-----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, IYgy1VEBYbUwfMv4X0t3wPptSm5W5XJofkeY8tDhuD73rDv2hmEN0M1feUJJHkMa AWM2dgGh7h8kZtF8uUCQiQ== 0001116502-03-000932.txt : 20030520 0001116502-03-000932.hdr.sgml : 20030520 20030520160118 ACCESSION NUMBER: 0001116502-03-000932 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030520 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: 03712586 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 March 31, 2003 -------------- [ ] 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, $0.001 par value, as of May 20, 2003. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (Amounts in thousands, except share and per share data) Three Months Ended March 31, ---------------------------- 2003 2002 2003 -------- -------- -------- RMB RMB US$ NET SALES 2,202 1,714 266 COST OF SALES (2,001) (1,465) (242) -------- -------- -------- GROSS PROFIT 201 249 24 DEPRECIATION (215) (211) (26) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (2,563) (3,024) (309) FINANCIAL INCOME, NET 174 282 21 OTHER (EXPENSE)/INCOME, NET (34) 411 (4) -------- -------- -------- LOSS BEFORE INCOME TAXES (2,437) (2,293) (294) INCOME TAXES -- -- -- -------- -------- -------- NET LOSS (2,437) (2,293) (294) -------- -------- -------- Other comprehensive income/(loss): foreign currency translation adjustments -- 110 -- -------- -------- -------- COMPREHENSIVE LOSS (2,437) (2,183) (294) ======== ======== ======== LOSS PER SHARE: basic and diluted (2.91) (2.74) (0.35) ======== ======== ======== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 837,823 837,823 837,823 ======== ======== ======== See notes to condensed consolidated financial statements. 2 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2003 AND DECEMBER 31, 2002 (Amounts in thousands, except share and per share data)
March 31, December 31, March 31, 2003 2002 2003 RMB RMB US$ Notes (Unaudited) (Note) (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 5,377 4,082 649 Trading securities 1,663 1,185 201 Inventories - finished goods 679 649 82 Other receivables, deposits and prepayments 3,958 6,916 478 Short term loans receivable 3,498 3,498 423 Amounts due from employees 25 190 3 -------- -------- -------- TOTAL CURRENT ASSETS 15,200 16,520 1,836 PROPERTY AND EQUIPMENT 2 6,255 6,468 755 INVESTMENTS 63,000 63,000 7,609 VALUE-ADDED TAX RECEIVABLE 2,735 3,124 330 -------- -------- -------- TOTAL ASSETS 87,190 89,112 10,530 ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 237 256 28 Other payables and accrued liabilities 3 9,518 8,984 1,150 Income taxes 50 50 6 Amounts due to related companies 366 366 44 -------- -------- -------- TOTAL CURRENT LIABILITIES 10,171 9,656 1,228 -------- -------- -------- SHAREHOLDERS' EQUITY Preferred stock, authorized - 10,000,000 shares in 2003 and 2002 Series B preferred stock, US$0.001 par value: Authorized - 320,000 shares Issued and outstanding - 320,000 shares in 2003 and 2002 3 3 -- Common stock, US$0.001 par value: Authorized - 200,000,000 shares Issued and outstanding - 837,823 shares in 2003 and 2002 7 7 1 Additional paid-in capital 169,052 169,052 20,417 Reserves 28,028 28,028 3,385 Accumulated deficit (120,229) (117,792) (14,520) Accumulated other comprehensive gains 158 158 19 -------- -------- -------- TOTAL SHAREHOLDERS' EQUITY 77,019 79,456 9,302 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 87,190 89,112 10,530 ======== ======== ========
Note: The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See notes to condensed consolidated financial statements. 3 CHINA RESOURCES DEVELOPMENT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002 (Amounts in thousands)
Three months ended March 31, --------------------------------- 2003 2002 2003 ------- ------- ------- RMB RMB US$ Net cash provided by operating activities 1,297 56 156 ------- ------- ------- INVESTING ACTIVITIES Purchases of property and equipment (2) (4) -- Advances of short term loans to third parties -- (10,600) -- Repayments of short term loans from third parties -- 9,116 -- ------- ------- ------- Net cash (used in)/provided by investing activities (2) 1,488 -- ------- ------- ------- NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,295 (1,432) 156 Cash and cash equivalents, at beginning of period 4,082 7,627 493 ------- ------- ------- Cash and cash equivalents, at end of period 5,377 6,195 649 ======= ======= =======
See notes to condensed consolidated financial statements. 4 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 period ended March 31, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. The balance sheet at December 31, 2002 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-KSB for the year ended December 31, 2002. For the convenience of the reader, amounts in Renminbi ("RMB") have been translated into United States dollars ("US$") at the rate of US$1.00 = RMB8.28 quoted by the People's Bank of China as at March 31, 2003. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate. Certain comparative amounts have been reclassified to conform with the current period classifications. 2. PROPERTY AND EQUIPMENT
