-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IP71TCDfPIWcxXRglTGDHGXRmXq1lufIH+l4VivW5w7lBGInVKygXAO+MkXC9k91 uobyGYyEaD4VvfO2xRAbtA== 0001116502-02-001725.txt : 20021114 0001116502-02-001725.hdr.sgml : 20021114 20021114122704 ACCESSION NUMBER: 0001116502-02-001725 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHINA RESOURCES DEVELOPMENT INC CENTRAL INDEX KEY: 0000793628 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MISCELLANEOUS NONDURABLE GOODS [5190] IRS NUMBER: 970263643 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-26046 FILM NUMBER: 02823183 BUSINESS ADDRESS: STREET 1: ROOM 2105 WEST TOWER SHUN TAK CENTRE STREET 2: 168-200 CONNAUGHT ROAD CENTRAL CITY: SHEUNG WAN HONG KONG BUSINESS PHONE: 011-852-28 MAIL ADDRESS: STREET 1: C/O BAKER & HOSTETLER STREET 2: P O BOX 112 CITY: ORLANDO STATE: FL ZIP: 32802 FORMER COMPANY: FORMER CONFORMED NAME: MAGENTA CORP DATE OF NAME CHANGE: 19940217 10QSB 1 chinaresources-10qsb.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter period ended September 30, 2002 [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ___________ to _____________ CHINA RESOURCES DEVELOPMENT, INC. (Exact Name of registrant as Specified in Charter) Nevada 0-26046 87-02623643 (State or other Jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) Room 2105, West Tower, Shun Tak Centre, 200 Connaught Road C., Sheung Wan, Hong Kong Telephone: 011-852-2810-7205 (Address and telephone number of principal executive offices) 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 requirements for the past 90 days. Yes X No ------ ------ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 837,823 shares of common stock, $0.001 par value, as of November 14, 2002. CONVENTIONS Unless otherwise specified, all references in this report to "U.S. Dollars," "Dollars," "US$," or "$" are to United States dollars; all references to "Hong Kong Dollars" or "HK$" are to Hong Kong dollars; and all references to "Renminbi" or "RMB" or "Yuan" are to Renminbi Yuan, which is the lawful currency of the People's Republic of China ("China" or "PRC"). The Company and Billion Luck maintain their accounts in U.S. Dollars and Hong Kong Dollars, respectively. HARC and its subsidiaries maintain their accounts in Renminbi. The financial statements of the Company and its subsidiaries are prepared in Renminbi. Translations of amounts from Renminbi to U.S. Dollars and from Hong Kong Dollars to U.S. Dollars are for the convenience of the reader. Unless otherwise indicated, any translations from Renminbi to U.S. Dollars or from U.S. Dollars to Renminbi have been made at the single rate of exchange as quoted by the People's Bank of China (the "PBOC Rate") on September 30, 2002, which was approximately U.S.$1.00 = Rmb8.28. Translations from Hong Kong Dollars to U.S. Dollars have been made at the single rate of exchange as quoted by the Hongkong and Shanghai Banking Corporation Limited on September 30, 2002, which was approximately US$1.00 = HK$7.80. The Renminbi is not freely convertible into foreign currencies and the quotation of exchange rates does not imply convertibility of Renminbi into U.S. Dollars or other currencies. All foreign exchange transactions take place either through the Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People's Bank of China. No representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the PBOC Rate or at all. References to "Billion Luck" are to Billion Luck Company Ltd., a British Virgin Islands company, which is a wholly-owned subsidiary of the Company. References to "Company" are to China Resources Development, Inc., and include, unless the context requires otherwise, the operations of its subsidiaries (all as hereinafter defined). References to "Farming Bureau" are to the Hainan Agricultural Reclamation General Company, a division of the Ministry of Agriculture, the PRC government agency responsible for matters relating to agriculture. References to "Hainan" are to Hainan Province of the PRC. References to "HARC" are to Hainan Cihui Industrial Company Limited (formerly known as Hainan Zhongwei Agricultural Resources Company Limited), a company organized in the PRC, and is a wholly-owned subsidiary of the Company. References to the "PRC" or "China" include all territory claimed by or under the control of the Central Government, except Hong Kong, Macau, and Taiwan. 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) (UNAUDITED) FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Amounts in thousands, except share and per share data)
