


EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Three Month Period Ending September 30, 2004
(Expressed in Canadian Dollars)
 
3.   Related Party Transactions
 
a)   At June 30, 2004 a director of the Company was awarded $42,000 as compensation.
 
b)   During the three month period ending September 30, 2003 a director of the Company was paid US$5,000 (approximately Cdn$4,000) under a nine month consulting agreement that commenced September 1, 2003.
 
c)   During the three month period ending September 30, 2003 the Company repaid $247,743 to a shareholder and a director of the Company.
 
d)   Included in accounts receivable at September 30, 2004 are advances due from an officer of the Company’s subsidiary in the amount of $4,623 (2003 - $10,588).
 
These transactions were in the normal course of business and were measured at the exchange amount.
 


2.   Share Capital
(a)   Authorized and Issued:

Authorized:   
Unlimited number of Common Shares, without par value
Unlimited number of Class A Preference Shares, Series I
Unlimited number of Class A Preference Shares, Series II

Issued
Common shares
 
#
Consideration
Balance, as at June 30, 2004
4,059,009
$43,339,132
     
Balance, as at September 30, 2004
4,059,009
$43,339,132

(b)   Common share purchase warrants outstanding consist of the following:

Exercise
Expiry
2004
2003
Price
Date
#
#
US$ 1.80
December 31, 2004
533,332
533,332
   
533,332
533,332

(c)   There were no Common share purchase options outstanding at September 30, 2004 and 2003.