March 31, December 31, 2003 2002 RMB RMB At cost: Buildings 4,260 4,260 Machinery, equipment and motor vehicles 4,146 4,144 Fixtures and furniture 219 219 ------- ------- 8,625 8,623 Accumulated depreciation (2,370) (2,155) ------- ------- 6,255 6,468 ======= =======
5 3. OTHER PAYABLES AND ACCRUED LIABILITIES
March 31, December 31, 2003 2002 RMB RMB Advances from a company owned by a former vice president 4,637 3,710 Accrued salaries of a director 1,318 1,488 Other payables 886 1,674 Accrued liabilities 2,677 2,112 ------ ------ 9,518 8,984 ====== ======
4. TRADING SECURITIES Included in other income/(expenses) for the three months ended March 31, 2003 and 2002 are unrealized losses on trading securities of (RMB151) and (RMB270), respectively. 5. SUBSEQUENT EVENT Pursuant to an agreement dated April 22, 2003, the Company disposed of its entire interest in Zhuhai Zhongwei Development Company Ltd. ("Zhuhai Zhongwei") to a third party affiliated with a former vice president. The Company recognized a gain of approximately RMB366 (US$44,000) from the disposition which will be recorded in the second quarter of 2003. The sales price was RMB6,000 (US$724,600) of which RMB4,600 (US$555,500) was offset against amounts due to a company owned by the former vice president. The remaining RMB1,400 (US$169,100) is due from the purchaser. Following the disposition, the Company has ceased supermarket operations. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION NET SALES AND GROSS PROFIT Net sales from supermarket operations for the first quarter of 2003 were RMB1,758,000 (US$212,000) which was comparable to RMB1,714,000 (US$207,000) for the first quarter of 2002. For the first quarter of 2003, supermarket operations had a gross profit and a gross profit margin of RMB201,000 (US$24,000) and 11.4%, respectively. For the first quarter of 2002, supermarket operations had a gross profit and a gross profit margin of RMB249,000 (US$30,000) and 14.5%, respectively. The decrease in gross profit margin was due to keen competition in Zhuhai. The Company periodically trades copper and sales for the first quarter of 2003 were RMB444,000 (US$54,000) with zero gross profit margin. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses decreased by RMB461,000 (US$56,000) or 15.2% to RMB2,563,000 (US$309,000) for the first quarter of 2003 from RMB3,024,000 (US$365,000) for the first quarter of 2002. The decrease was mainly due to the reduction of salary payable to the Company's CEO by approximately RMB509,000 (US$61,000) and the reduction of legal and professional fees, which was partly offset by the valuation allowance on VAT receivables of RMB389,000 (US$47,000) provided in the first quarter of 2003. FINANCIAL INCOME, NET Net financial income decreased by RMB108,000 (US$13,000) or 38.3% to RMB174,000 (US$21,000) for the first quarter of 2003 from RMB282,000 (US$34,000) for the first quarter of 2002. The decrease was mainly due to the decrease in short term loans to unaffiliated third parties. OTHER (EXPENSE)/INCOME, NET Other (expense)/income, net for the first quarter of 2003 mainly included a net loss on trading of marketable securities of RMB59,000 (US$7,000). Net income for the first quarter of 2002 represented a net loss on trading of marketable securities of RMB77,000 (US$9,000) offset by the premium earned on written put options of RMB488,000 (US$59,000). INCOME TAXES It is management's intention to reinvest all income attributable to the Company earned by its operations outside the US. Accordingly, no US corporation income taxes are included in these consolidated financial statements. Under the current laws of the BVI, dividends and capital gains arising from the Company's investments in the BVI are not subject to income taxes and no withholding tax is imposed on payments of dividends to the Company. LIQUIDITY AND CAPITAL RESOURCES The Company's primary liquidity needs are to fund 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 RMB5,029,000 (US$607,000) as of March 31, 2003, compared to that of approximately RMB6,864,000 (US$829,000) as of December 31, 2002. Net cash provided by operating activities for the three months ended March 31, 2003 was approximately RMB1,297,000 (US$156,000), as compared to RMB56,000 (US$7,000) for the corresponding period in 2002. 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 three months ended March 31, 2002 was primarily attributable to advances and repayments of short term loans to/from third parties. 7 Except as disclosed above, there have been no other significant changes in financial condition and liquidity since the fiscal year ended December 31, 2002. The Company believes that internally generated funds will be sufficient to satisfy its anticipated working capital needs for at least the next twelve months. 