Three Months Ended September 30, Nine Months Ended September 30, ---------------------------------- ---------------------------------- 2002 2001 2002 2002 2001 2002 -------- -------- -------- -------- -------- -------- RMB RMB US$ RMB RMB US$ NET SALES 1,983 2,750 239 5,479 8,777 662 COST OF SALES (1,756) (2,691) (212) (4,771) (8,324) (576) -------- -------- -------- -------- -------- -------- GROSS PROFIT 227 59 27 708 453 86 DEPRECIATION (224) (249) (27) (636) (654) (77) AMORTIZATION -- (1,550) -- -- (5,078) -- SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,583) (3,799) (312) (8,454) (11,635) (1,021) FINANCIAL INCOME/ (EXPENSES), NET 140 308 17 567 856 68 OTHER INCOME/(EXPENSES), NET (146) (1,003) (17) (4,659) (7,188) (563) -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (2,586) (6,234) (312) (12,474) (23,246) (1,507) INCOME TAXES -- -- -- -- (1,262) -- -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS (2,586) (6,234) (312) (12,474) (24,508) (1,507) MINORITY INTERESTS -- -- -- -- 1,198 -- -------- -------- -------- -------- -------- -------- LOSS FROM CONTINUING OPERATIONS (2,586) (6,234) (312) (12,474) (23,310) (1,507) DISCONTINUED OPERATIONS Loss from operations of discontinued timber segment -- -- -- -- (24) -- -------- -------- -------- -------- -------- -------- NET LOSS (2,586) (6,234) (312) (12,474) (23,334) (1,507) -------- -------- -------- -------- -------- -------- Other comprehensive income/(loss): foreign currency translation adjustments (3) -- -- 109 15 13 -------- -------- -------- -------- -------- -------- COMPREHENSIVE LOSS (2,589) (6,234) (312) (12,365) (23,319) (1,494) ======== ======== ======== ======== ======== ======== LOSS PER SHARE: basic and diluted Continuing operations (3.09) (7.44) (0.37) (14.89) (27.82) (1.80) Discontinued operations -- -- -- -- (0.03) -- -------- -------- -------- -------- -------- -------- (3.09) (7.44) (0.37) (14.89) (27.85) (1.80) ======== ======== ======== ======== ======== ======== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 837,823 837,823 837,823 837,823 837,823 837,823 ======== ======== ======== ======== ======== ========
See notes to condensed consolidated financial statements. 3 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2002 AND DECEMBER 31, 2001 (Amounts in thousands, except share and per share data)
September 30, December 31, September 30, 2002 2001 2002 RMB RMB US$ Notes (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 2,496 7,627 301 Trading securities 4,168 5,744 504 Inventories - finished goods 623 610 75 Other receivables, deposits and prepayments 853 4,635 103 Short term loans receivable 2 5,618 15,488 679 Amounts due from related companies - 636 - Amounts due from employees 1,276 896 154 ------- -------- ------- TOTAL CURRENT ASSETS 15,034 35,636 1,816 PROPERTY AND EQUIPMENT 3 6,668 7,279 805 INVESTMENTS 109,615 109,615 13,239 VALUE-ADDED TAX RECEIVABLE 4,687 4,687 566 ------- -------- ------- TOTAL ASSETS 136,004 157,217 16,426 ======= ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 302 247 37 Other payables and accrued liabilities 4 7,674 16,569 927 Income taxes 446 454 54 Amounts due to related companies 366 366 44 ------- -------- ------- TOTAL CURRENT LIABILITIES 8,788 17,636 1,062 ------- -------- ------- SHAREHOLDERS' EQUITY Preferred stock, authorized - 10,000,000 shares in 2002 and 2001 Series B preferred stock, US$0.001 par value: Authorized - 320,000 shares Issued and outstanding - 320,000 shares in 2002 and 2001 3 3 - Common stock, US$0.001 par value: Authorized - 200,000,000 shares Issued and outstanding - 837,823 shares in 2002 and 2001 7 7 1 Additional paid-in capital 169,052 169,052 20,417 Reserves 28,028 28,028 3,385 Accumulated deficit (70,034) (57,560) (8,458) Accumulated other comprehensive gains 160 51 19 ------- -------- ------- TOTAL SHAREHOLDERS' EQUITY 127,216 139,581 15,364 ------- -------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 136,004 157,217 16,426 ======= ======== =======
Note: The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See notes to condensed consolidated financial statements. 4 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Amounts in thousands)
Nine months ended September 30, ------------------------------- 2002 2001 2002 ---- ---- ---- RMB RMB US$ Net cash used in operating activities (14,964) (29,957) (1,807) ------- ------- ------ INVESTING ACTIVITIES Purchases of property and equipment (25) (123) (3) Proceeds from disposal of investments - 59,145 - Acquisition of additional interest in a subsidiary - (36,478) - Advances of short term loans to third parties (12,190) (20,140) (1,472) Repayments of short term loans from third parties 22,048 - 2,662 ------- ------- ------ Net cash provided by investing activities 9,833 2,404 1,187 ------- ------- ------ FINANCING ACTIVITIES Advance of short term loan from a third party - 3,180 - ------- ------- ------ NET DECREASE IN CASH AND CASH EQUIVALENTS (5,131) (24,373) (620) Cash and cash equivalents, at beginning of period 7,627 37,546 921 ------- ------- ------ Cash and cash equivalents, at end of period 2,496 13,173 301 ======= ======= ======
See notes to condensed consolidated financial statements. 5 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Amounts in thousands, except per share data) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month and nine month periods ended September 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2001. Certain comparative amounts have been reclassified to conform with the current period classifications. 2. SHORT TERM LOANS RECEIVABLE In March 2002, the Company advanced an interest free short term loan of RMB10,600 to an unaffiliated third party. The loan was repaid in April 2002. In addition, the Company advanced short term loans to two unaffiliated third parties of RMB1,272 and RMB318, respectively, in the second quarter of 2002. These two loans bear annual interest rates of 10%. Short term loans amounting to RMB11,448, which were advanced to three unaffiliated third parties in 2001, were repaid in 2002. 3. PROPERTY AND EQUIPMENT
September 30, December 31, 2002 2001 RMB RMB At cost: Buildings 4,260 4,260 Machinery, equipment and motor vehicles 4,149 4,124 Fixtures and furniture 208 208 ------ ------ 8,617 8,592 Accumulated depreciation (1,949) (1,313) ------ ------ 6,668 7,279 ====== ======
6 4. OTHER PAYABLES AND ACCRUED LIABILITIES
September 30, December 31, 2002 2001 RMB RMB Advances from a former vice president - 11,298 Accrued salary of a director 1,393 1,106 Other payables 3,298 1,368 Accrued liabilities 2,983 2,797 ------ ------ 7,674 16,569 ====== ======
5. SEGMENT FINANCIAL INFORMATION
Three months ended Nine months ended September 30, September 30, 2002 2001 2002 2001 RMB RMB RMB RMB Net sales: Supermarket operations, net sales to unaffiliated customers 1,983 1,860 5,479 4,702 Natural rubber, net sales to unaffiliated customers - 890 - 4,075 ------ ------ ------- ------ Total consolidated net sales 1,983 2,750 5,479 8,777 ====== ====== ====== ====== Segment profit/(loss): Supermarket operations 88 121 312 335 Natural rubber - (681) - (1,699) ------ ------ ------- ------ Total segment income/(loss) 88 (560) 312 (1,364) Reconciling items: Corporate expenses (2,814) (5,982) (13,353) (22,738) Interest income 140 379 567 1,156 Interest expense - (71) - (300) ------ ------ ------- ------ Total consolidated loss before income taxes and discontinued operations (2,586) (6,234) (12,474) (23,246) ====== ====== ====== ====== September 30, December 31, 2002 2001 RMB RMB Segment assets: Supermarket operations 7,267 6,895 Natural rubber - - ------- ------- Total segment assets 7,267 6,895 Reconciling items: Corporate assets 19,122 40,707 Investments 109,615 109,615 ------- ------- Total consolidated assets 136,004 157,217 ======= =======
7 6. TRADING SECURITIES Included in other income/(expenses) for the three and nine months ended September 30, 2002 and 2001 are unrealized gains and losses on trading securities of RMB5,992, (RMB2,007), (RMB1,102) and (RMB2,989), respectively. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION NET SALES AND GROSS PROFIT Net sales from supermarket operations increased by 16.5% from RMB4,702,000 (US$568,000) for the nine months ended September 30, 2001 to RMB5,479,000 (US$662,000) for the nine months ended September 30, 2002. For the nine months ended September 30, 2002, supermarket operations had gross profit and gross profit margin of RMB708,000 (US$86,000) and 12.9%, respectively. For the nine months ended September 30, 2001, supermarket operations had gross profit and gross profit margin of RMB628,000 (US$76,000) and 13.3%, respectively. Net sales from supermarket operations increased by 6.6% from RMB1,860,000 (US$225,000) for the third quarter of 2001 to RMB1,983,000 (US$239,000) for the third quarter of 2002. For the third quarter of 2002, supermarket operations had gross profit and gross profit margin of RMB227,000 (US$27,000) and 11.4%, respectively. For the third quarter of 2001, supermarket operations had gross profit and gross profit margin of RMB238,000 (US$29,000) and 12.0%, respectively. The increase in net sales was due to increased sales volume resulting from the successful marketing efforts of the Company and its ability to retain its customers. The increase in net sales was also due to the Company's pricing strategy which slightly reduced the prices of certain popular products in order to attract more customers. The Company periodically engages in the trading of natural rubber, depending on market conditions. The Company had sales of RMB4,075,000 (US$492,000) and RMB890,000 (US$107,000) for the nine months and three months ended September 30, 2001, respectively, with gross loss of RMB175,000 (US$21,000) and RMB179,000 (US$22,000) for the nine months and three months ended September 30, 2001. As a result of the unfavourable market condition, the Company sold all of its rubber inventories in the third quarter of 2001. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the nine months ended September 30, 2002 decreased by RMB3,181,000 (US$384,000) or 27.3% to RMB8,454,000 (US$1,021,000) for the nine months ended September 30, 2002 from RMB11,635,000 (US$1,405,000) for the nine months ended September 30, 2001. The decrease was due to the reduction in personnel and the Company's tightened cost control measures. Selling, general and administrative expenses for the third quarter of 2002 decreased by RMB1,216,000 (US$147,000) or 32.0% to RMB2,583,000 (US$312,000) for the third quarter of 2002 from RMB3,799,000 (US$459,000) for the third quarter of 2001. The decrease was due to the reduction in personnel and the Company's tightened cost control measures. AMORTIZATION Amortization expense for the three and nine months ended September 30, 2001 represented amortization of website technology, acquired on June 30, 2000, which was being amortized on the straight-line basis over two years. The Company wrote off the acquired website technology in 2001. FINANCIAL INCOME, NET Net financial income for the nine months ended September 30, 2002 was RMB567,000 (US$68,000), which primarily represented interest income on short term loans receivable. Net financial income for the nine months ended September 30, 2001 was RMB856,000 (US$103,000), which was comprised of margin loan interest expenses of RMB300,000 (US$36,000) and interest income of RMB1,156,000 (US$140,000) from bank deposits and on short term loans receivable. 9 Net financial income for the third quarter of 2002 was RMB140,000 (US$17,000), which primarily represented interest income on short term loans receivable. Net financial income for the third quarter of 2001 was RMB308,000 (US$37,000), which primarily represented interest income on short term loans receivable, partly offset by the margin loan interest expenses of RMB71,000 (US$9,000). OTHER INCOME/(EXPENSES), NET Net expenses for the nine months ended September 30, 2002 represented a net loss on trading of marketable securities of RMB4,839,000 (US$584,000) offset by arrangement fee income on short term loans of RMB119,000 (US$14,000). Net expenses for the nine months ended September 30, 2001 represented a net gain on trading of marketable securities of RMB6,266,000 (US$757,000) and a premium earned on written call options of RMB3,200,000 (US$386,000), offset by losses recognized on acquisition of minority interest in HARC and disposition of certain assets to the Farming Bureau of RMB16,700,000 (US$2,017,000). Net expenses for the third quarter of 2002 and 2001 represented net loss on trading of marketable securities. INCOME TAXES It is management's intention to reinvest all the income attributable to the Company earned by its operations outside the US. Accordingly, no US federal and state income taxes have been provided in these consolidated financial statements. Income taxes consist of PRC federal income tax computed at 15% on assessable income for foreign investment enterprises operating in Hainan. Income taxes for 2001 consisted of an under provision of PRC federal income taxes on assessable income in 2000 for foreign investment enterprises operating in Hainan. DISCONTINUED OPERATIONS Discontinued operations represented the loss from the operations of the discontinued processed timber business resulting from the exchange of the Company's 58% interest in Hainan Weilin Timber Limited Liability Company as partial consideration for the minority interest of HARC in 2001. LIQUIDITY AND CAPITAL RESOURCES The Company's primary liquidity needs are to fund inventories, operating expenses, and to expand business operations. The Company has financed its working capital requirements primarily through internally generated cash. The Company had a working capital surplus of approximately RMB6,246,000 (US$754,000) as of September 30, 2002, compared to that of approximately RMB18,000,000 (US$2,174,000) as of December 31, 2001. Net cash used in operating activities for the nine months ended September 30, 2002 was approximately RMB14,964,000 (US$1,807,000), as compared to RMB29,957,000 (US$3,618,000) for the corresponding period in 2001. Net cash inflows/outflows from the Company's operating activities are attributable to the Company's net loss and changes in operating assets and liabilities. Net cash provided by investing activities for the nine months ended September 30, 2002 was primarily attributable to advances and repayments of short term loans to/from third parties. Except as disclosed above, there has been no other significant changes in financial condition and liquidity since the fiscal year ended December 31, 2001. The Company believes that internally generated funds will be sufficient to satisfy its anticipated working capital needs for at least the next twelve months. 