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 the 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 March 31, 2003, 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 March 31, 2003, the Company had short-term investments in trading securities in the Hong Kong and United States stock markets with a total market value of RMB1,663,000 (US$201,000). 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. SUBSEQUENT EVENT Pursuant to an agreement dated April 22, 2003, the Company disposed of its entire interest in Zhuhai Zhongwei Development Company Ltd. ("Zhuhai Zhongwei") to a third party affiliated with a former vice president. The Company recognized a gain of approximately RMB366,000 (US$44,000) from the disposition which will be recorded in the second quarter of 2003. The sales price was RMB6 million (US$724,600) of which RMB4.6 million (US$555,500) was offset against amounts due to a company owned by the former vice president. The remaining RMB1.4 million (US$169,100) is due from the purchaser. Following the disposition, the Company has ceased supermarket operations. 8 ITEM 3. CONTROLS AND PROCEDURES On May 20, 2003, 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. 9 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 10.15 Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Development Co. Ltd. dated April 22, 2003 by and between HARC and Li Qing Quan (Certified English translation of original Chinese version filed herewith.) 10.16 Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Development Co. Ltd. dated April 22, 2003 by and between Lin Jia Ping and Li Qing Quan (Certified English translation of original Chinese version filed herewith.) 99.1 Certification of Chief Executive Officer 99.2 Certification of Chief Financial Officer During the three months ended March 31, 2003, the Company filed no current report on Form 8-K. 10 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. May 20, 2003 By:/s/ Ching Lung Po -------------------------------------- Ching Lung Po, Chief Executive Officer By:/s/ Tam Cheuk Ho -------------------------------------- Tam Cheuk Ho, Chief Financial Officer 11 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: May 20, 2003 /s/ Ching Lung Po - ------------------------ Chief Executive Officer 12 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: May 20, 2003 /s/ Tam Cheuk Ho - ------------------------ Chief Financial Officer 13 EX-10.15 3 harcagreement-shares.txt SALE AND PURCHASE OF SHARES AGREEMENT EXHIBIT 10.15 AGREEMENT FOR THE SALE AND PURCHASE OF SHARES IN ZHUHAI ZHONGWEI DEVELOPMENT CO. LTD. This Agreement is made and entered into by and between: The Seller: Hainan Cihui Industrial Co. Ltd. Legal representative : Mr. Ching Lung Po The Purchaser : Mr. Li Qing Quan WHEREAS the Seller owns 5,400,000 shares, representing 90% of the total issued and outstanding share capital of Zhuhai Zhongwei Development Co. Ltd. (the "Company") and desires to sell all of and the Purchaser desires to purchase all of such share capital. NOW IT IS HEREBY AGREED AS FOLLOWS:- ARTICLE I SALE AND PURCHASE Upon and subject to the terms and conditions of this Agreement, the Seller shall sell and the Purchaser shall purchase 5,400,000 shares of the Company (the "Shares") held by the Seller. ARTICLE II EFFECTIVE DATE This Agreement shall be effective on January 1, 2003 and shall be binding on all parties to this Agreement. ARTICLE III PURCHASE PRICE The consideration for the Shares shall be RMB5,400,000 (the "Purchase Price") and shall be payable within one month from the date of this Agreement. The Shares shall include all rights and interests attached to the Shares from the Effective Date. ARTICLE IV COMPLETION OF TRANSFER The transfer of Shares shall take place at the headquarters of the Company, except otherwise agreed by all parties concerned, the following business shall be completed:- (1) The Seller shall deliver or procure the delivery to the Purchaser the following document: (A) the share certificate for the Shares ; and (B) the written resignation of all directors nominated by the Seller. (2) The Seller shall procure that a board meeting of the Company be held to adopt the following resolutions:- (A) appoint the nominees of the Purchaser as directors; (B) approve the resignation submitted by the directors nominated by the Seller and (C) approve the registration of the transfer of Shares on the shareholders register. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER 1 The Seller is a legal person duly organized and validly existing under the laws of the People's Republic of China. The Seller has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder. 2 The Seller shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Seller. 3 The Shares are validly issued, outstanding, fully paid and nonassessable. All related stamp duty has been paid. The Shares are free and clear of all liens, security interests, pledges or encumbrances of any kind. 4 The execution by the Seller of this Agreement and the performance by the Seller of its responsibility under this Agreement: (A) shall not breach any articles of association or other comparable corporate charter documents of the Seller and the Company; (B) shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Seller and the Company or any of their assets and properties. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 1 The Purchaser has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder. 2 The Purchaser shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Purchaser. 3 The execution by the Purchaser of this Agreement and the performance by the Purchaser of its responsibility under this Agreement: (A) shall not breach any articles of association or other comparable corporate charter documents of the Purchaser; (B) shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Purchaser or any of its assets and properties. ARTICLE VII CONTINUING PERFORMANCE 1 Both the Seller and the Purchaser shall execute and perform and cause or procure to execute and perform all such other documents, acts and things as may be required by or incidental to the preparation, execution, completion and performance of this Agreement and the documents and transactions contemplated hereby. 2 After the completion of the transfer, all provisions hereof shall, so far as they remain capable of being performed or observed, continue in full force. ARTICLE VIII LAW AND JURISDICTION 1 This Agreement is governed by and shall be construed in accordance with the laws of the People's Republic of China. 2 The parties irrevocably submit to the exclusive jurisdiction of the courts of the People's Republic of China. 2 ARTICLE IX MISCELLANEOUS 1 This Agreement supersedes all prior discussion and agreements between the parties hereto with respect to the subject matter hereof and contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof. 2 The heading used in this Agreement have been inserted for convenience of reference only and do not define or limit the provision hereof. 3 This Agreement shall be executed in required number of counterparts, each of which shall be deemed an original. Dated this 22nd day of April, 2003. The Seller: Hainan Cihui Industrial Co. Ltd. By: /s/Ching Lung Po - --------------------- Ching Lung Po The Purchaser: By: /s/Li Qing Quan - --------------------- Li Qing Quan 3 Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Development Co. Ltd. by and between HARC and Li Qing Quan dated April 22, 2003 (Certified English translation of original Chinese version) The undersigned officer of China Resources Development, Inc. hereby certifies that the foregoing is a fair and accurate English translation of the original Chinese version of the Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Develoment Co. Ltd. by and between HARC and Li Qing Quan dated April 22, 2003. /s/ Wong Wah On ---------------------------------------------- Wong Wah On, Director and Financial Controller 4 EX-10.16 4 pingagreement-shares.txt SALE AND PURCHASE OF SHARES AGREEMENT EXHIBIT 10.16 AGREEMENT FOR THE SALE AND PURCHASE OF SHARES IN ZHUHAI ZHONGWEI DEVELOPMENT CO. LTD. This Agreement is made and entered into by and between: The Seller: Mr. Lin Jia Ping The Purchaser: Mr. Li Qing Quan WHEREAS the Seller owns 600,000 shares, representing 10% of the total issued and outstanding share capital of Zhuhai Zhongwei Development Co. Ltd. (the "Company") and desires to sell all of and the Purchaser desires to purchase all of such share capital. NOW IT IS HEREBY AGREED AS FOLLOWS:- ARTICLE I SALE AND PURCHASE Upon and subject to the terms and conditions of this Agreement, the Seller shall sell and the Purchaser shall purchase 600,000 shares of the Company (the "Shares") held by the Seller. ARTICLE II EFFECTIVE DATE This Agreement shall be effective on January 1, 2003 and shall be binding on all parties to this Agreement. ARTICLE III PURCHASE PRICE The consideration for the Shares shall be RMB600,000 (the "Purchase Price") and shall be payable within one month from the date of this Agreement. The Shares shall include all rights and interests attached to the Shares from the Effective Date. ARTICLE IV COMPLETION OF TRANSFER The transfer of Shares shall take place at the headquarters of the Company, except otherwise agreed by all parties concerned, the following business shall be completed:- (1) The Seller shall deliver or procure the delivery to the Purchaser the following document: (A) the share certificate for the Shares ; and (B) the written resignation of all directors nominated by the Seller. (2) The Seller shall procure that a board meeting of the Company be held to adopt the following resolutions:- (A) appoint the nominees of the Purchaser as directors; (B) approve the resignation submitted by the directors nominated by the Seller and (C) approve the registration of the transfer of Shares on the shareholders register. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER 1 The Seller has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder. 2 The Seller shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Seller. 