10 MARKET RISK AND RISK MANAGEMENT POLICIES All of the Company's sales and purchases are made domestically and are denominated in RMB. Accordingly, the Company and its subsidiaries do not have material market risk with respect to currency fluctuation. As the reporting currency of the Company's consolidated financial statements is also RMB, there is no significant translation difference arising on consolidation. However, the Company may suffer exchange loss when it converts RMB to other currencies, such as Hong Kong Dollar or United States Dollar. The Company's interest income is most sensitive to changes in the general level of RMB interest rates. In this regard, changes in RMB interest rates affect the interest earned on the Company's cash equivalents. At September 30, 2002, the Company's cash equivalents are mainly RMB, Hong Kong Dollar and United States Dollar deposits with financial institutions, bearing market interest rates without fixed term. At September 30, 2002, the Company had short-term investments in trading securities in the Hong Kong and United States stock markets with a total market value of RMB4,168,000 (US$504,000). These investments expose the Company to market risks that may cause the future value of these investments to be lower than the original cost of such investments. 11 ITEM 3. CONTROLS AND PROCEDURES On November 14, 2002, the Company's management concluded its evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. As of the Evaluation Date, the Company's Chief Executive Officer and its Chief Financial Officer concluded that the Company maintains disclosure controls and procedures that are effective in providing reasonable assurance that information required to be disclosed in the Company's reports under the Securities Act of 1934 (Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and its Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date. 12 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS: NONE ITEM 2. CHANGES IN SECURITIES: NONE ITEM 3. DEFAULTS UPON SENIOR SECURITIES: NONE ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: NONE ITEM 5. OTHER INFORMATION: NONE ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) 99.1 Certification of Chief Executive Officer 99.2 Certification of Chief Financial Officer (b) During the three months ended September 30, 2002, the Company filed no current report on Form 8-K. 13 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. CHINA RESOURCES DEVELOPMENT, INC. November 14, 2002 By:/s/ Ching Lung Po ------------------------------------- Ching Lung Po, Chief Executive Officer By:/s/ Tam Cheuk Ho --------------------------------------- Tam Cheuk Ho, Chief Financial Officer 14 CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT - ------------------------------------------------------------------------------ OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ----------------------------------------------------------------------------- I, Ching Lung Po, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of China Resources Development, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report; and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of that date; 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2002 /s/ Ching Lung Po - ------------------------- Chief Executive Officer 15 CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT - ------------------------------------------------------------------------------ OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - ----------------------------------------------------------------------------- I, Tam Cheuk Ho, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of China Resources Development, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report; and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of that date; 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of registrant's board of directors (or persons fulfilling the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 14, 2002 /s/ Tam Cheuk Ho - ------------------------- Chief Financial Officer 16 EX-99.1 3 pocert-991.txt PO CERTIFICATION Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of China Resources Development, Inc. (the "Company") on Form 10-QSB for the quarter ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ching Lung Po, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Ching Lung Po - ------------------------ Ching Lung Po Chief Executive Officer November 14, 2002 EX-99.2 4 hocert-992.txt HO CERTIFICATION Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of China Resources Development, Inc. (the "Company") on Form 10-QSB for the quarter ended September 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Tam Cheuk Ho, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Tam Cheuk Ho - ----------------------- Tam Cheuk Ho Chief Financial Officer November 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----