3 The Shares are validly issued, outstanding, fully paid and nonassessable. All related stamp duty has been paid. The Shares are free and clear of all liens, security interests, pledges or encumbrances of any kind. 4 The execution by the Seller of this Agreement and the performance by the Seller of its responsibility under this Agreement: (A) shall not breach any articles of association or other comparable corporate charter documents of the Seller and the Company; (B) shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Seller and the Company or any of their assets and properties. ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 1 The Purchaser has full corporate power and authority to execute this Agreement and to perform its responsibility hereunder. 2 The Purchaser shall execute and to perform its responsibility of this Agreement. The execution of this Agreement shall be duly and validly authorized, and shall be legally enforceable against the Purchaser. 3 The execution by the Purchaser of this Agreement and the performance by the Purchaser of its responsibility under this Agreement: (A) shall not breach any articles of association or other comparable corporate charter documents of the Purchaser; (B) shall not breach any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or contract or agreement applicable to the Purchaser or any of its assets and properties. ARTICLE VII CONTINUING PERFORMANCE 1 Both the Seller and the Purchaser shall execute and perform and cause or procure to execute and perform all such other documents, acts and things as may be required by or incidental to the preparation, execution, completion and performance of this Agreement and the documents and transactions contemplated hereby. 2 After the completion of the transfer, all provisions hereof shall, so far as they remain capable of being performed or observed, continue in full force. ARTICLE VIII LAW AND JURISDICTION 1 This Agreement is governed by and shall be construed in accordance with the laws of the People's Republic of China. 2 The parties irrevocably submit to the exclusive jurisdiction of the courts of the People's Republic of China. ARTICLE IX MISCELLANEOUS 1 This Agreement supersedes all prior discussion and agreements between the parties hereto with respect to the subject matter hereof and contain the sole and entire agreement between the parties hereto with respect to the subject matter hereof. 2 2 The heading used in this Agreement have been inserted for convenience of reference only and do not define or limit the provision hereof. 3 This Agreement shall be executed in required number of counterparts, each of which shall be deemed an original. Dated this 22nd day of April, 2003. The Seller: By: /s/Lin Jia Ping - ---------------------- Lin Jia Ping The Purchaser: By: /s/Li Qing Quan - ---------------------- Li Qing Quan 3 Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Development Co. Ltd. by and between Lin Jia Ping and Li Qing Quan dated April 22, 2003 (Certified English translation of original Chinese version) The undersigned officer of China Resources Development, Inc. hereby certifies that the foregoing is a fair and accurate English translation of the original Chinese version of the Agreement for the Sale and Purchase of Shares in Zhuhai Zhongwei Develoment Co. Ltd. by and between Lin Jia Ping and Li Qing Quan dated April 22, 2003. /s/ Wong Wah On -------------------------------- Wong Wah On, Director and Financial Controller 4 EX-99.1 5 ceocertification.txt CEO CERETIFICATION 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 March 31, 2003 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 May 20, 2003 A signed original of these written statements required by Section 906 has been - ------------------------------------------------------------------------------ provided to China Resources Development, Inc. and will be retained by China - --------------------------------------------------------------------------- Resources Development, Inc. and furnished to the Securities and Exchange - ------------------------------------------------------------------------ Commission or its staff upon request. - ------------------------------------- EX-99.2 6 cfocertification.txt CFO 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 March 31, 2003 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 May 20, 2003 A signed original of these written statements required by Section 906 has been - ------------------------------------------------------------------------------ provided to China Resources Development, Inc. and will be retained by China - --------------------------------------------------------------------------- Resources Development, Inc. and furnished to the Securities and Exchange - ------------------------------------------------------------------------ Commission or its staff upon request. - ------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----